The 13 1/2% noteholders who allegedly pressured Envirodyne Industries Inc. into bankruptcy get nothing under the reorganization plan the company and its subsidiaries filed yesterday.
"I would imagine they are quite upset, a little hot under the collar," Hope Crifo, a high-yield analyst at Duff & Phelps/MCM Investment Research Co., said yesterday of the 13 1/2% subordinated noteholders.
"Basically the company's proposed reorganization plan is really a cramdown threat," Crifo said. "This is a very confrontational approach to take."
Calls to Envirodyne officials went unanswered yesterday.
The 13 1/2% holders, the most Junior creditor class, filed a Petition to force the company into involuntary bankruptcy on Jan. 6, but Envirodyne subsequently filed to have that changed to voluntary bankruptcy on Jan, 7, Crifo said,
Under yesterday's plan, trade creditors of Envirodyne's subsidiaries would be paid in full in cash, according to a release from Envirodyne. Except for the 13 1/2% debtholders, Envirodyne's remaining debt securities holders would receive either new notes or common stock of the reorganized Envirodyne, the release says.
Envirodyne's 14 1/2% senior discount noteholders will receive $219,262,000 of new 9 3/4% senior notes due Dec. 1, 2001.
The company's 14% senior subordinated debenture holders will get common stock representing approximately 96.6% of the initial common equity of the reorganized Envirodyne,
The company's existing common stock will be canceled and holders will get nothing.
Shares of common equity will be reserved for issuance related to a management option plan. On a fully diluted basis, assuming all management options are exercised and various disputed claims are favorably resolved, common equity ownership of the reorganized Envirodyne would look roughly as follows:
* 14% senior subordinated Debentures, 88.7%
* 11 1/4% senior pay in kind notes, 3%
* allowed general unsecured claims, 0.1%
* management option plan, 8.2%
Envirodyne has asked the court to schedule a hearing on the disclosure statement. The statement was filed with the U.S. bankruptcy court together with the joint reorganization plan.
The company plans to seek support of its senior secured lenders, equipment lessors, members of the Official Bondholders' Committee, and members of the Trade Creditors' Committee, the release says.
The company hopes to get the plan confirmed and consummated by the end of 1993, the release says.
Also yesterday, the Circle K Corp. said a federal bankruptcy court judge issued an interim order confirming its reorganization plan and rejecting one proposed by its bondholders.
Circle K's plan calls for CK Acquisitions to purchase the company for $399.5 million, according to a Circle K release.
The court told the Phoenix-based convenience stores company that it will issue a final, written confirmation order later. Circle K expects to emerge from Chapter 11 and complete the sale to CK Acquisitions by June 30, the release says.
"All of us at Circle K view Judge [George] Neilsen's interim order as a very positive step, one that we are eager to see ratified in his formal written opinion," the release quoted Bart A. Brown Jr., Circle K's chairman, as saying.
Circle K said three of its four major creditor groups endorsed its plan.
In secondary trading yesterday, high-yield bonds finished firm and up 1/4 point.
"I still see a lot of buyers out in retail land," one trader said. Gainers included Envirodyne's 14 1/2% and zero coupon debt, which rose as much as three points. Some Quantum Chemical Corp. bonds moved up 1/2 point. Spreads on high-grade bonds were unchanged.
West Penn Power Co. issued $102 million of 5.5% first mortgage bonds due 1998. The noncallable bonds were priced at 99.545 to yield 5.606% or 35 basis points over comparable Treasuries. Moody's rates the offering Aa3, while Standard & Poor's and Duff & Phelps Credit Rating Co. rate it A-plus. A group led by Morgan Stanley & Co. won competitive bidding to underwrite the offering.
South Carolina Electric & Gas Co. issued $100 million of 7.625% first mortgage bonds due 2023. Noncallable for 10 years, the bonds were priced at 99.704 to yield 7.65% or 75 basis points over comparable Treasuries. Moody's rates the offering A 1, Standard & Poor's rates it A, and Duff & Phelps Credit Rating Co. rates it A-plus. PaineWebber Inc. was lead manager of the offering.
Federal Home Loan Mortgage Corp. issued $100 million of 6.5% first mortgage bonds due 2003. Noncallable for three years, the bonds were priced initially at par to yield 44 basis points over comparable Treasuries. Goldman, Sachs & Co. managed the offering.
West Penn Power Co. issued $80 million of 6.375% first mortgage bonds due 2003. The noncallable bonds were priced at 99.401 to yield 6.457% or 40 basis points over comparable Treasuries. Moody's rates the offering Aa3, while Standard & Poor's rates it A-plus. A group led by Goldman Sachs won competitive bidding to underwrite the offering.
Hercules Inc. issued $75 million of 6.625% notes due 2003. The noncallable notes were priced at 99.925 to yield 6.635% or 58 basis points over comparable Treasuries. Moody's rates the offering A2, while Standard & Poor's rates it A. J.P. Morgan Securities Inc. was lead manager of the offering.
Public Service Company of Oklahoma issued $50 million of 6.5% first mortgage bonds due 2005. The noncallable bonds were priced at 99.088 to yield 6.611% or 55 basis points over comparable Treasuries. Moody's rate the offering Aa2, while Standard & Poor's rates it AA-minus. Duff & Phelps Credit Rating Co. rates it AA. Merrill Lynch & Co. was lead manager of the offering.