PE Firms Bid for Georgian Assets
If a binding sale and purchase agreement were to be executed with the Offering Group, the Company intends to undertake the sale through a court supervised auction conducted in accordance with section 363 of 11 U.S.C. ss.ss. 101 et seq (the "Code") in a case to be filed in the United States Court for the District of Delaware (the "Wind-Up"). Given the purchase price proposed by the Offering Group, the terms of certain agreements concluded with preferred stockholders as described later herein, and present management estimates of certain costs and liability settlements, holders of the Company's common stock would likely receive approximately $1.60 per share and holders of preferred stock approximately $71.00 per share in the Wind-Up.
The Company and the Offering Group presently expect that a binding sale and purchase agreement could be executed in early December 2006. At the time of its filing, the Company also intends to immediately file a chapter 11 plan. Upon the approval of the plan, all of the preferred and common equity interests in the Company will be converted into the right to receive the cash remaining after payment of all allowed claims and the costs and expenses associated with the sale and the Wind-Up (as further described herein, the "Net Distributable Cash"). In this connection, the Company announced that it has entered into a lock-up, support and voting agreement with representatives of holders of approximately 80% of its 4.1 million outstanding shares of preferred stock (the "Preferred Representatives") committing the Preferred Representatives to support a plan in the Wind-Up providing essentially to distribute to preferred stockholders $68 for each preferred share from Net Distributable Cash up to $420 million and to distribute pro rata to each preferred share one-half of Net Distributable Cash in excess of $420 million. The remaining balance of Net Distributable Cash would be distributed pro rata to each common share.
The full text of the agreements concluded with the Offering Group and the Preferred Representatives is being published coincident with this press release on the Company's website and via Form 8-K provided to the United States Securities and Exchange Commission. In a parallel press release, the Company is also announcing preliminary unaudited financial results of its principal Georgian business, Magticom, for fiscal years 2004 and 2005, along with certain forward-looking estimates previously provided to the Offering Group and the Preferred Representatives under non-disclosure agreements.
Metromedia International Group Inc. (Amex: MMG)