Shop At Home Announces $4.5 Million Cash Redemption of Preferred Stock, Preferred Shareholders Extend Standstill Period to March 31, 2001
NASHVILLE, Tenn.--(BUSINESS WIRE)--Dec. 27, 2000--Shop At Home, Inc. (Nasdaq:SATH), an electronic commerce leader in both the broadcast and Internet channels, announced today that it is redeeming 416 shares of its Series B Preferred Stock for $4.5 million in cash. The redemption consideration was determined in accordance with the provisions of the Company's Charter, and includes accrued dividends and will be paid on December 29, 2000. The Company originally issued 2,000 shares of the Series B Preferred (with a total stated value of $20,000,000) on June 30, 2000. The Series B stockholders have previously converted 871 shares and have been mandated by the Company to convert up to another 129 shares by December 31, 2000. When the cash redemption and mandated conversions are completed at year-end, there will be 584 shares of Series B Preferred Stock outstanding with a stated value of $5,840,000 (assuming that the terms of the Company's Charter permit the Series B stockholders to convert all 129 shares by December 31, 2000 as mandated by the Company).
Shop At Home's President and CEO, Kent Lillie, said: "This redemption and agreement with our Preferred stockholders reduces the overhang on our common stock to a modest level. As of December 31, 2000, our Preferred shareholders will have converted 1,000 shares and the Company will have repurchased 416 of the original 2,000 shares, or a total of $14,160,000 of the original $20,000,000. It is expected that the remainder $5,840,000 plus accrued interest will be converted or redeemed in an orderly fashion by March 31, 2001. We appreciate the cooperation of the Series B investors in extending the standstill period which will allow us to better maximize value for all our shareholders, Common as well as Preferred."
Houston Station Sale
The Company announced on November 13, 2000 an agreement to sell its Houston television station, KZJL, Channel 61, for $57 million in cash at closing and certain rights to its 700 MHz spectrum to Liberman Broadcasting Company. It is expected that the Federal Communications Commission will approve the transfer of the license within the next several weeks, and that the sale and transfer will be completed by the end of February.
Additional Details Regarding the Preferred Shareholder Rights
The Company also announced that the Series B holders have agreed to extend until March 31, 2001, the current restrictions on converting the Series B Preferred Stock and shorting common stock which otherwise would have expired on December 31, 2000. In general, these restrictions prohibit the holders of Series B Preferred Stock from converting their shares to common stock and from shorting common stock in excess of the number of shares underlying the warrants they hold. The Company agreed to use the net cash proceeds of any equity offering completed before March 31, 2001 to redeem additional shares of Series B Preferred Stock. No such equity offering is currently contemplated. Also with regard to the warrants, the holders of the Series B Preferred Stock agreed to waive the provision of the warrant, which would have increased the number of shares issuable upon exercise of the warrants if the Company were to issue additional shares of common stock at a price below the warrant exercise price. Therefore, the number of shares of common stock underlying the warrant is a fixed number. |
