/raid1/www/Hosts/bankrupt/TCR_Public/000518.MBX
T R O U B L E D C O M P A N Y R E P O R T E R
Thursday, May 18, 2000, Vol. 4, No. 98
Headlines
AUTOTECH LEASING: Involuntary Case Summary
BOSTON MARKET: Court Approves McDonald's Acquisition
CAPITAL GAMING: Reports on Financial Restructuring
CELLNET DATA: Schlumberger Announces Acquisition of Assets
DAEWOO MOTOR: Labor force favoring Ford over GM
DIAMOND BRANDS: Moody's Lowers Debt Ratings
DIRECT POWER: Last Date for Filing Proofs of Claim
DYERSBURG CORP: Results For Second Quarter
FIRSTCITY FINANCIAL: Announces First Quarter 2000 Results
GRAND UNION: Q4 EBITDA Declines Sharply
GST TELECOMMUNICATIONS: Files Voluntary Chapter 11 Petition
HARVARD INDUSTRIES: Reports Sales and EBITDA For Quarter
HYUNDAI MOTOR: To spin off, add Inchon Steel to group
KIA MOTOR: To spin off, add Inchon Steel to group
ICO GLOBAL: New ICO Emerges From Chapter 11
INTEGRATED HEALTH: Reports First Quarter
LAIDLAW: Moody's Downgrades Rates
LAMONTS: Gottschalks Receives Court Approval For Purchase
MORRIS MATERIAL: Announces Filing of Chapter 11
PACIFIC GATEWAY: In Discussions With Its Banks For Use of $52MM
PLANET HOLLYWOOD: Names New President
RAYTECH: Announces First Quarter Results for 2000
SERVICE CORPORATION: Moody's Lowers Debt Ratings; Under Review
SILVER CINEMAS: Announces Voluntary Chapter 11 Filing
SILVER CINEMAS: Case Summary and 20 Largest Unsecured Creditors
SUNTERRA: DCR Downgrades Ratings to 'CCC'
URANIUM RESOURCES: Reports Net Loss of $843,000 For First Quarter
VISTA EYECARE: Reports First Quarter Financial Results
*********
AUTOTECH LEASING: Involuntary Case Summary
--------------------------------------------
Alleged Debtor: Autotech Leasing America, LLC
337 East 64th Street
New York, NY 10021
Involuntary Petition Date: May 16, 2000
Case Number: 00-12133 Chapter 11
Court: S. District of New York Judge: Stuart M. Bernstein
Petitioners' Counsel: Sanford Philip Rosen
Sanford Philip Rosen & Associates, P.C.
747 Third Avenue, New York
New York, 10017-9998
Tel: (212) 223-1100
Fax: (212) 223-1102
Email: SPRPC@worldnet.att.net
Petitioners:
KBC Bank, N.V. Promissory notes $ 1,491,082
Banco Espirito Santo Promissory notes $ 459,593
Arab Bank Corporation Promissory notes $ 416,384
Erste Bank Promissory notes $ 1,321,383
BOSTON MARKET: Court Approves McDonald's Acquisition
----------------------------------------------------
The U.S. Bankruptcy Court for the District of Arizona has
approved the Plan of Reorganization of Boston Chicken, Inc. under
which McDonald's Corporation (NYSE: MCD) will acquire the Boston
Market business. The parties announced that they expect to
complete the transaction near the end of this month.
Even with the closing of the rejected sites and potential
conversions, a significant majority of the existing sites will
remain Boston Market Restaurants. "We intend to invest in
existing restaurants and even add some new ones in order to
provide an enhanced restaurant experience for Boston Market's
customers," Kindler added.
McDonald's Corporation is the largest foodservice company in the
world, operating more than 27,000 restaurants in 119 countries as
McDonald's, Aroma Cafe, Chipotle Mexican Grill, Donatos Pizza
and, upon closing, Boston Market. Information about McDonald's
Corporation is available at www.mcdonalds.com.
Boston Chicken, Inc. operates restaurants under the Boston Market
brand name that specialize in fresh, convenient meals, featuring
homestyle entrees, fresh vegetables, sandwiches, salads and side
dishes. There are currently 851 Boston Market restaurants in 33
states and the District of Columbia. Information about Boston
Market is available at www.bostonmarket.com .
CAPITAL GAMING: Reports on Financial Restructuring
--------------------------------------------------
Capital Gaming International, Inc. (the "Company") (OTC: CGMI)
reported the successful completion of negotiations with U.S. Bank
Trust National Association, as Indenture Trustee of the Company's
Senior Secured Notes due 2001 ("Senior Secured Notes"), the
holders of approximately 84% of the Senior Secured Notes and the
holders of approximately 70% of the Company's equity interests
regarding the economic terms of a voluntary financial
restructuring of the Company. As contemplated by these
negotiations, the Company and its Indenture Trustee yesterday
commenced reorganization proceedings and filed a jointly
proposed Plan of Reorganization in the United States Bankruptcy
Court for the District of New Jersey (the "Court").
The Company further reported that its decision to restructure its
balance sheet was consistent with the aggressive posture it was
taking with respect to actively pursuing new gaming opportunities
for the Company's subsidiaries. The Company reported that by de-
leveraging the Company by converting its Senior Secured Notes to
a cash payment and equity, the financial reorganization will
eliminate the uncertainty created by the existing debt structure
which provides for a balloon payment of $18,480,000 in principal
on the Senior Secured Notes when they become due in May 2001,
provide the Company needed flexibility for investing in and
raising capital for future new gaming projects and provide the
Company with competitive advantages against larger and better
capitalized competitors. The Company further reported that no
changes in control or in management is expected to occur in
connection with its financial restructuring.
The Company anticipates having its Plan of Reorganization
confirmed by the Court within the next 60 to 90 days.
The Company has interests in two wholly-owned subsidiaries,
Capital Gaming Management, Inc. and Capital Development Gaming
Corp. Yesterday's filing does not involve the Company's
subsidiaries and the Company does not anticipate any need for a
restructuring at the subsidiary level.
The Company further reported that prior to yesterday's filings,
it had remained current on all outstanding interest payments on
its Senior Secured Notes since March 1997, which totaled
approximately $6,829,900. In connection with the Plan of
Reorganization, the Company also reported that it is anticipated
that the holders of its Senior Secured Notes would receive
approximately $9 million in cash, and equity, in exchange for the
Senior Secured Notes.
Based in Phoenix, Arizona, the Company is a multi-jurisdictional
casino development and management company with interests in
Native American gaming markets.
CELLNET DATA: Schlumberger Announces Acquisition of Assets
----------------------------------------------------------
Schlumberger Limited (NYSE:SLB) announced that its Resource
Management Services (RMS) business segment has acquired
substantially all of the assets of CellNet Data Systems, Inc., a
market-leading provider of telemetry services. The Schlumberger
RMS acquisition of CellNet assets, for a total of $235 million
(which includes the assumption of certain liabilities), was
undertaken through a prearranged Chapter 11 bankruptcy filing by
CellNet in February, 2000 and closed today following final
approval by the United States Bankruptcy Court in Delaware
on May 5, 2000.
CellNet is an industry pioneer and a leading provider of low-cost
telemetry services which support the ability to transmit and
receive data for the remote monitoring and control of utility
metering devices. Clermont Matton, executive vice president
Schlumberger RMS, said, "Schlumberger considers the CellNet
technology to be a vital component for the development and
deployment of large-scale automatic meter reading (AMR) systems
and CellNet's technology has been used in the deployment of over
four million meters." Matton added, "The combination of
Schlumberger RMS utility measurement systems, products and
services with CellNet AMR technology significantly strengthens
RMS leadership in delivering advanced solutions and value-added
services to utilities and energy resource providers."
