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American Color Graphics Commences Consent Solicitation With Noteholders

Wednesday, November 07, 2007

Press release from the issuing company

NASHVILLE, TN (November 5, 2007) -- American Color Graphics, Inc. announced today that it commenced a consent solicitation requesting holders of at least 90% of the principal amount of its 10% Senior Second Secured Notes due 2010 to defer to March 15, 2008, the semi-annual payment of cash interest on the Notes held by consenting holders, which is currently due on December 15, 2007. 
ACG said it has also entered into an agreement with the holders of 78.4% of the Notes to give their consent to such deferral.  The Noteholders party to such consent agreement have agreed to give their consent to such deferral not later than November 7, 2007, subject to certain conditions.  The consent solicitation will remain open until 11:00 AM, New York City time, on November 14, 2007, unless accelerated or further extended under conditions set forth in the consent solicitation.   
ACG said it has also negotiated with the administrative agent for its senior bank credit facilities a proposed amendment and waiver to such credit facilities.  The proposed amendment and waiver would, among other things, (a) provide for an additional $5 million term loan to ACG upon the effectiveness of the proposed waiver and amendment, and (b) waive, until February 15, 2008, any default under the credit facilities resulting from noncompliance with the first lien coverage ratio covenant in each facility as of September 30, and December 31, 2007, for all purposes of such facilities (including, without limitation, for the purpose of determining ACG's entitlement to make additional borrowings under either such facility on or prior to such date). 
ACG said it believes the administrative agent and the lenders under its bank credit facilities will execute the proposed amendment and waiver in connection with the closing of the consent solicitation. 
Stephen M. Dyott, Chief Executive Officer of ACG, said:  "These important steps will improve ACG's liquidity and give us additional time to pursue our strategic options with our significant stakeholders and with potential acquirers of ACG."
The consent solicitation is subject to certain conditions, including without limitation, receipt of consents from holders of at least 90% of the principal amount of the Notes, satisfaction of the closing conditions to effectiveness of the proposed amendment and waiver under the bank credit facilities and other customary closing conditions. 
The effectiveness of the proposed amendment and waiver under the bank credit facilities is subject to certain conditions, including without limitation, satisfaction of the closing conditions under the consent solicitation and other customary conditions.  Full details of the consent solicitation and the proposed amendment and waiver will be disclosed in a Form 8-K filing with the Securities Exchange Commission tomorrow. 

 

 

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