US Unwired noteholders say no to exchange, organize committee, hire advisors

New York, May 29 - Holders of more than 50% of US Unwired, Inc.'s 13.375% senior subordinated notes say they will not participate in the company's exchange offer.

In addition, the holders said they have formed an ad hoc committee, signed a lock-up agreement and hired Chanin Capital Partners as financial advisors and Orrick, Herrington & Sutcliffe as legal advisors.

On May 15, US Unwired announced the exchange, saying it intends to offer a combination of cash and new senior notes for any and all of its $400 million face amount of 13 3/8% senior subordinated discount notes due 2009.

The Lake Charles, La. -based owner of five Sprint PCS affiliates in the southern U.S., said it would exchange $187 in cash and $185 face amount of new notes per $1,000 face amount of the existing notes.

The new notes will be 13 3/8% senior discount notes due Nov. 3, 2009 (or, in certain circumstances, on Nov. 1, 2008) and will be senior unsecured obligations of US Unwired Inc., will be guaranteed on a senior unsecured basis by all of the company's existing and future restricted subsidiaries, and will rank senior to any existing 13 3/8% subordinated notes that remain outstanding after completion of the exchange.

It said that the maximum amount of cash that will be paid to tendering holders in the offer is $37.5 million. Should more than $200 million of the existing notes be tendered, holders will receive cash in a prorated amount and additional new notes in lieu of cash. The additional new notes issuable to tendering holders in lieu of cash will have a face amount equal to the cash that would have been paid had the cash payment not been prorated, so that the total amount of cash payable and face amount of new notes issuable under the offer is $372.50 per $1,000 face amount of the existing notes.

The company said that the cash component of the exchange offer includes a $50 early participation payment per $1,000 face amount of existing notes tendered, which would be paid only to those holders tendering their notes by the early participation deadline noted above.

US Unwired set 5.00 p.m. ET on May 30 as the early participation deadline for the offer, which will expire at 5.00 p.m. ET on June 16, with both deadlines subject to possible extension.

The exchange offer is subject to the receipt of majority consents from the lenders under the company's senior secured credit facility; the recommendation by a special committee of the company's board of directors of a new financing to fund the cash portion of the offer; the receipt of a fairness opinion from an investment banking firm with respect to the new financing; the completion of the new financing on terms acceptable to the company; and certain other conditions.

The offer is not subject to the receipt of any consent from holders of the existing notes; however, if at least a majority in face amount of the existing notes is tendered in the offer, substantially all restrictive covenants relating to the existing notes will be eliminated.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.