National Auto Credit Announces Purchase
11 April 2000
National Auto Credit Announces Purchase
SOLON, Ohio, April 10 National Auto Credit, Inc.
(OTC Bulletin Board: NAKD) announced today that a wholly-owned subsidiary of
National Auto Credit, Inc. ("NAC") purchased a 50% membership interest in the
Angelika Film Center, LLC ("AFC") from Reading Entertainment, Inc.
("Reading"). AFC is the owner and operator of the Angelika Film Center,
consisting of a multiplex cinema and cafe complex, located in the Soho
District of Manhattan in New York City. The 50% membership interest was
purchased for 8,999,900 shares of the Common Stock of NAC, and 100 shares of
Series A Preferred Stock, (representing 100% of the class of Series A
Convertible Preferred Stock outstanding). As a result of the transfer, AFC is
now owned 50% by NAC, 33.33% by Reading and 16.67% by Sutton Hill Associates.
The Angelika will continue to be managed by the City Cinemas Chain.
The NAC Series A Convertible Preferred Stock is convertible into shares of
NAC Common Stock on a one for one basis, subject to traditional antidilution
adjustment; it votes share for share with the Common Stock as a single class,
provided that as a class the Series A Preferred must separately approve any
NAC charter or bylaw amendments; it has a liquidation value of $1.50 per
share; and is entitled to a dividend preference equal to any dividends
declared on the NAC Common Stock (determined on a per share basis).
NAC also purchased from Reading two separate and independent options to
acquire additional cinema assets owned by Reading in the United States. Under
the first option, NAC has the right to acquire the remaining 33.33% Membership
Interest in AFC owned by Reading in exchange for the issuance of an additional
6 million shares of NAC Common Stock. To the extent authorized but unissued
shares of NAC Common Stock are not available for such purpose, NAC has the
right to substitute cash for such shares. The option can be exercised for a
period of 45 days, through and including May 20, 2000. The remaining 16.67%
interest would continue to be owned by Sutton Hill Associates, and the
Angelika would continue to be managed by the City Cinemas Chain.
Under the second option, which is independent of the first option, NAC has
the right to acquire the remainder of Reading's domestic cinema exhibition
assets for cash (including Reading's rights to acquire the City Cinemas Chain
of cinemas and related real estate in Manhattan), and, if NAC has not
previously exercised its option to acquire Reading's 33.33% interest in AFC
for stock, Reading's remaining interest in AFC. If NAC exercises this right,
it is required to give to Reading's affiliate, Citadel Holding Corporation, a
right to participate in such transaction on a 50/50 basis with NAC. The
option can be exercised for a period of 60 days, through and including June 5,
2000. NAC has paid to Reading $500,000 in consideration of this option. NAC
has the right to extend the option for two thirty day periods by payment of an
additional $100,000 for each such thirty day extension period. The decision
whether or not to proceed with the exercise of either or both of such options
rests with NAC and not with Reading.
Further details of the transaction will be set forth in a Form 8-K to be
filed by NAC with the Securities and Exchange Commission.
NAC also announced today that its Board of Directors elected former NAC
directors William S. Marshall and John A. Gleason to fill the two vacancies on
the Board of Directors that resulted from the prior resignations of Allen D.
Rice and Richard M. Cohen.
NAC's Board of Directors is assessing its strategic business alternatives
and will announce the direction it intends to take in its business when the
Board has fully weighed the available alternatives and has reached a decision.
This news release may include statements that constitute forward-looking
statements, usually containing the words "believe," "estimate," "project,"
"expects," 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, the company
undertakes no obligation to update these statements for revisions or changes
after the date of this document.