Ugly Duckling Corp. Announces Supplemental Exchange Offer
23 November 1998
Ugly Duckling Corp. Announces Supplemental Exchange Offer
PHOENIX--Nov. 23, 1998--Ugly Duckling Corp. Monday announced an offer to exchange up to $16,486,582 principal amount of its 12 percent Subordinated Debentures due 2003 for up to 2,536,397 shares of its common stock.On Oct. 19, 1998, the company successfully completed a prior exchange offer of subordinated debentures for 2,463,603 shares of its common stock.
This exchange offer is being made on substantially the same terms as the prior exchange offer, and the debentures issued under this offer will be identical to those offered under the previous offer.
Commenting on the supplemental exchange offer, Chairman and Chief Executive Officer Ernest C. Garcia II stated: "Among other reasons, we felt it was appropriate to allow investors another chance to evaluate the opportunity to exchange their shares of our common stock for these debentures in light of our recent decision to change the structure of our future securitizations."
Under the terms of the new exchange offer, each share of common stock can be exchanged for $6.50 principal amount of debentures. The debentures will bear interest at 12 percent per year from Oct. 23, 1998, payable semi-annually each April 15 and Oct. 15 starting on April 15, 1999, until they are paid in full.
The principal amount of the debentures will be due on Oct. 23, 2003, subject to prepayment at the company's option without penalty or premium.
The exchange offer will be made only through, and upon the terms and conditions described in the company's Offering Circular, dated Nov. 20, 1998, and related letter of transmittal. The company will accept a maximum of 2,536,397 shares in the exchange offer. The offer and related withdrawal rights will expire at 5 p.m. Eastern Time on Tuesday, Dec. 22, 1998, unless extended.
Harris Trust Co. of New York will act as exchange agent for the offer. Information about the offer can be obtained from Corporate Investor Communications Inc., the designated information agent, at 888/673-4478 (toll free).
With headquarters in Phoenix, Ugly Duckling is a used-car sales and finance company that operates the nation's largest chain of used-car dealerships focused exclusively on the sub-prime market. The company underwrites, finances and services sub-prime contracts generated at its 50-plus Ugly Duckling Car Sales dealerships.
Cygnet Financial Corp., a wholly owned subsidiary of Ugly Duckling, provides various financial services primarily to the sub-prime segment of the automobile financing industry.
This news release may include statements that constitute forward-looking statements, usually containing the words "believe," "estimate," "project," "expect" or similar expressions. These statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements inherently involve risks and uncertainties that could cause actual results to differ materially from the forward-looking statements. By making these forward-looking statements, Ugly Duckling undertakes no obligation to update these statements for revisions or changes after the date of this news release. Factors that could cause or contribute to such differences include, but are not limited to, factors detailed in this news release and in the sections titled "Management's Discussion and Analysis of Financial Condition and Results of Operations -- Risk Factors," "Factors That May Affect Future Results and Financial Condition" and "Factors That May Affect Future Stock Performance" in Ugly Duckling's most recent reports on Form 10-K and Form 10-Q (including Exhibit 99 to any such Form 10-Q), factors detailed in the section "Risk Factors" in Ugly Duckling's definitive proxy statement dated Aug. 4, 1998, and Ugly Duckling's Offering Circular, dated Nov. 20, 1998, and elsewhere in Ugly Duckling's Securities and Exchange Commission filings.