EchoStar Completes Exchange of 12 1/8% Series B Preferred Stock and Announces Tender Offer to Purchase 12 1/8% Senior Exchange Notes Due 2004 Issued in Exchange Therefore
LITTLETON, Colo.--(BUSINESS WIRE)--Jan. 4, 1999--EchoStar Communications Corp. (NASDAQ: DISH, DISHP) announced today that it has commenced a cash tender offer to purchase any and all of its outstanding $232,365,391 aggregate principal amount of 12 1/8% Senior Exchange Notes due 2004 (the "Exchange Notes") that were issued today in exchange for all of its outstanding 12 1/8% Series B Senior Redeemable Exchangeable Preferred Stock due 2004.
The tender offer is part of a plan to refinance existing indebtedness at more favorable rates and terms. The terms and conditions of the tender offer are set forth in an Offer to Purchase and Consent Solicitation Statement and a related Consent and Letter of Transmittal. The tender offer will expire at 12:00 midnight, Eastern Time on Monday, February 1, 1999, unless extended.
In conjunction with the tender offer, EchoStar is soliciting consents to certain proposed amendments to the indenture governing the Exchange Notes that would eliminate substantially all of the restrictive covenants and would amend or waive certain other provisions. Adoption of the proposed amendments requires the consent of holders of not less than a majority, in the case of certain proposed amendments, and not less than two-thirds, in the case of the other proposed amendments, of the aggregate principal amount of Exchange Notes. Holders who tender their Exchange Notes will be required to consent to the proposed amendments.
The purchase price for the Exchange Notes will be determined in accordance with a pricing formula that is based on a fixed spread of 75 basis points above the yield on the 6 1/8% U.S. Treasury Note due July 31, 2000. The purchase price includes a consent payment of $20 per $1,000 principal amount of the Exchange Notes to holders who tender their Exchange Notes and give their consent at or prior to 12:00 midnight, Eastern Time on Friday, January 8, 1999, unless extended.
Closing of the tender offer is subject to the receipt by EchoStar or its subsidiaries of the proceeds of a new debt financing or financings necessary to pay the consideration payable in connection with the tender offer and the consent solicitation, the receipt of the required consents from the holders of Exchange Notes, the receipt of the required consents and waivers from the holders of Related Notes as described below and certain other conditions described in the Offer to Purchase and Consent Solicitation Statement.
On December 23, 1998, EchoStar commenced cash tender offers to purchase any and all of the following debt securities issued by its direct and indirect subsidiaries: the $375 million aggregate outstanding principal amount of 12 1/2% Senior Secured Notes due 2002 issued by EchoStar DBS Corporation; the 12 7/8% Senior Secured Discount Notes due 2004, with an accreted value as of January 1, 1999, of $592.8 million, issued by Dish, Ltd.; and the 13 1/8% Senior Secured Discount Notes due 2004, with an accreted value as of Jan. 1, 1999, of $498.1 million, issued by EchoStar Satellite Broadcasting Corporation (collectively, the "Related Notes"). EchoStar is also soliciting consents from the registered holders of the Related Notes to amendments to the indentures governing the Related Notes. The proposed amendments relating to the Related Notes include amendments similar to the proposed amendments to the Exchange Notes and EchoStar is offering similar compensation to holders of Related Notes as it is offering to holders of Exchange Notes. The time by which the holders of Related Notes must tender their Related Notes to be entitled to a consent payment is 12:00 midnight EST, Thursday, January 7, 1999, unless extended. Receipt of the requisite consents to the proposed amendments to the indentures governing the Related Notes is a condition to such payments to holders of Related Notes and to consummation of the tender offers for both the Exchange Notes and the Related Notes.
Donaldson, Lufkin & Jenrette Securities Corporation is acting as the sole dealer manager in connection with the tender offers for the Exchange Notes and the Related Notes. Donaldson, Lufkin & Jenrette Securities Corporation and NationsBanc Montgomery Securities LLC are acting as co-financial advisors in connection with the consent solicitations. The depositary for the tender offers is U.S. Bank Trust National Association. Copies of the Offers to Purchase and Consent Solicitation Statements and additional information concerning the terms of the tender offers may be obtained by contacting Donaldson, Lufkin & Jenrette Securities Corporation at (212) 892-7054.
Certain matters discussed in this statement are "forward looking
statements" intended to qualify for the safe harbors from liability
established by the Private Securities Litigation Reform Act of 1995.
These "forward looking statements" can generally be identified as such
because the context of the statement will include words such as the
Company "believes," "anticipates," "expects," or words of similar
import. Similarly, statements that describe the Company's future
plans, objectives or goals are forward-looking statements. Such
forward-looking statements are subject to certain risks and
uncertainties that could cause actual results to differ materially
from those currently anticipated. Such risks and uncertainties
include, but are not limited to: a total or partial loss of a
satellite due to operational failures, space debris or otherwise;
uncertainty as to the Company's future profitability; the Company's
ability to develop and implement operational and financial systems to
manage rapidly growing operations; an increase in competition from
cable television, Direct Broadcast Satellite ("DBS"), other satellite
system operators, and other providers of subscription television
services; the introduction of new technologies and competitors into
the subscription television business; a merger of existing DBS
competitors; the Company's ability to integrate and successfully
operate acquired businesses and the risks associated with such
businesses; the Company's ability to obtain financing on acceptable
terms to finance the Company's growth strategy and for the Company to
operate within the limitations imposed by financing arrangements;
uncertainty as to the future profitability of acquired businesses;
trends in the cable television, broadcast television and satellite
television industries; impediments to the retransmission of local or
distant broadcast network signals; a decrease in sales of digital
equipment and related services to international service providers; a
decrease in Dish Network subscriber growth; an increase in subscriber
acquisition costs; lower than expected demand for the Company's
delivery of local broadcast network signals; changes in relationships
with customers; changes in the regulatory environment, such as the
inability of the Company to retain necessary authorizations from the
Federal Communications Commission ("FCC") or a change in the
regulations governing the subscription television service industry;
the outcome of pending litigation and regulatory inquiries; an
unexpected business interruption due to the failure of third parties
to remediate Year 2000 issues; and the impact of accounting policies
required to be adopted. Other factors that could materially affect
such forward-looking statements can be found in EchoStar's periodic
reports filed with the Securities and Exchange Commission.
Shareholders, potential investors and other readers are urged to
consider these factors carefully in evaluating the forward-looking
statements. The forward-looking statements made herein are only made
as of the date of this statement and EchoStar undertakes no obligation
to publicly update such forward-looking statements to reflect
subsequent events or circumstances.
CONTACT: EchoStar Communications Corp., Littleton Judianne Atencio, Dir. of Communications, 303/723-2010
KEYWORD: COLORADO INDUSTRY KEYWORD: TELECOMMUNICATIONS