Schlumberger RMS provides professional business services for
utilities, energy service providers and industry worldwide.
Through consulting, meter deployment and management, data
collection and processing, and information analysis, RMS helps
clients achieve network optimization, greater operating
efficiency and increased customer loyalty. Active in all utility
sectors--water, gas, electricity and heat--the RMS group is
present in more than 30 countries. RMS posted revenue of $1.38
billion in 1999.
Schlumberger Limited is a global leader in technical services
spanning the oil and gas, utility, semiconductor testing, smart
cards, and network and Internet solutions industries.
Schlumberger revenue was $8.4 billion in 1999. Additional
information is available from Realtime (www.slb.com), the
Schlumberger corporate website.
DAEWOO MOTOR: Labor force favoring Ford over GM
-----------------------------------------------
The labor force is emerging as one of the most critical
factors in the intensifying competition for Daewoo Motor,
industry analysts said yesterday, noting that the
automaker's workers are preferring Ford Motor to General
Motors as their new employer.
"Favorable sentiment towards Ford is rapidly spreading
among Daewoo workers," said a Daewoo Motor union official.
"During the previous 1971-1992 tie-up, GM was reluctant to
transfer technologies. Daewoo workers are particularly
worried by the fact that 80 percent of U.S. auto industry
labor disputes are taking place at GM plants, as well as
massive plant closures at GM's plants in Mexico and
Argentina."
Indeed, the Daewoo Motor union said in its Internet site
(www.dmpeople.or.kr) that GM officials visiting Daewoo
Motor plants for due diligence were very highhanded,
whereas Ford inspectors expressed more interest in Daewoo's
merits and growth potentials.
Meanwhile, with two of the five bidders scheduled for
selection as the priority negotiators by June 30, the issue
of how much the automaker is worth is also attracting keen
attention, analysts said.
"Due to public pressure, Samsung Motor was sold below the
price demanded by its creditors of 1 trillion won ($890
million) and sold for $562 million, with only $11 million
being paid in cash," said a creditor bank executive.
He expressed concern that a similar incident could happen
to Daewoo as well. Daewoo creditors are hoping to get 6 to
7 trillion won, but considering the current state of the
stock market, even market leader Hyundai Motor is only
worth 3 trillion won. (Korea Herald 17-May-2000)
DIAMOND BRANDS: Moody's Lowers Debt Ratings
-------------------------------------------
Moody's Investors Service lowered the rating of Diamond Brands
Operating Corp.'s ("Diamond") $100 million of 10.125% senior
subordinated notes, due 2008, to Caa1 from B3, and lowered the
rating of the company's $105 million secured credit facility to
B2 from B1. The latter currently includes a $25 million revolving
credit, due 2004, and approximately $77 million of term loans,
due 2005 and 2006. Concurrently, Moody's lowered the rating of
Diamond Brands, Inc.'s ("Holdco") $84 million of 12.875% senior
discount notes, due 2009, to Caa2 from Caa1. The company's senior
implied rating was lowered to B2 from B1 while its senior
unsecured issuer rating was lowered to Caa2 from Caa1.
The downgrades are in response to Diamond's weak operating
performance in fiscal 1999 and Moody's expectation that its
fiscal 2000 results will not be significantly better. Due to the
company's rising raw material costs, primarily plastic resins,
its operating margins will likely experience significant downward
pressure. Rising resin costs will primarily impact the company's
cutlery/straw product segment, which accounted for nearly 37% of
its net sales but a lower share of its earnings in fiscal 1999.
Despite Diamond's modest annual revenue growth and its efforts to
improve profitability, EBITA cash flow remains modest relative to
its heavy debt burden. As of March 31, 2000, Holdco reported
consolidated debt of approximately $232 million and LTM sales of
only $106 million. Subsequently, Moody's believes Holdco.'s debt
was reduced to approximately $212 million due to the retirement
of $45 million face value of its senior discount notes. The
company's balance sheet includes negative equity, largely due to
recapitalization accounting, and approximately $24 million of
goodwill. The latter represents 26% of its total assets.
For the LTM ended March 31, 2000, Diamond reported revenues of
$106 million and adjusted EBITA of approximately $27 million.
Although the company's 25% EBITA margin appears healthy for a
consumer products company, its substantial annual debt service
requirements take a large bite out of its profitability. During
the first three months of fiscal 2000, Diamond's gross margin
deteriorated notably primarily due to an increase in resin and
packaging costs. Moody's believes the company could find it
difficult to exceed or at least match the $27 million of EBITA it
generated in fiscal 1999.
Based on approximately $232 million of consolidated debt at
Holdco and $178 million of debt at Diamond, EBITA leverage is
more than 8 times and 6 times, respectively. In addition,
interest coverage at Holdco and Diamond is very thin at 1.1 times
and 1.5 times, respectively. Diamond's retained cash, as measured
by EBITDA minus interest expense minus capex, was low about 4% of
its total funded debt in fiscal 1999. Its EBITA return on
liabilities was 11% due to its strong operating margins.
Holdco.'s debt protection measures should improve as a result of
the early debt retirement.
During 1999, Diamond was successful in selling its candle
business for a moderate amount of cash. Historically, the candle
operations caused a significant drag on the company's
profitability. The results of the candle business have been
reported as discontinued operations in the company's financial
statements.
Due to Diamond's highly leveraged capital structure and the
expectation that its EBITA cash flow will not materially
strengthen in the near term, the company's financial flexibility
should remain limited. Diamond's bank credit facility was amended
in March 1999. This amendment loosened some of the financial
covenants through fiscal 2000. The company was in compliance with
its financial covenants as of March 31, 2000. However, Moody's
believes borrowing availability under the $25 million revolving
credit facility is modest.
Headquartered in Cloquet, Minnesota, Diamond Brands, Inc. is a
leading designer, manufacturer and marketer of a broad range of
branded consumer products. The company generated sales of $104
million in fiscal 1999.
DIRECT POWER: Last Date for Filing Proofs of Claim
--------------------------------------------------
The US Bankruptcy Court for the Southern District of New York
entered an order on April 13, 2000 approving a general bar date
of May 26, 2000 in the case of Direct Power Plus LLC, debtor.
DYERSBURG CORP: Results For Second Quarter
------------------------------------------
Dyersburg Corp. (OTCBB:DBGC) announced the financial results for
the second quarter and year-to-date ended April 1, 2000.
Additionally, the Company today announced that it has entered
into a Forbearance Agreement with its existing bank lenders.
Under the Forbearance Agreement, the Bank Lenders will continue
to provide the Company with liquidity until August 25, 2000.
During this time, the bank lenders will also refrain from
exercising remedies available to them under the Bank Credit
Agreement as a result of Dyersburg's default under a financial
covenant in the Credit Agreement. The Company continues to access
its Revolver and has not realized any reduction in its borrowing
availability.
The Company said that it has retained the financial advisory firm
of Houlihan Lokey Howard & Zukin to assist management in
developing strategic alternatives related to restructuring its
long-term indebtedness. The Company noted that it intends to seek
a plan of restructuring that will leave trade creditors
unimpaired.
