As part of its previously announced recapitalization plan, Sprint PCS affiliate AirGate PCS Inc. commenced an exchange offer for all of its outstanding discount notes for newly issued common stock and secured notes.
The offer, which is scheduled to close Feb. 11, includes exchanging each $1,000 of aggregate principal amount of 13.5-percent senior subordinated discount notes due 2009 for 110.1384 shares of AirGate’s common stock and $533.33 in principal amount of AirGate’s new 9.375-percent senior subordinated secured notes due 2009. AirGate’s stock was trading up nearly 15 percent Thursday at $3.78 per share.
The carrier noted it has previously made a private offer to holders of approximately 65 percent in principal amount of its outstanding discount notes to exchange their notes for common stock and new secured notes, and those holders have agreed to tender their notes in a concurrent private exchange offer.
AirGate noted completion of the exchange offer was subject to a number of conditions, including the receipt of valid tenders from at least 98 percent in aggregate principal amount of its outstanding discount notes, which may be waived with the consent of a majority of note holders who have signed the support agreement as amended. AirGate said the amendments will eliminate substantially all of the indenture’s restrictive covenants and will release all of the collateral securing it.
Additional portions of AirGate’s recapitalization plan include soliciting approval from shareholders to issue common stock in the exchange offers and implement a 1-for-5 reverse stock split of its common stock.
