Danka Announces Extension And Amendment Of Exchange
Press release from the issuing company
ST. PETERSBURG, Fla.--June 11, 2001--Danka Business Systems PLC (Nasdaq: DANKY) today announced that it has extended its pending exchange offer for its outstanding $200 million of 6.75% convertible subordinated notes due 2002 (CUSIP Nos. G2652NAA7, 236277AA7, and 236277AB5) to June 22, 2001, and has amended the terms of the exchange offer in accordance with an agreement reached with the Steering Committee of its senior lenders.
As announced on June 8, Danka has reached an agreement with the Steering Committee of its existing consortium of banks regarding the principal terms of a new credit facility to refinance Danka's existing bank debt. The new credit facility is subject to approval of 100% of the existing senior lenders, the finalization of definitive terms of the credit facility, the completion of the sale of Danka Services International (DSI) and the completion of the exchange offer as described below.
Under the amended offer, noteholders can choose to exchange their old 6.75% subordinated notes for cash, new zero coupon senior subordinated notes or new 10% subordinated notes.
* Holders who choose cash will receive $400 in cash for each $1,000 in principal amount of old 6.75% notes. The cash option is limited to $24 million of proceeds. Accordingly, Danka will purchase no more than a total of $60 million in principal amount of old notes for cash.
* Holders who choose new senior subordinated notes will receive $800 in principal amount of Danka's new zero coupon senior subordinated notes due April 1, 2004 for each $1,000 principal amount of old 6.75% notes. The new senior subordinated notes will be guaranteed on a senior subordinated basis by certain of Danka's subsidiaries.
* Holders who choose new 10% notes will receive $1,000 in principal amount of new 10% subordinated notes due April 1, 2008 for each $1,000 principal amount of old 6.75% notes. The new 10% notes will be issued with accrued interest effective from April 1, 2001, payable on October 1, 2001
The cash option will likely be oversubscribed. In that case, Danka will purchase a total of $60 million principal amount of old notes for cash and will exchange $800 in principal amount of new senior subordinated notes for every additional $1,000 in principal amount of the balance of old notes tendered for cash. All holders who elect to receive cash will be treated equally in this process.
The offer is conditioned on the closing of the sale of DSI, the closing of the refinancing of Danka's senior bank debt, the consent of parties to Danka's tax retention operating lease arrangements and other customary conditions. Danka anticipates that it will close the sale of DSI and the refinancing of its senior bank debt by June 29, 2001.
In addition, the offer is conditioned on valid tenders of at least 95% of the aggregate principal amount of the old 6.75% notes. Danka's new credit facility will prohibit the repayment of any old 6.75% notes that remain outstanding after completion of the exchange offer. The Company's new credit facility, the new senior subordinated notes and the new 10% notes will rank senior in right of payment to any old 6.75% notes that remain outstanding.
As of 5:00 p.m., New York City time, on June 8, 2001, Danka had received tenders from holders of a total of $149,504,000 in aggregate principal amount of the old 6.75% notes or approximately 75% of the outstanding old notes. Of the notes tendered pursuant to the exchange offer, $87,177,000 in principal amount has been tendered for the cash option, $825,000 in principal amount has been tendered for the new senior subordinated note option and $61,502,000 in principal amount has been tendered for the new 10% note option.
The exchange offer is now scheduled to expire at 11:59 p.m., New York City time, on June 22, 2001.
The complete terms of the amended exchange offer will be contained in an amended registration statement for the exchange offer to be filed with the Securities and Exchange Commission.
Banc of America Securities LLC is the exclusive dealer manager for the exchange offer. D.F. King & Co., Inc. is the information agent and HSBC Bank USA is the exchange agent. Additional information concerning the terms and conditions of the offer may be obtained by contacting Banc of America Securities LLC at (888) 292-0070.
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