T. Eugene McBride, chairman and chief executive officer, said,
"Our business is improving, as evidenced by our outstanding
backlog. However, our long-term debt issues, along with some
operational inefficiencies have held us back from reaching our
full potential. We have begun to take some aggressive steps to
address our operational inefficiencies and are actively working
with our financial advisors to address our debt issues. We
believe that the successful implementation of these actions will
help restore Dyersburg's financial health and get the Company
back on track."
For the second quarter, net sales were $78.7 million compared to
$80.1 million reported for the same period last year. The net
loss for the quarter was $4.0 million, or a loss of $0.30 per
share, compared to a net loss of $2.7 million, or $0.20 per
diluted share, reported for the same quarter last year.
Year-to-date sales were $147.1 million, down from $155.5 million
a year ago. The net loss for the year-to-date amounted to $4.6
million, or $0.35 per share, compared to$4.3 million, or $0.32
per share for the same two periods last year. Backlog totaled
$63.3 million, up 39 percent from the same time last year. As a
result of the default, the Company's debt under the Credit
Agreement has been reclassified as a current liability.
Additionally, the Company said that Thomas J. Albani has been
appointed to its Board of Directors.
Dyersburg is one of the largest domestic marketers of circular
knit fleece, jersey and stretch knit fabrics. The Company
produces fabrics that are used principally for activewear,
bodywear, outerwear and various branded sportswear. Dyersburg
also operates a garment packaging business in the Dominican
Republic.
FIRSTCITY FINANCIAL: Announces First Quarter 2000 Results
---------------------------------------------------------
FirstCity Financial Corporation (NASDAQ:FCFC)(NASDAQ:FCFCO)
reported a loss of $129,000 for the quarter ended March 31, 2000.
After accrued dividends on the Company's preferred stock, the
loss to common shareholders was $771,000 or $ .09 per share on a
diluted basis.
A summary of the results of operations for the quarter ended
March 31, 2000, is as follows:
Income/(loss) contribution ($ in thousands)
--------------------------
Portfolio Asset Acquisition and Resolution $ 2,856
Consumer Lending 2,200
Corporate interest (3,781)
Corporate overhead (1,404)
Accrued preferred dividends (642)
Net loss to common shareholders $ (771)
The Portfolio Acquisition unit acquired three domestic portfolios
during the quarter totaling $13.6 million. During the quarter,
collections were $33.6 million, principally coming from
Acquisition partnerships. Subsequent to quarter end the Company
participated in the purchase of a portfolio in Mexico consisting
of approximately 20,000 commercial and industrial loans. The
acquired portfolio, the largest transaction by the Company in its
history, will be managed by the previously established servicing
platforms in Guadalajara and Mexico City. The outlook for
investment and servicing opportunities worldwide continues to be
very positive, as the Company continues to expand its platform
into foreign markets. Correspondingly, the European investments
continue to perform well with prospects for future expansion and
investment remaining strong.
During the quarter FirstCity Funding, the Company's automobile
finance business unit, completed a securitization of $41 million
of face value of automobile receivables resulting in a gain
of$2.9 million. The transaction was structured with $35.7 million
in senior bonds, with the balance held by the Company in a
residual interest. Production increased to $61 million in
purchased auto receivables during the quarter because of improved
liquidity and funding. The loans purchased during the quarter
were purchased at an average discount to face value of 15.58% and
carry a weighted average coupon of 19.9%. The defaults to date on
assets acquired through March 31, 2000 are 12.01% of the total
loans acquired. Losses on these defaults have totaled 5.67% of
the original loan balances at the time of default. The defaults
and resultant losses are in line with expectations. Delinquencies
at quarter-end were 3.00% of the total serviced portfolio. At the
end of the period the Company's balance sheet reflected $58.3
million of auto finance residuals. Additionally, during the
quarter, the warehouse provider in conjunction with the credit
enhancement provider increased warehouse capacity from $50
million to $70 million.
Subsequent to quarter end, the Company closed a $17 million
facility secured by certain investments in Acquisition
Partnerships. Additionally, the Company secured a $2.5 million
increase in residual asset financing, increasing such financing
to $5.5 million. At March 31, 2000, the Company was not in
compliance with certain financial and other covenants in its
senior revolving credit facility. The Company is working with its
lenders to obtain formal approval or waivers relating to these
matters and funding under this facility continues uninterrupted.
The Company continually evaluates its liquidity position giving
priority to assuring adequate funding levels for its two
operating entities.
Secondarily, management will determine when and if it is
appropriate to pay the dividends on the Company's outstanding
Preferred Stock. Currently, there are approximately 1.2 million
preferred shares outstanding with accrued dividends of
approximately $2.0 million. The Company must obtain the consents
of the lenders prior to payment of any common and preferred
dividends. Preferred dividends are cumulative.
GRAND UNION: Q4 EBITDA Declines Sharply
---------------------------------------
Sales, operating earnings and EBITDA of The Grand Union Company
(Nasdaq:GUCO) were significantly lower in the fourth quarter of
the fiscal year ended April 1, 2000. The company, one of the
Northeast's largest supermarket chains, said net results also
included one-time charges to cover $19.6 million for
restructuring, staff reductions and the closing of 16 stores, as
previously announced.
For the last 12 weeks of fiscal 2000, sales were $484.6 million,
down from $ 547.2 million for the 13-week fourth quarter of
fiscal 1999. This year's quarter did not include Easter week,
while last year's did. Same-store sales declined by 1.73% for the
quarter and 0.14% for the full year.
Grand Union's fourth quarter EBITDA (earnings before interest,
taxes, depreciation, amortization, unusual and extraordinary
items, and non-cash pension and LIFO charges) fell sharply from
$30.1 million in 1999 to $1.0 million this year. The decline in
EBITDA primarily reflected competitive sales pressure in all
markets, delays in completing new and remodeled stores, and the
initial disruptive effects of February's major management change
and subsequent staff reorganization.
For the 52-week fiscal 2000 year, sales declined 3.6% to $2.2
billion, from $ 2.3 billion for the 53-week 1999 fiscal year.
Full-year EBITDA was $84.3 million, down from $118.6 million for
fiscal 1999. This fiscal year's net results also reflect $7.6
million in adjustments as a result of the adoption of a change in
accounting in accordance with the Securities and Exchange
Commission's Staff Accounting Bulletin on revenue recognition
(SAB 101).
Grand Union's net loss for the fourth quarter was $201.0 million,
or $6.70 per share, after the cumulative effect of an accounting
change of $3.5 million for SAB 101, a one-time charge of $19.6
million for restructuring, staff reductions and store closings,
non-cash charges of $30.4 million for amortization of excess
reorganization value and $138.3 million to write off the
value of deferred tax assets. During the same period last year,
the company reported a net loss of $31.4 million, or $1.05 per
share.
Grand Union's full-year net loss was $307.9 million, or $10.27
per share, including the previously mentioned one-time expenses
for restructuring and deferred tax asset charges, and $131.9
million for amortization of excess reorganization value. One year
ago, the company posted net income of $114.4 million, which
included extraordinary items of $259.0 million following the
company's August 1998 emergence from a pre-packaged Chapter 11
reorganization. Under terms of that plan, the company eliminates
the amortization of excess reorganization value by August 2001.
Gross margin declined from 30.1% during last year's final 13
weeks to 25.1% for this year's 12 weeks. For the full year, gross
margin was 28.4% in 2000, compared with 29.7% a year ago.
