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Strategies & Market Trends : Joe Copia's daytrades/investments and thoughts -- Ignore unavailable to you. Want to Upgrade?

To: Joe Copia who wrote (24798)	8/10/2002 7:53:56 PM
From: Joe Copia	Respond to of 25711

PRIM still like it and read this: Message 17862343

To: Joe Copia who wrote (24798)	8/10/2002 10:53:05 PM
From: Joe Copia	Read Replies (2) \| Respond to of 25711

(COMTEX) A: Conseco: It's time to restructure Aug 10, 2002 (The Deal via COMTEX) -- Two years after taking on the granddaddy of turnaround projects, Gary Wendt is crying uncle. The chief executive of Conseco Inc. said Friday, Aug. 9, that the company's effort to remake itself "is no longer the best course" and that he had hired Lazard and Kirkland & Ellis to restructure the Carmel, Ind.-based financial services conglomerate. Despite a string of selloffs intended to raise cash to pay off debt, Conseco said it has exercised a 30-day grace period rather than make a bond interest payment due this month. A "radical change in the company's capital structure," as one rating agency called for last week, is required, Wendt said in a statement. Wendt's concession comes amid a worsening financial scenario for Conseco. The company's shares have fallen more than 90% on the New York Stock Exchange to about $1. Of $6 billion in total company debt, about $1.65 billion is due before the end of 2003. "The problem is the overleveraged capital structure of the parent," Wendt said. "They looked out past '03 and saw what was coming and said, 'You know what? We're not going to make it,'" said Mike Rettinger, an analyst with McDonald Investments. "The only question now is will it happen in or outside of bankruptcy." Lazard, led by restructuring chief Barry Ridings, and Kirkland, led by partner Matt Kleinman, are expected to begin renegotiating loan agreements with Conseco's bank syndicate. The banks are led by Bank of America Corp. It would be the second time banks have revised their agreement with Conseco. In March, Conseco said the first $352 million generated from asset sales will be retained by Conseco, the next $313 million will be paid to banks. The next $250 million will be split between Conseco and the banks. Conseco sold its variable life insurance business for $50 million and sold Manhattan National Life Co. for $48.5 million earlier this year. Lehman Brothers Inc. advised on those sales. Meanwhile, a faltering Conseco means trouble for Thomas H. Lee Partners. The Boston-based private equity shop pumped $500 million into the company in exchange for 2.6 million convertible shares that can be swapped for common stock for $19.25. "Conseco management and the board are working to address these issues and Thomas H. Lee Partners supports these efforts," said Paul Del Colle, a spokesman Lee said. "The firm is clearly interested in a successful outcome.'" Added McDonald's Rettinger, "This only comes as a shock because it's so out of character. Conseco has been in trouble for a long time. Why didn't they wait it out?" by David Weidner URL: thedeal.com