Wackenhut Corrections to restructure credit facility and issue new debt for stock repurchase

By Sara Rosenberg and Paul A. Harris

New York, May 2 - Wackenhut Corrections Corp. expects to restructure its existing senior credit facility and issue new debt in connection with the repurchase for $132 million in cash of all 12 million shares if its common stock held by Group 4 Falck A/S, the company's 57% majority shareholder.

BNP Paribas has agreed to provide the company with the committed financing needed for the transaction.

The repurchase is expected to close by the end of June.

"We think that this transaction presents a unique opportunity to increase WCC's independence and create value for WCC's minority shareholders," stated George C. Zoley, chairman of the board and chief executive officer, in a news release.

"We believe that the elimination of the uncertainty created by the Group 4 Falck 12 million share overhang and the anticipated accretion in WCC's per share earnings, even after taking into account increased debt service, will have a long-term beneficial impact on WCC's stock price. We also feel confident that the removal of a controlling shareholder will provide WCC with more flexibility to pursue new opportunities related to the continued expansion of its business both domestically and abroad."

The company declined to return a Friday telephone call from Prospect News.

No underwriters or other details on the bond deal were available at press time.

Wackenhut is a Palm Beach Gardens, Fla. developer and manager of privatized correctional and detention facilities.

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