Operating and administrative expenses in the fourth quarter were
25.7% of sales, compared with fiscal 1999's 25.1%. For the
full year, operating expenses were 25.1%, about even with 25.0%
in the prior year.
Separately, Grand Union announced that the Nasdaq Stock Market
has informed the company that, effective June 26, 2000, the
company's common stock will be delisted from the Nasdaq National
Market and, the company expects, listed on Nasdaq's Small Cap
Market the same day. To achieve this seamless transition, the
company intends to submit its application for Small Cap listing.
The change primarily reflects recent bid prices below the $5-per-
share range required for continued listing on Nasdaq's National
Market. Grand Union's ticker symbol is GUCO.
Grand Union operates more than 200 retail food stores in
Connecticut, New Hampshire, New Jersey, New York, Pennsylvania
and Vermont.
GST TELECOMMUNICATIONS: Files Voluntary Chapter 11 Petition
-----------------------------------------------------------
GST Telecommunications, Inc. (Nasdaq: GSTX), an Integrated
Communications Provider (ICP) in California and the western
United States, announced that it has filed this morning in the
U.S. Bankruptcy Court for the District of Delaware for protection
under Chapter 11 of the U.S. Bankruptcy Code.
In addition, the Company has executed a Letter of Intent with
Time Warner Telecom, Inc. (Nasdaq: TWTC) for the sale of
substantially all the assets of GST for $450 million in cash,
subject to the approval of the bankruptcy court, the execution
and delivery of a definitive purchase agreement, satisfactory
completion of due diligence, state and federal regulatory
approval, and other customary terms and conditions.
The Company also announced that it has secured a commitment from
Heller Financial, Inc. to provide Debtor In Possession (DIP)
financing for up to $50 million and the potential for up to an
additional $75 million (subject to certain restrictions and court
approval) to continue day-to-day operations.
GST's filing was necessitated by escalating cash flow problems, a
substantial debt load, and an inability to secure other
financing. "Given our recent liquidity challenges, I believe we
are taking all the right steps to preserve the value of GST by
continuing to provide quality service to our customers and retain
our employee base," stated Tom Malone, acting chief executive
officer of GST. "Looking to our future and that of our employees,
the execution of this Letter of Intent with Time Warner Telecom
signals that we are not alone in our belief that GST has a
valuable network, skilled and dedicated employees, as well as an
attractive customer base."
GST Telecommunications, Inc., an Integrated Communications
Provider (ICP) headquartered in Vancouver, Wash., provides a
broad range of integrated telecommunications products and
services including enhanced data and Internet services and
comprehensive voice services throughout the United States, with a
significant presence in California and the West. Visit GST's Web
site at www.gstcorp.com.
HARVARD INDUSTRIES: Reports Sales and EBITDA For Quarter
--------------------------------------------------------
Harvard Industries, Inc. (NASDAQ: HAVA), a manufacturing company
which emerged from Chapter 11 bankruptcy in November, 1998,
announced sales and EBITDA for the six-month and three-month
periods ended March 31, 2000, of $173.7 million and $10.4 million
and $90.1 million and $6.0 million, respectively.
As a result of its emergence from Chapter 11 and the prospective
effects of "Fresh Start Reporting," the Company does not believe
that its historical results from operations are necessarily
indicative of its results as an on-going entity. However, for
comparative purposes the two-month period ended November 29, 1998
(pre-emergence) has been combined with the four-month period
ended March 31, 1999 (post-emergence) into a pro -forma six-month
period.
On a pro forma basis for the corresponding six-month and three-
month periods a year earlier, the Company had sales and EBITDA of
$166.3 million and $7.9 million and $85.6 million and $4.1
million respectively, after adjusting the prior period sales and
EDITDA by$91.6 million and $9.7 million and $43.1 million and
$3.4 million respectively for operations divested in the twelve-
month period ended September 30, 1999. These divestitures were
made to enable the Company to advance its diversification.
Harvard believes that EBITDA, defined as earnings before
interest, income taxes, depreciation, amortization,
reorganization items, extraordinary items and one-time items such
as the gain or loss on the sale of operations, is the best
benchmark of its performance since it bears a closer relationship
to real cash earnings than earnings per share.
Roger Pollazzi, Chairman and Chief Executive Officer, noted, "The
Company continues to make excellent progress. We are on plan in
developing our higher value added businesses. Our operating
margins are improving and our balance sheet is debt-free."
Harvard Industries, Inc. designs, develops, and manufactures a
broad range of components for OEM manufactures and the automotive
aftermarket, as well as aerospace and industrial and construction
equipment applications worldwide. The Company has approximately
2,500 employees at 10 plants in the United States and Canada.
HYUNDAI MOTOR: To spin off, add Inchon Steel to group
KIA MOTOR: To spin off, add Inchon Steel to group
-----------------------------------------------------
Hyundai Motor and Kia Motors will be spun off from the
Hyundai Group by the end of June and Inchon Steel will be
merged into the new "Hyundai Motor Group," sources said
yesterday.
In addition to the steel manufacturer, Hyundai Pipe,
Hyundai Capital and Hyundai Precision will also be
separated from the mother group to join the Hyundai Motor
Group, said the sources.
In a related move, meanwhile, Kia Motors yesterday decided
to take a 12.8 percent stake in Hyundai Pipe by purchasing
11.45 million outstanding shares of the company. The motor
firm said Tuesday the move is related to its effort to
secure a stable supply of cold-rolled steel.
Mitsubishi's Hong Kong affiliate Odemachi holds the largest
stake in Hyundai Pipe with 41 percent, followed by 8.77
percent for Hyundai Engineering and Construction, Hyundai
Motor's 11.09 percent, Hyundai Heavy Industries with 7.04
percent and Inchon Steel with 7.59 percent. (Korea Herald
17-May-2000)
ICO GLOBAL: New ICO Emerges From Chapter 11
-------------------------------------------
New ICO, formerly ICO Global Communications, has successfully
emerged from Chapter 11 bankruptcy protection following
completion of a $1.2 billion investment led by telecommunications
pioneer Craig McCaw and a group of U.S. and international
investors.
"I congratulate New ICO, its employees and its partners around
the world on all the hard work required to facilitate the
company's transformation," McCaw said. "We appreciate having the
opportunity to learn from the pioneering efforts of others in
reconfiguring New ICO for the market." New ICO officially emerged
from bankruptcy protection today.
In related news, ICO-Teledesic Global Limited, a new holding
company that controls the satellite assets of McCaw's private
investment company Eagle River Investments LLC, intends within
the next week to propose to New ICO a merger of the two
companies. As a result of New ICO's just-completed reorganization
plan, ICO-Teledesic Global is the controlling shareholder in
London-based New ICO.
This proposal is subject to approval by the New ICO board and
shareholders and regulatory authorities.
On May 12, Teledesic's board of directors approved the merger of
Bellevue, Washington-based Teledesic into ICO-Teledesic Global,
but the merger remains subject to shareholder and regulatory
approvals. Under the proposal, New ICO and Teledesic would become
wholly owned subsidiaries of ICO-Teledesic Global.
New ICO's founding shareholder and distributor group will be a
key asset to the company. "We're honored to be on the same team
with New ICO's distribution partners," McCaw said. "This
unrivaled global network of leading telecommunications companies
includes many of the strongest distribution partners in all
regions of the world."
