Dobson, American Cellular, extend exchange for 9½% notes

New York, Aug. 11 - Dobson Communications Corp. and American Cellular Corp. said they had extended their previously announced offer to exchange cash, Dobson common stock and Dobson preferred stock for American Cellular's outstanding 9½% subordinated notes.

The offer was extended to 5 p.m. ET on Aug. 12, subject to possible further extension, from the original deadline of 5 p.m. ET on Aug. 8. As of the old deadline, $675.1 million principal amount of the notes (approximately 96.4% of the outstanding amount) had been tendered, falling short of the company's previously announced minimum condition of 99.5%. Dobson and American Cellular said the exchange offer was extended to permit additional tenders to be received in order to reach the announced minimum tender condition.

All other terms and conditions of the exchange offer are unchanged.

American Cellular also announced that it had received substantially more than the required vote for its prepackaged plan of reorganization by the Aug. 8 voting deadline, which is not being extended. As a result, if the minimum tender condition is not achieved or waived, American Cellular and Dobson Communications will be able to pursue the restructuring through the prepackaged plan of reorganization, as previously outlined.

As previously announced, Dobson,, an Oklahoma City-based provider of cellular wireless service to rural markets, along with American Cellular Corp. - in which Dobson holds a 50% indirect interest - jointly announced on July 14 that they planned to restructure American Cellular's $1.6 billion of indebtedness, including the full repayment of American Cellular's bank credit facility and a voluntary exchange for its $700 million of outstanding 9 ½% senior subordinated notes.

The companies said that holders of more than two-thirds in principal amount of the 9½% notes had signed agreements to support the restructuring.

Dobson and American Cellular said that the voluntary note exchange would have a minimum tender requirement of 99.5%; alternatively, if the voluntary exchange were not to be completed, the restructuring would be accomplished through a pre-packaged bankruptcy plan for American Cellular. The pre-packaged bankruptcy plan, if implemented, would apply only to American Cellular and its subsidiaries, and would not involve Dobson Communications.

The companies said that if all the notes are exchanged, holders of the outstanding 9½% senior subordinated notes would receive an aggregate recovery consisting of $50 million in cash; 45,054,800 shares of Dobson class A common stock; and 700,000 shares of a new series of Dobson convertible preferred stock.

The convertible preferred would have an aggregate liquidation preference of $125 million, would be initially convertible at an $8.75 conversion price into 14,285,714 shares of Dobson's class A common stock, would carry a 6% cash dividend OR, at the option of Dobson Communications, a 7% dividend payable in additional shares of convertible preferred stock; and would be mandatorily redeemable in 13 years.

Dobson said that it would capitalize a recently formed, wholly owned, indirect subsidiary with $50 million, and the subsidiary would seek to raise approximately $900 million through an offering of new senior notes, which would be non-recourse to Dobson Communications (high yield market syndicate sources said on July 25 that American Cellular, through its ACC Escrow Corp. unit, had sold $900 million of new 10% notes due 2011).

To complete the restructuring, the recently formed Dobson subsidiary would merge with American Cellular, and the subsidiary's available cash, including the net proceeds from the issue of new senior notes, would be used to fully repay American Cellular's existing bank credit facility. Upon completion of the restructuring, American Cellular would become a wholly owned consolidated subsidiary of Dobson Communications.

The companies said that the proposed plan would also be subject to the now-fulfilled condition of the Dobson Communications subsidiary to raise $900 million from the issuance of new senior notes on terms satisfactory to Dobson; it would also be subject to the now-obtained approval of a pre-packaged bankruptcy plan, if necessary; and to other customary closing conditions.

Chanin Capital Partners, LLC is the financial advisor to a special committee of the holders of American Cellular's 9½% notes (contact Ernie Sibal at 310 445-4010, ext. 286).

UbiquiTel issues $1.7 million new notes to buy back $6.9 million old 14% notes

New York, Aug. 11 - UbiquiTel Inc. said it bought back $6.9 million of its 14% senior subordinated discount notes for $1.1 million during the second quarter.

The Conshohocken, Pa. Sprint PCS affiliate said it funded the purchases by issuing $1.7 million of 14% series B senior discount notes.

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