SEARCH CAPITAL GROUP, INC. REACHES AGREEMENT IN
PRINCIPLE TO CONVERT $68 MILLION OF NON-RECOURSE DEBT TO EQUITY
DALLAS, Texas--August 4, 1995--Search
Capital Group, Inc., ("Search") announced today that it and an ad hoc committee
representative of noteholders in all eight of its non-recourse
Securitization Subsidiaries ("Subsidiaries") have reached an
agreement in principle to exchange approximately $68 million of the
Subsidiaries' indebtedness for Search common stock and a new class
of preferred stock. The debt-to-equity exchange proposal was a
Search decision which is supported by the input and recommendations
of the ad hoc committee.
In order to consummate the exchange program, each of the
Subsidiaries (but not Search or its affiliate, AutoCredit) will file
for reorganization under Chapter 11 of the U. S. Bankruptcy Code.
After filing, Search and the Subsidiaries will seek approval from
the Bankruptcy Court to solicit acceptance of the exchange from
noteholders. Upon receipt of the requisite acceptances, Search and
the Subsidiaries will request the Court to confirm the exchange as
expeditiously as legally possible thereby allowing for the transfer
of assets to equity of over $40 million on Search's balance sheet.
As previously announced, Search engaged the investment banking
firm of Alex. Brown & Sons to assist in developing the debt-to-
equity exchange program. Alex. Brown & Sons is a highly
sophisticated and experienced investment firm with years of success
in assisting companies in their restructurings.
George C. Evans, Search's Chairman and Chief Executive Officer
said, "We have made some tough decisions to make improvements to the
situation we inherited. By completing our debt-to-equity exchange
program, we believe we can return Search to profitability and
restore investor confidence. We are pleased with the structure of
the exchange program and believe that it is equitable to noteholders
who, as stockholders, will benefit from Search's future financial
performance and that it is far superior to a liquidation of the
Subsidiaries' assets."
The ad hoc committee chairman, Mr. Doug Powell stated, "I have
reviewed the proposed debt-to-equity exchange with interest and
intensity. I feel it is fair and reasonable to both the noteholders
and shareholders. Given the condition of Search and its
Subsidiaries only seven months ago, this exchange upon being duly
executed, provides a vehicle whereby the noteholders have the
opportunity to recover their original investment plus upside
potential."
If a plan of reorganization is confirmed as filed, the
noteholders' convertible preferred shares (assuming ultimate
conversion to common stock) and common shares will represent
approximately 70% of Search's total common stock. Under terms of
the exchange, noteholders will receive preferred stock valued at
approximately $45 million and common stock valued at approximately
$9 million.
Search will also increase its Board of Directors from five to
seven with one of the new directors being recommended by the ad hoc
committee. The person recommended by the ad hoc Committee and
approved by Search's Board of Directors is Mr. Doug Powell, Chairman
of The Dominion Companies, an investment company based in Dallas.
"Simultaneously with our ongoing operational improvements and
our debt to equity exchange program, Search has executed a letter of
intent with a major lender for a $100 million line of credit subject
to our plan being confirmed and due diligence by the lender. Also,
our senior management team is negotiating to acquire another sub-
prime automobile finance company. Immediately following
confirmation of our plan, Search will effect these transactions and
`jump start' our business plan," said Mr. Evans.
Mr. Evans projected that upon completion of the debt-to-equity
exchange, Search will have equity in the range of $40-45 million, no
debt, and a $100 million line of credit available to more than
double its current size. With over $40 million in equity, Search
will qualify to be relisted with NASDAQ and will issue tradable
securities to its noteholders. Evans stated, "This new structure
takes a company that was very sick when the new management team came
on board in January 1995 and allows it to become a premier player in
the sub- prime auto finance market and a prospectively strong
company in the financial services arena."
He emphasized that by leveraging the new equity base, additional
financing, and ability to purchase higher quality automobile loans,
Search will be in a position to dramatically improve earnings and
increase shareholder value thus permitting the noteholders, as
stockholders, to receive returns on their stock similar to earnings
levels that other sub-prime finance company stocks are experiencing.
Search Capital Group, Inc. is a specialized financial services
company engaging in the purchase, management and securitization of
used motor vehicle receivables. To fund contract receivable
purchasing, Search created wholly-owned single purpose entities,
referred to as non-recourse Securitization Subsidiaries. As of
August 1995 there are eight active non-recourse Securitization
Subsidiaries which have issued approximately $68 million in notes.
Neither Search nor any affiliate has guaranteed repayment of the
non- recourse Securitization Subsidiaries' notes. Search's common
stock, which had been traded until March 1995 on NASDAQ under the
symbol "SRCG", was delisted due to late filings with the SEC (which
are now current) and net tangible assets on a consolidated basis
that did not meet NASDAQ criteria. Search shares are being traded
by several market makers, who trade the shares independently, and
Search shares are listed on the OTC Bulletin Board.
CONTACT: George C. Evans
Chairman, President & CEO
Search Capital Group, Inc.
(214) 965-6000
TWA prepackaged reorganization plan confirmed by court; effective date
anticipated in mid-August
ST. LOUIS, Mo.,--Aug. 4, 1995--Trans World
Airlines Inc. (ASE:TWA) announced today that the U.S. Bankruptcy Court in St.
Louis has confirmed its prepackaged reorganization plan and has
targeted mid-August for the plan to become effective.
The company said that, when implemented, the plan will decrease
TWA's outstanding debt by approximately $500 million and
significantly reduce the company's interest expense. TWA filed its
prepackaged plan of reorganization under Chapter 11 of the U.S.
Bankruptcy Code on June 30, 1995.
The company said the reorganization plan received strong support
from its creditors, labor leadership and employee-owners.
"The confirmation of TWA's plan of reorganization effectively
concludes our prepackaged bankruptcy proceeding and clears the way
for the implementation of our financial restructuring later this
month," said Jeffrey H. Erickson, president and chief executive
officer of TWA. "We are very pleased that the reorganization has
proceeded quickly and according to plan -- thanks in large part to
the support of our creditors and employee-shareholders."
Erickson added, "TWA is making a strong comeback -- with a
significantly improved balance sheet and dramatically enhanced
ability to compete profitably for the value-conscious business
traveler and price-conscious leisure traveler."
St. Louis-based Trans World Airlines Inc. is a major domestic
and international airline that flies to 73 destinations in the
United States and Caribbean and provides service to 12 destinations
in Europe and the Middle East. The airline operates hubs in St.
Louis and New York's John F. Kennedy Airport.
CONTACT: Trans World Airlines, New York
Robert Mead, 212/484-6701