McCaw will serve as chairman of ICO-Teledesic Global in addition
to his role as chairman of New ICO and founder and chairman of
Teledesic LLC. Having successfully completed his goal of guiding
ICO through the bankruptcy process, Richard Greco is resigning as
chief executive officer of ICO to develop his own
telecommunications venture. Russell Daggatt becomes acting CEO of
New ICO and ICO-Teledesic Global.
Since McCaw announced plans to invest in ICO on November 1, 1999,
Teledesic representatives have worked closely with ICO and its
industrial partners Hughes Space and Communications, Hughes
Network Systems, NEC and Ericsson to upgrade the New ICO ground
network. The improvements will enable New ICO to provide high-
speed Internet services through its constellation of 10 medium-
Earth-orbit satellites plus two on-orbit spares.
Indian entrepreneur Subhash Chandra is among the investors in
ICO-Teledesic Global.
New ICO is the successor to ICO Global Communications (Holdings)
Limited, established in January 1995 to provide global mobile
personal communications services by satellite. ICO Global
Communications was listed on NASDAQ in July 1998. The stock was
suspended from trading when the company filed for Chapter 11
protection on August 27, 1999. The business was renamed New ICO
following its emergence from Chapter 11 protection on May 16. New
ICO (pronounced "EYE-co") is based in London with offices in
Washington, D.C.; Miami; Singapore; Beijing; Mumbai, India;
Dubai; Moscow; Istanbul, Turkey; and Pretoria, South Africa.
Telecommunications pioneer Craig McCaw and Microsoft founder Bill
Gates are Teledesic's two primary founding investors. Strategic
investors also include Motorola, Saudi Prince Alwaleed Bin Talal,
The Boeing Company and The Abu Dhabi Investment Company.
Teledesic (pronounced "tel-eh-DEH-sic") is based in Bellevue, a
suburb of Seattle, Washington, with offices in Brussels, Belgium;
London, United Kingdom; Madrid, Spain; Munich, Germany; Ottawa,
Canada; and Washington, D.C.
On May 3, the Amended Plans of Reorganization of ICO Global
Communications (Holdings) Limited ("Old ICO"), a Bermuda
corporation, and certain of its affiliates were collectively
confirmed by the U.S. Bankruptcy Court for the District of
Delaware and on May 16, the plans became effective. Based on the
plans, the holders of the existing common shares of Old ICO will
receive shares of common stock comprising approximately 1 percent
of the common equity capitalization of New ICO Global
Communications (Holdings) Limited, the reorganized company, and
warrants to purchase such common stock. In addition, the plans
provide for Old ICO to be liquidated under Bermuda law, and the
common shares of Old ICO will eventually be canceled. While
shares of Old ICO may remain outstanding until the liquidation is
complete, the existing common shares of Old ICO no longer have
any value other than the value of the shares and warrants being
received under the reorganization plans.
Teledesic and Internet-in-the-Sky are registered service marks of
Teledesic LLC.
INTEGRATED HEALTH: Reports First Quarter
----------------------------------------
Integrated Health Services, Inc. (OTC Bulletin Board: IHSVQ)
announced revenues and operating results for the first quarter
ended March 31, 2000.
Net revenues for the first quarter totaled $637.3 million,
representing approximately a 3% increase from the first quarter
of 1999. Loss before reorganization items and income taxes were
$21.0 million in the first quarter 2000 compared to $4.4 million
in the first quarter 1999. Net losses were $28.2 million in the
first quarter 2000 and loss per share was $.58 compared to 1999
first quarter results of $6.6 million in net losses and loss per
share of $.13.
On February 2, 2000, Integrated Health Services and many of its
subsidiaries filed voluntary petitions with the U.S. Bankruptcy
Court for the District of Delaware, in order to restructure the
Company's debt obligations. The Company is currently operating
its business as a debtor-in-possession subject to the
jurisdiction of the Bankruptcy Court.
Integrated Health Services is a highly diversified health
services provider, offering a broad spectrum of post-acute
medical and rehabilitative services through its nationwide
healthcare network. IHS's post-acute services include
home respiratory services, subacute care, long-term care and
contract rehabilitation services.
LAIDLAW: Moody's Downgrades Rates
---------------------------------
Moody's Investors Service downgraded the senior unsecured rating
of Laidlaw Inc. (Laidlaw) debt to Caa2 from B2 following the
company's decision to defer the interest payments on certain of
its public debt securities. Moody's anticipates that Laidlaw will
defer the interest and principal on its remaining securities as
the payments become due, as the company has indicated that it is
operating under restricted cash availability. Moody's also
downgraded the senior unsecured rating of Greyhound Lines, Inc.
to B3 from B2 reflecting Greyhound's standing as a direct obligor
within Laidlaw's corporate group with protections provided by the
covenants in Greyhound's public debentures. All ratings remain
under review for further downgrade.
The company has disclosed that the borrowers under its bank
agreement are Laidlaw Inc., a Canada corporation, and Laidlaw
Transportation, Inc., a Delaware corporation that indirectly owns
Laidlaw's U.S. assets, which comprise a substantial portion of
Laidlaw's total assets. Each borrower guarantees the bank debt of
the other. Moody's has differentiated the ratings on the bank
debt as one notch higher than the senior unsecured debt because
the guarantee by Laidlaw Transportation, Inc. benefits the banks
and provides the potential for somewhat better recovery for the
bank debt.
The ratings lowered are:
Laidlaw, Inc. - notes, debentures, and pollution control revenue
bonds to Caa2 from B2; issuer rating to Caa2 from B2; $1.5
billion Bank Revolving Credit Facility to Caa1 from B2; and shelf
registration for the issuance of senior debt to (P)Caa2 from
(P)B2.
Laidlaw One, Inc. - guaranteed exchangeable notes, which are
guaranteed by Laidlaw, Inc., to Caa2 from B2.
Greyhound Lines, Inc. senior unsecured Notes to B3 from B2.
Moody's notes that the waiver for the covenant violation of the
bank credit agreement is scheduled to expire on May 31.
Approximately $1.25 billion is drawn under the bank agreement and
the company has agreed not to make further drawdown requests.
While the company's bus businesses are now entering the seasonal
high period with lower working capital requirements, within
several months the seasonal working capital build up is expected
to begin. Also, Laidlaw has indicated that a claim has been made
for payment under one of the guarantees the company has issued on
Safety-Kleen debt. Moody's is concerned that additional lawsuits
could be filed against Laidlaw, the most recent of which relates
to non-payment by Laidlaw for certain preferred shares as part of
the Greyhound acquisition.
Laidlaw, Inc., headquartered in Burlington, Ontario, Canada, is
North America's largest provider of school busing, municipal
transit services, patient transport, and emergency room physician
management.
LAMONTS: Gottschalks Receives Court Approval For Purchase
-----------------------------------------------------------------
Gottschalks Inc. ("Gottschalks") announced that the U.S.
Bankruptcy Court for the Western District of Washington approved
Gottschalks' purchase of the operating leases, fixtures and
equipment of 37 of the 38 stores of Lamonts Apparel, Inc.
("Lamonts") for $20.1 million in cash. The court approved
purchase price of $21.8 million will be reduced by proceeds from
the termination of the Alderwood Mall site lease in Lynnwood,
Washington. Twenty-two of the acquired Lamonts stores are
located in the State of Washington, with the remainder located in
Alaska (7), Idaho (5), Oregon (2) and Utah (1).
