Earle M. Jorgenson companies reach agreement for holding company restructuring

By Jeff Pines

Washington, Jan. 14 - The Earle M. Jorgenson Co. said it has reached an agreement with its parent holding company Earle M. Jorgenson Holding Co. Inc. and its parent's principal noteholders for a financial restructuring which will convert the holding company's notes to stock.

The restructuring is being done under a reorganization plan among Lynwood, Calif.-based Earle M. Jorgenson Co., its parent, EMJ Metals LLC, a newly formed subsidiary, and Kelso Investment Associates IV, LP.

All of the holding company's debt and equity securities will be converted into Earle M. Jorgenson Co. common stock. Kelso owns debt securities from the holding company and is its controlling shareholder.

Under the agreement:

* All $222.2 million of the holding company's series A variable-rate notes will be exchanged for 40.69 million Earle M. Jorgenson Co. common shares;

* Each series B preferred share will convert into 188.271 Earle M. Jorgenson Co. common shares;

* Each series A preferred share will convert into 124.84 Earle M. Jorgenson Co. common shares;

* The holding company's common stock will convert on a one-for-one basis into Earle M. Jorgenson Co. common stock.

In addition, more than 2.9 million Earle M. Jorgenson Co. shares will be issued for the holding company's warrants to purchase common stock.

Following the merger, Earle M. Jorgenson Co. will have more than 68.26 million shares outstanding.

Earle M. Jorgenson Co. distributes metal bars, tubing and various other metal products.

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