Olympia & York Developments Ltd. today will ask an Ontario court to push back the voting period for its restructuring plan so it can submit a revised plan in mid-December.
If the court allows it, creditors would vote on the revised plan from Jan. I 1 to 15, Frank Ternan, an Olympia & York spokesman, said Friday.
Currently, creditors are scheduled to vote on the existing plan between Nov. 25 and Nov. 30, he said.
"On the first plan, certain creditors said they would not support it," Ternan said. "Those creditors said they will support [the revised] plan." He declined to name who they are.
The "fundamental purpose" of the new plan is to stabilize Olympia & York for a five-year period, a release by the company says. Gerald Greenwald, president of Olympia & York, said the company and key creditor groups developed the new plan over the past 10 days.
"The revisions simplify the plan put forward on Oct. 27, appear to satisfy principal concerns of creditors and provide time to complete the reorganization of [U.S.] and other assets," Greenwald said in the release.
The revised plan would preserve creditors' unsecured and undersecured claims, which would mature in five years with interest accruing at the current rates, according to the release. The earlier plan to issue bonds with the right to convert into 90% of the equity of Olympia & York Developments Ltd. has been scrapped. The new plan calls for the Reichmann family to retain 100% of the company's shares, though creditors' substantial claims will stay in place.
All creditors holding security over Olympia & York-owned assets can choose to either have the loans restructured as set forth in the plan or can enforce their security.
The company will continue with its current plan to start a new Canadian real estate company called O&Y Properties that would be owned 90% by Olympia & York Developments and 10% by the Reichmanns.
If the applicable secured creditors consent, the major remaining Canadian estate that Olympia & York owns would be transferred to O&Y Properties.
As proposed earlier, 240 Sparks Street, Ottawa, a property for which $50 million of publicly traded bonds were issued, will be given to O&Y Properties. The principal and interest payments on those bonds will be paid according to their terms.
Lenders with loans secured by buildings can also restructure their loans under the plan or enforce their security. If they choose to enforce their security, O&Y Properties will continue to manage and lease the properties until its services are no longer needed.
Olympia & York will not go ahead with its proposal to create a joint venture between four Canadian banks and O&Y Properties with regard to three downtown Canadian properties: First Canadian Place, Exchange Tower, and Scotia Plaza.
Olympia & York Developments also will scrap its previous proposal to spin off its U.S. real estate into a new company. The revised plan calls for ownership of the revised plan to remain the same with Olympia & York Developments holding an indirect 80% stake and the Reichmann family holding 20%, subject to existing indebtedness.
In another matter, O&Y U.S. Development Corp. received an extension from Swiss Bank Corp. on its Friday deadline to satisfy a more than $8 million summary judgment relating to a letter of credit on 55 Water Street in lower Manhattan, an O&Y spokesman said.
The company has until 5 p.m. today, the spokesman said.
A Swiss Bank Corp. spokeswoman an declined to comment on whether the bank had extended the Friday deadline until today. She did, say, however, that Swiss Bank is continuing to weigh its options and is discussing the matter with O&Y. In secondary trading, spreads tightened slightly in the high-grade market in quiet activity. High-yield bonds lost about 1/8 point.
Merrill Lynch & Co. issued $200 million of 5.875% notes due 1995. The noncallable notes were priced at 99.796 to yield 5.95%, or 80 basis points over comparable Treasuries. Moody's Investors Service rates the offering A1, while Standard & Poor's Corp. rates it A. Merrill Lynch & Co. lead-managed the offering.
California Hotel Finance Corp. issued $185 million of 11% senior subordinated notes due 2002. The notes are callable after five years at 104.125 moving to par in 1999. Moody's rates the offering B2, while Standard & Poor's rates it B-plus. Salomon Brothers Inc. lead managed the offering.
Federal Farm Credit Bank issued $65 million of 5.375% medium-term step-up notes due 1997. The coupon steps up to 7.25 in 1994. Bear, Stearns & Co. sole-managed the offering.
Standard & Poor's has given a preliminary BB rating to Abitibi-Price Inc.'s $300 million of debt filed under a Rule 415 shelf registration.
Abitibi-price Inc. is among the world's largest producers of newsprint and uncoated groundwood papers.
"The rating reflects this reliance on a cyclical commodity business, as well as uncertainties about the firm's future ownership," Standard & Poor's said in a.release.