Ampex Corporation Agrees to Redeem Preferred Stock in Exchange for New Securities
REDWOOD CITY, Calif.--(BUSINESS WIRE)--July 6, 1998--Ampex Corporation (AMEX:AXC) today announced that it has agreed to exchange a package of new securities to redeem all of its approximately $70.0 million of 8% Noncumulative Redeemable Preferred Stock. The new securities consist of 3.0 million Class A Common Shares, $20.0 million at face value of Convertible Preferred Stock and $43.7 million at face value of New Redeemable Preferred Stock.
The Class A Common Shares being issued represent 5.5% of the diluted total shares outstanding. The Convertible Preferred Stock may be converted at the option of the holders into up to 5.0 million Class A Common Shares representing an additional 9.2% of the diluted total. The Convertible Preferred Stock is not redeemable prior to June 30, 2001, and, thereafter, is redeemable in equal quarterly installments through March 31, 2008. The new Redeemable Preferred Stock is redeemable in quarterly installments commencing June 30, 1999 and ending December 31, 2008. Both issues of Preferred Stock are entitled to dividends at an annual rate of 8% if declared by Ampex's board of directors. Dividends that are not declared do not accumulate. Mandatory or optional redemption payments may, at the option of the Company, be made in cash or in common stock at the then prevailing market price.
The Company indicated that the transaction is expected to improve its liquidity and to materially improve its ability to make future acquisitions.
The Company will include shares issuable upon conversion of the Convertible Preferred Stock in its diluted earnings per share computation in future periods. Accordingly, the issuance of the new securities will dilute reported earnings by approximately 14.7%.
Ampex Corporation, headquartered in Redwood City, California, is one of the world's leading providers of technologies for the acquisition, storage and processing of visual information. Today, Ampex is delivering digital image solutions for large-scale corporate, government, network, entertainment and telecommunications applications. During its more than 50-year history of innovation, Ampex has been granted thousands of patents and numerous awards for technical achievement. Ampex customers include such leading organizations as AT&T, Boeing, CNN, Mobil Oil, HBO, Time Warner and NASA.
Any statements contained herein that are not historical facts are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995, and involve risks and uncertainties. Information on potential factors which could affect the Company's actual results of operations are included in its filings with the Securities and Exchange Commission, including but not limited to its Annual Report on Form 10-K for the fiscal year ended December 31, 1997, its Quarterly Report on Form 10-Q for the fiscal quarter ended March 31, 1998, and its Quarterly Report on Form 10-Q for the fiscal quarter ended June 30, 1998, which is expected to be filed shortly.
CONTACT:
Ampex Corporation
Karen D. Schweikher, 650/367-4111
KEYWORD: CALIFORNIA
BW0076 JUL 06,1998
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