Gottschalks will take possession of the sites on July 24, 2000,
following store inventory liquidations. The stores will be
converted to the Gottschalks banner and merchandising format, and
are expected to open in stages beginning in late-August, with
substantially all stores expected to be open by early September
2000. Gottschalks hopes to improve the sales volume and
profitability of the stores through the introduction of
cosmetics, fragrances and major apparel brands not previously
carried by Lamonts, as well as through the expansion of key
departments such as housewares, home textiles and shoes. The
Company also plans to introduce the successful Gottschalks
private-label credit card program in the new locations. The
acquisition enhances Gottschalks' presence in key Northwest
markets, and presents an opportunity to significantly
leverage corporate overhead and buying power.
Gottschalks is a regional department store chain, currently
operating forty-two department stores and twenty specialty
apparel stores in California, Washington, Oregon and Nevada.
MORRIS MATERIAL: Announces Filing of Chapter 11
-----------------------------------------------
Morris Material Handling, Inc., a global provider of equipment
and services for material handling today announced the filing of
Chapter 11 reorganization cases for itself, its parent, MMH
Holdings, Inc., and its domestic subsidiaries in the United
States Bankruptcy Court for the District of Delaware.
In connection therewith, the Company announced it has obtained,
subject to court approval, a $35 million financing facility from
Canadian Imperial Bank of Commerce as agent for a syndicate of
banks, including members of the Company's existing bank group.
This commitment is anticipated to be sufficient for the
Company's working capital needs during the pendency of the
Chapter 11 cases.
The filing is a major step in the restructuring of the Company's
balance sheet. As previously announced, the Company is in
discussions with an informal committee (the "Committee") of
holders of approximately $140 million of its 9.5% Senior
Unsecured Notes due 2008 in the principal amount of $200 million
(the "Notes"). The Company and the Committee anticipate the
conversion of the Company's debt into equity of the reorganized
Company.
Donaldson, Lufkin & Jenrette Securities Corporation acts as
financial advisors for the Company.
Morris has global operations on five continents and manufactures
a broad range of through-the-air cranes and hoists for material
handling. In addition, Morris has a network of locations to
distribute these products and provide service and support.
PACIFIC GATEWAY: In Discussions With Its Banks For Use of $52MM
---------------------------------------------------------------
Pacific Gateway Exchange, Inc. (Nasdaq: PGEX) today announced
that it is in discussions with its banks regarding the use of
approximately $52 million of cash proceeds from its previously
announced sale of certain undersea fiber optic cable assets. As
part of these discussions, the Company is seeking a waiver of
certain defaults and an extension of its May 15, 2000 repayment
obligations under its Credit Agreement. Although no assurances
are possible, the Company expects that these discussions will
quickly result in the consummation of a definitive agreement
having terms beneficial to the Company.
The Company will shortly announce its financial results for the
first quarter of 2000. The Company expects that total revenue
for the quarter ended March 31, 2000 will be approximately $125
million, and expects to report a net loss for the quarter. With
the addition of its new Chief Financial Officer and Controller,
the Company will announce its financial results on Monday, May
22, 2000 at the close of the market followed by an analyst
conference call at 4:30 p.m. Eastern Standard Time.
Pacific Gateway is a global facilities-based communications
carrier providing voice, bandwidth, data and Internet services to
a wide array of domestic and international carriers, ISPs, and
retail customers.
Pacific Gateway, through its wholly-owned subsidiary, IECom,
provides voice, data access, and travel services to the ethnic
small office/home office and residential markets in the US. Onyx
Networks, also a wholly-owned subsidiary of Pacific Gateway,
provides Internet access and high bandwidth services to the
global market.
The Company and its offshore subsidiaries are a party to 45
operating agreements that provide landing rights in 28 countries.
Pacific Gateway also has ownership interests in 32 digital
undersea fiber optic cable systems that provide for the exchange
of telecommunications traffic with foreign carriers.
In addition, Pacific Gateway's domestic network spans 12 major
metropolitan cities. The Company presently operates switching
and international gateway facilities in New York, Los Angeles,
Dallas, the United Kingdom, Russia, New Zealand, Japan,
Australia, and Germany.
PLANET HOLLYWOOD: Names New President
-------------------------------------
Planet Hollywood named senior restaurant executive Christopher R.
Thomas as President and announced it will appoint him to the
Company's Board of Directors. He also will serve as the
Company's Chief Financial Officer.
Mr. Thomas most recently served as President and Chief Executive
Officer of Los Angeles based Sizzler USA. Prior to taking over
leadership of Sizzler's domestic operations, Mr. Thomas served as
Chief Financial Officer for Sizzler's parent company, Sizzler
International, Inc.
Planet Hollywood recently emerged from Chapter 11 reorganization,
which provided the company with $30 million in new investments,
$25 million in new credit facilities and the significant
reduction of outstanding debt and other obligations.
"We look forward to announcing initiatives designed to quickly
move the company forward. We are committed and excited about
returning Planet Hollywood back to its preeminent position in the
entertainment industry," said Thomas.
RAYTECH: Announces First Quarter Results for 2000
-------------------------------------------------
Raytech Corporation (NYSE:RAY) announced net income for the
thirteen-week period ended April 2, 2000 amounting to $4.820
million or $1.38 per basic share as compared with $4.488 million
or $1.31 per basic share for the corresponding period in 1999, an
increase of 7.4 percent in net income period over period.
Albert A. Canosa, President and Chief Executive Officer of
Raytech Corporation, stated, "We enter the new millennium in a
position of strength and with an attitude of confidence. The U.S.
economy continues to grow at a sustainable pace. Our niche-market
shares are strong and our ability to perform is solid. Our
management team and employees have completed an enviable record
based on the fact that our mission is understood, our vision is
embraced by our entire team, and we have the desire and
capability to develop and deliver quality products and excellent
service on a par with, or better than the competition."
Raytech Corporation recorded net income for the thirteen-week
period ended April 2, 2000 of $4.820 million or $1.38 per basic
share as compared to $4.488 million or $1.31 per basic share for
the same period in the prior year. The earnings were driven by
strong performance in the Wet Friction segment, which recorded
increased sales of $2.8 million or 6.2% and increased operating
profit of $1.7 million of 36.2% over the same period in 1999. The
Dry Friction segment posted reduced sales of $.6 million and
improved operating profit of $.4 million while the Aftermarket
segment recorded lower sales of $2.3 million and lower operating
profit of $.5 million compared to the same period in 1999.
Operating profits for the quarter of $9.375 million exceeded the
comparative prior period amount of$8.065 million, an excess of
$1.310 million or 16.2 percent. Increases in operating profit
were offset by a higher tax rate in the first quarter 2000
compared to the first quarter of 1999.
Worldwide net sales of $67.5 million for the thirteen-week period
ended April 2, 2000 was comparable to the recorded sales amount
of$67.3 million for the same period in the prior year.
The Wet Friction segment reported increased sales of $2.8 million
over 1999 sales for the same period. Total sales of $47.2 million
for the first quarter of 2000 reflected an increase in the demand
for agricultural products and certain heavy duty products.
Domestic car and light truck sales continue at the record 1999
levels through the first quarter of 2000 and are anticipated to
remain at these levels throughout the remainder of the year.
The Aftermarket and Dry Friction segments were off from prior
year sales levels due to slower demand in the quarter for
products and negative currency translation impact, respectively.
The Company has been under the protection of the U.S. Bankruptcy
Court relating to asbestos personal injury and environmental
liabilities since March 1989. The ultimate liability of the
Company with respect to asbestos-related, environmental or other
claims cannot presently be determined.
