American Color Launches Solicitation Of Votes For Prepackaged Reorganization Plan
Press release from the issuing company
BRENTWOOD, TN (June 11, 2008) – American Color Graphics announced today that it has commenced a solicitation of votes for its prepackaged plan of reorganization (the "Plan") from its 10% Note holders.
"We are pleased with the progress both American Color and Vertis Communications are making toward our announced merger plans and by the support our noteholders have already shown for this transaction. Combining the services, talent, and expertise of the two companies will offer new opportunities for our customers, employees and suppliers," said Steve Dyott, chairman and CEO of American Color. "We look forward to the flexibility and strength we expect from the combination of the two companies' service offerings and resources."
Steve Dyott also emphasized that it will be "business as usual" during the solicitation process, that American Color's Plan calls for suppliers and employees to continue to receive amounts owed to them in the ordinary course of business, and that American Color's commitment to providing its customers superior products and uncompromising service will continue through all phases of the process.
On May 22, 2008, and as updated on May 30, 2008, American Color announced it had the support of its 10% Note holders to merge with Vertis Communications and complete its comprehensive restructuring Plan. Since then, American Color has received additional support. At this time, American Color has agreements with the holders of approximately 74% of the outstanding principal amount of its 10% Senior Second Secured Notes due 2010 (the "10% Notes") to vote to accept the Plan, subject to certain conditions. Vertis has agreements with approximately 79% of the outstanding principal amount of its 9.75% Senior Secured Second Lien Notes due 2009, 84% of the outstanding principal amount of its 10.875% Senior Notes due 2009, and 79% of the outstanding principal amount of its 13.5% Senior Subordinated Notes due 2009 to support its reorganization plan. Under the plans, holders of 10% Notes and Vertis notes will be exchanging their notes for an aggregate of $550 million in new Vertis notes and substantially all the new equity in the combined company.
The transaction is also supported by Vertis' principal stockholders and the holders of over 95% of the outstanding principal amount of Vertis Holdings' Mezzanine Notes. The consensual financial restructurings will reduce the combined companies' debt obligations (including off-balance sheet accounts receivable facilities and approximately $248 million of Vertis Holdings Mezzanine Notes) by approximately $1 billion before transaction fees and expenses. American Color and Vertis intend to commence their prepackaged Chapter 11 cases at the conclusion of the solicitation period to implement the restructuring. The restructuring transactions, including the merger, are expected to close this summer.
Votes on the Plan must be received by Financial Balloting Group LLC ("FBG"), Vertis' voting agent, before the applicable deadline. Solicitation materials are being provided to noteholders of record. 10% Note holders seeking additional information about the balloting process may contact FBG at 646.282.1800.
This press release is for informational purposes only and is not a solicitation to accept or reject the proposed prepackaged plans of reorganization referred to herein or an offer to sell or a solicitation of an offer to buy any securities of either company. Any solicitation or offer to sell will be made pursuant to and in accordance with the solicitation and disclosure statement distributed to holders of American Color's 10% Notes and other creditors and applicable law.
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