DCEL This doesn't smell good. It has $3 written all over it.
Dobson Commun Hldr Pledges Stk As Collateral For Loan
WASHINGTON -- Dobson Communications Corp.'s (DCEL) largest shareholder borrowed $290 million from Bank of America and pledged 53.6 million shares of the company's Class B common stock as collateral for the loan.
Dobson's largest shareholder is a limited partnership controlled by Everett Dobson, chairman and chief executive, and Stephen Dobson, a director, according to a filing Friday with the Securities and Exchange Commission.
The 53.6 million Class B shares pledged as collateral for the loan represent 48% of Dobson Communication's economic interest and 73% of the company's voting interest, the filing said.
The loan matures on April 30, 2002, unless extended.
Dobson Communications said that a change of control could occur if a default occurs under the loan agreement. A default could result in defaults on other obligations, the filing said.
The company also said in the filing that the shareholder converted 1,923,077 million Class B shares into an equal number of Class A shares and sold them in a private transaction to an unidentified investor. Some of the proceeds were used to fund an interest reserve required under the loan agreement, the filing said.
Under certain circumstances, the investor has the option to buy an additional 2 million Class A shares from the shareholder, which has the right to repurchase all the Class A shares from the investor at any time.
In a separate SEC filing Friday, Lehman Brothers Holdings Inc. (LEH) reported owning a 5.86% stake in Dobson Communications, or 1,923,077 Class A common shares.
On Thursday, the cell-phone services provider said it hired financial advisers Banc of America and Lehman Brothers to also look at possible restructuring opportunities, acquisitions or strategic alliances.
Dobson Communications said it will be evaluating strategic alternatives, including the potential merger or sale of the company.
Dobson said Thursday it has never been stronger financially and expects to have positive cash flow in 2002. For the six months ended June 30, the company lost $76 million, or $1.24 a share, including items, on revenue of $321.2 million.
-Robert L. Grant; Corporate Filings Alert; 202-393-7851; robert.grant@dowjones.com |