Raytech Corporation is headquartered in Shelton, Connecticut,
with operations serving world markets for energy absorption and
power transmission products, as well as custom-engineered
components.
SERVICE CORPORATION: Moody's Lowers Debt Ratings; Under Review
--------------------------------------------------------------
Moody's Investors Service lowered the following debt ratings of
Service Corporation International ("SCI") and placed the revised
ratings under review for further downgrades:
senior unsecured notes - lowered to Ba3 from Ba2
$300 Million 364-day revolving credit facility, due June, 2000 -
lowered to Ba3 from Ba2
$600 Million 364-day revolving credit facility, due Nov. 2000 -
lowered to Ba3 from Ba2
$700 Million five-year revolving credit facility, due June 2002 -
lowered to Ba3 from Ba2
senior shelf registration - lowered to (P) Ba3 from (P) Ba2
senior subordinated shelf registration - lowered to (P) B2 from
(P) B1
junior subordinated shelf registration - lowered to (P) B3 from
(P) B2
senior implied rating - lowered to Ba3 from Ba2
senior unsecured issuer rating - lowered to Ba3 from Ba2
Moody's also lowered to (P) "b3" from (P) "b2" the preferred
shelf registration rating of SCI Capital Trust.
The revised ratings reflect SCI's disappointing operating
performance and Moody's concerns over the company's ability to
maintain adequate liquidity and to repay, refinance or extend a
substantial amount of debt that is scheduled to expire over the
next year and a half, most of which consists of unsecured bank
loans. It is critically important that SCI remain in compliance
with the terms of its bank credit agreements. Absent sufficient
cash flow from operations or from asset sales, additional
borrowings under the company's revolving credit facilities could
be required in order to repay upcoming note maturities.
Reflecting SCI's weak cash flow and tight liquidity, there is the
possibility that the company's bank credit agreements will need
to be renegotiated at some point in the future. Any amendments or
substantial changes in the terms and conditions of the credit
agreements could have negative implications for bondholders.
Due to SCI's rapid growth, primarily through fully valued
acquisitions, the company has accumulated nearly $4 billion of
debt, a figure that exceeds its 1999 annual revenues by nearly
1.2 times. This heavy debt burden, combined with an increasingly
competitive operating environment, soft sales volume, growing
margin pressures (partly due to changes in sales mix) and
excessive operating costs, has resulted in a deterioration in
SCI's operating performance, a deterioration that has become
increasingly apparent now that it has reduced its acquisition
activity. Adjusting for substantial working capital needs and
other absorptions of cash, SCI's annual cash flow is weak
relative to its heavy debt burden and substantial annual debt
service requirements. Book equity of only $3.5 billion at March
31, 2000 resulted in high debt-to-total book capitalization of
53% and tangible net worth of $1 billion. The company's
historical financial statements contain a significant amount of
noise due to large restructuring charges.
SCI's management, some of whom are new, is implementing a major
turnaround plan aimed at, among other things, lowering the
company's operating costs, improving the profitability of
existing properties, attracting different customer groups, and
placing an greater emphasis on strengthening cash flow, rather
than earnings per share. Additionally, SCI has reduced its
acquisition activity and has focused its efforts on non-core
asset sales and debt reduction. While the turnaround plan may be
reasonable, its execution risk is high. Also, the timing and
sustainability of any meaningful improvements in the company's
earnings, cash flow and debt reduction efforts are uncertain.
Moody's believes strong competitive pressures in the US,
especially from smaller and less leveraged independent deathcare
providers, have contributed to the company's poor operating
performance. In addition, its international operations have also
come under pressure, especially in the funeral service business.
Although management is exploring ways in which to enhance the
growth and profitability of its foreign operations, the impact
that these efforts will have on its consolidated profits is
uncertain. Foreign asset sales could represent a significant
source of debt reduction for SCI.
The company is selling off some of its non-core assets in order
to reduce its heavy debt burden. Its Provident subsidiary, which
provides financing for independent funeral home and cemetery
operations, represents a potential sale. Although asset sales
will likely improve SCI's financial flexibility, their timing and
the impact they could have on the company's cash flow is
uncertain.
Moody's plans to have a discussion with management in order to
address in more detail the aforementioned concerns as well as the
execution and timing of its turnaround strategy - especially as
it relates to improving the cash flow of the company. In
addition, refinancing and liquidity risks will be explored, as
well as trends in market share, possible asset-writedowns /
charge-offs, and the ability of the company to remain in
compliance with terms of its credit agreements. Moody's will also
attempt to gain a better understanding of the company's financing
strategy going forward and how it ties in with the company's
operating plan. The company's ongoing ability to support its high
amount of intangible assets will be evaluated.
Headquartered in Houston, Texas, SCI provides funeral and
cemetery services in 20 countries and on five continents. As of
December 31, 1999, the company operated 3,823 funeral service
locations, 525 cemeteries and 198 crematoria. The company's
revenues totaled $3.3 billion in 1999.
SILVER CINEMAS: Announces Voluntary Chapter 11 Filing
-----------------------------------------------------
Silver Cinemas International Inc. today announced that it and its
wholly owned subsidiaries, Silver Cinemas Inc., Landmark Theatre
Corp. and Landmark Theatre USA Inc., have filed voluntary
petitions to reorganize under Chapter 11 of the United States
Bankruptcy Code.
The filing took place in the United States Bankruptcy Court for
the District of Delaware in Wilmington, Del. As part of the
reorganization, the company announced that it had received a
commitment from Foothill Capital Corp. to provide $50 million in
debtor-in-possession financing.
Silver Cinemas International is a Dallas-based motion picture
exhibitor, which operates 84 theaters in 17 states, including 52
theaters run by Landmark Theatres, a wholly owned subsidiary of
Silver and the nation's largest art film exhibitor.
SILVER CINEMAS: Case Summary and 20 Largest Unsecured Creditors
----------------------------------------------------------------
Debtor: Silver Cinemas International, Inc.
404 Beltline Road, Suite 205
Addison, TX 75001-4363
Type of Business: Operation of motion picture theatres
specializing in specialty (independent) and second-run films.
Petition Date: May 16, 2000 Chapter 11
Court: District of Delaware
Bankruptcy Case No.: 00-01978
Debtor's Counsel: William P. Bowden
Ashby & Geddes
PO Box 1150
Wilmington, DE 19899
(302) 654-1888
Total Assets: $ 131,000,000
Total Debts: $ 147,000,000
12 Largest Unsecured Creditors
Oacktree Capital
Management, LLC
333 South Grand Ave
28th Floor
Los Angeles, CA 90071
Patricia A. Wachtell
Managing Director
Tel: (213) 830-6408 10.5% Senior
Fax: (213) 830-6494 Subordinated Bonds
$ 57,000,000
Putnam Investment
Management Inc.
One Post Office Square
Boston, MA 02109
Tel: (800) 225-1581 10.5% Senior
Fax: (617) 760-9244 Subordinated Bonds
$ 14,250,000
Halycon/Alan B. Sifka
Management Co. LLC
447 Madison Avenue, 8th Flr
New York, NY 10024
Robert E. Davis
SVP
Tel: (212) 303-9455 10.5% Senior
Fax: (212) 935-1831 Subordinated Bonds
$ 10,750,000
Harvard Capital
Management 10.5% Senior
(no address listed) Subordinated Bonds
$ 3,000,000
Bennett Management Corp.
