Envirotest Solicits Consent to Amend Indentures From Holders of Its Notes Due 2001 and 2003
4 August 1997
Envirotest Solicits Consent to Amend Indentures From Holders of Its Notes Due 2001 and 2003
- Amendments Would Permit Company to Make Additional Restricted Payments and
Investments -
SUNNYVALE, Calif., Aug. 4 -- Envirotest Systems Corp.
today announced that it is soliciting consents from the holders
of its outstanding 91/8% Senior Notes due 2001 and 95/8% Senior Subordinated
Notes due 2003 to amend the indentures governing the notes. The record date
for the Consent Solicitation is July 30, 1997 with an expiration date of
5:00 p.m., New York time on Monday, August 11, 1997.
The proposed amendments, if approved by the holders of a majority of each
issuance of the notes, will permit the Company to make $10 million in
additional restricted payments and investments (as defined in the indentures).
In addition, the proposed amendments provide that on or prior to
September 30, 1997, the Company may elect for one or two additional increases
of $5 million each.
The proposed amendments, however, will not become operative unless and
until the Company makes an offer to holders of the 91/8% Senior Notes due 2001
to purchase up to $50 million aggregate principal amount of the notes at a
price of par plus accrued and unpaid interest or at a price pursuant to a
Dutch Auction tender offer with the high end of the range of par plus accrued
and unpaid interest. The Company is considering whether to commence such an
offer and it may elect to do so upon the determination that the requisite
consents to the proposed amendments have been received.
If the Company receives the requisite consents for the proposed amendments
and the amendments become operative, the note holders as of the record date
who properly consent to the proposed amendments will receive a payment of 1.0%
of the principal amount of the notes covered by the consent, plus an
additional .5% of the principal amount for each $5 million optional increase
exercised by the Company.
The proposed amendments will provide the Company with the opportunity to
buy back shares of its common stock and greater flexibility to pursue its
growth strategy to the extent such additional availability is not used to buy
back stock. Although the Company is currently considering such a buy back, no
determination has been made whether, and to what extent, the Company may
initiate a buy back of shares of its common stock. The Company may elect to
take action on these matters promptly upon the determination that the
requisite consents to the proposed amendments have been received.
Envirotest Systems Corp. is the largest provider of vehicle inspection
services in the country and the only domestic company that provides vehicle
inspection services outside the United States.
This press release contains statements that are forward-looking statements
within the meaning of Section 21E of the Securities Exchange Act of 1934,
which represent the Company's expectations or beliefs concerning future
events. The Company cautions that these statements are further qualified by
important factors that could cause actual results to differ materially from
those in the forward-looking statements. A number of such factors are set
forth in the Company's filings with the Securities and Exchange Commission,
including the Company's Annual Report on Form 10-K and Quarterly
Reports on Form 10-Q.
SOURCE Envirotest Systems Corp.