2 Stamford Plaza, Suite 1501
281 Tresser Blvd.
Stamford, CT 06901
Warren Frank
Tel: (203) 353-3101 10.5% Senior
Fax: (203) 353-3113 Subordinated Bonds
$ 3,000,000
BEA Associates
153 East 53rd St, 58th Flr
New York, NY 10022
Shannon James
Tel: (212) 832-2626 10.5% Senior
Fax: (212) 355-1622 Subordinated Bonds
$ 2,700,000
Goldman, Sachs & Co.
Asset Management
1 New York Plaza
New York, NY 10004
Patricia Baldwin
Tel: (212) 902-8244 10.5% Senior
Fax: (212) 902-1431 Subordinated Bonds $ 2,500,000
Chicago Tribune Trade debt $ 9,276
Kino International Trade debt $ 4,937
The Austin Chronicle Trade debt $ 3,914
Senterra Management-
Greenway Parking
General Trade debt $ 3,507
San Diego Reader Trade debt $ 2,549
SUNTERRA: DCR Downgrades Ratings to 'CCC'
-----------------------------------------
Duff & Phelps Credit Rating Co. (DCR) has downgraded the senior
note and senior subordinated note ratings of Sunterra Corporation
(NYSE: OWN) to 'CCC' (Triple-C). The ratings remain on Rating
Watch-Down where they were first placed on January 21, 2000.
The rating action follows the company's announcement that it
failed to make a scheduled interest payment on its $140 million
9.25 percent senior notes that was due on May 15 as well as the
occurrence of an event of default under certain credit facilities
due to non-payment.
The securities affected by this downgrade include:
$140 million 9.25 percent senior notes due 2006
'CCC' (Triple-C) from 'B' (Single-B)
$200 million 9.75 percent senior subordinated notes due 2007
'CCC' (Triple-C) from 'B-' (Single-B-Minus)
Additionally, the ratings of the company's $138 million 5.75
percent convertible subordinated notes due 2007 have been
reaffirmed at 'CCC' (Triple-C), but also remain on Rating Watch-
Down.
OWN's liquidity is extremely low as the company's severely
weakened operating performance combined with certain asset write-
downs and one-time charges have resulted in violations of net
worth and net worth-related financial covenants on several of its
credit facilities, which has presently placed the company without
any external funding sources. As a result, OWN did not have the
ability to make mandatory payments of $4 million on its senior
bank credit facility and $1.1 million on its pre-sale line that
were due on May 1.
The company is presently negotiating with its banks and financial
institutions to seek waivers of these violations and to obtain
their agreement not to declare the entire indebtedness due and
payable, which could trigger a cross default on the above-rated
notes. At the same time, OWN is pursuing major asset sales to
maintain the necessary liquidity to meet its debt obligations and
provide the necessary funds to continue operations.
Unsatisfactory resolution of these negotiations and initiatives
could lead to a further ratings downgrade to 'DD' (Double-D).
URANIUM RESOURCES: Reports Net Loss of $843,000 For First Quarter
-----------------------------------------------------------------
Uranium Resources, Inc. ("URI") (OTCBB:URIX) reported a net loss
of $843,000 or ($0.06) per share for the first quarter ended
March 31, 2000 compared to a net loss of $786,000 or ($0.07) per
share for the first quarter of 1999.
Revenues in the first quarter of 2000 of $1,082,000 resulted from
both uranium deliveries ($937,000) and the termination of a long-
term uranium sales contract ($145,000).
The Company delivered 98,000 pounds of uranium during the first
quarter of 2000 (an average sales price of $9.58 per pound). The
Company made no uranium deliveries during the first quarter of
1999.
Cost of uranium sales for the first quarter of 2000 was
$1,494,000 and consisted of $800,000 from purchased uranium sold,
$500,000 of stand-by and other operating costs during the quarter
and $194,000 from a writedown in the carrying value of the
Company's uranium properties. Cost of uranium sales in the first
quarter of 1999 resulted from a lower of cost or market
adjustment applied to the Company's inventory at March 31, 1999.
In 1999 and the first quarter of 2000 the Company monetized all
of its remaining long-term uranium sales contracts and sold
certain of its property and equipment to maintain a positive cash
position. The Company has exhausted all of its readily available
sources of cash to support continuing operations and expects to
be unable to continue in business beyond the next 45-60 days
unless it can secure a cash infusion. The Company is currently
pursuing such sources of cash but there is no assurance that it
will be successful in these efforts. If the Company is unable to
secure such a cash infusion, it will consider all of its possible
alternatives, including a possible filing in bankruptcy.
VISTA EYECARE: Reports First Quarter Financial Results
------------------------------------------------------
Vista Eyecare, Inc. announced results for the first quarter ended
April 1, 2000. Net sales of $86.3 for the first quarter are
relatively flat to net sales of $86.6 million for the first
quarter ended April 3, 1999. Prior to restructuring provisions
and impairment losses related to the closure of high
loss stores, the Company reported operating income of $2.8
million in the first quarter of 2000, a decrease from $7.1
million reported in the first quarter of 1999.
Operating results for the first quarter include provisions to
write-down assets and close low volume, high loss free-standing
stores. First quarter results include a provision of $2.7
million to write-down fixed assets for all 91 stores as well as a
provision for lease termination costs and other closing
costs of $1.6 million for the initial group of 37 stores closed.
The total impairment and restructuring reserve expensed in the
first quarter was $4.3 million, of which $400,000 represents cash
costs to close the stores. Where applicable, the operating leases
for all the closed stores have been rejected in the bankruptcy
proceedings; consequently, the ultimate settlement and payment of
lease termination costs for each landlord will be resolved in the
Chapter 11 case.
The Company also stated that it expects to record additional
charges in the second quarter for its estimate of lease
settlement costs and other costs related to the remaining closure
of 54 under-performing free-standing vision centers. The Company
currently estimates this charge to be between $1.7 million
and $2.2 million. Ultimate payment amounts will be subject to
final court resolution.
The Company incurred a pre-tax operating loss of $6.8 million in
the first quarter, which results in an income tax benefit of
approximately $3.8 million. The Company has established a
valuation allowance against the net operating loss carry forward.
Taking into consideration the valuation allowance and the
restructuring provisions, the Company will report a net loss in
first quarter of $6.8 million, or $0.32 per share.
For the total company, comparable store sales were negative 2.5
percent for the quarter. The core host business, which excludes
stores acquired from Frame-n-Lens and New West Eyeworks, reported
an increase of 6 percent for comparable store sales. For the
acquired entities comparable store sales were negative 18 percent
for the first quarter.
Chairman and Chief Executive Officer James W. Krause stated, "We
are disappointed in our first quarter consolidated results. Our
core host business performed extremely well, however, that
improvement was more than offset by poor sales and profit results
from the acquired businesses. To improve profitability in our
free-standing operations, we closed 91 free- standing stores in
April which had generated substantial losses. Additionally, we
are continuing to review and change our marketing programs in an
effort to have a more meaningful impact in improving sales."
The Company is currently in compliance with all financial
covenants contained in its debtor-in-position credit facility,
which was approved by the Bankruptcy Court on May 9, 2000.
Vista Eyecare, Inc. is one of the nation's largest retail optical
companies. The Company filed for protection under Chapter 11 of
the bankruptcy laws on April 5, 2000.
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S U B S C R I P T I O N I N F O R M A T I O N Troubled Company
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