Penthouse reaches agreement on General Media restructuring

New York, April 7 - Penthouse International said it has reached an agreement with holders of a majority of General Media, Inc.'s senior secured notes and preferred stock on a restructuring plan for General Media.

Penthouse and its principal stockholder Luis Enrique Fernando Molina will buy 75% of General Media's outstanding class A preferred stock. General Media is 99.5% owned by Penthouse.

The holders of General Media's preferred stock, who also own 89% of the $46 million of outstanding 15% senior secured notes due 2004 issued by General Media, have agreed to withdraw their objection to Penthouse's previously filed restructuring plan for General Media and also to withdraw their competing plan.

The holders, who include Marc Bell, will receive $10.25 million for the preferreds, payable on March 31, 2008 under an 8% increasing rate note from Molina and guaranteed by Penthouse. The note is secured by a pledge of Penthouse's series C convertible preferred stock.

Under the reorganization plan, holders of General Media's 15% senior notes and the company's general unsecured creditors will get payment in full in cash for their allowed claims.

The plan also calls for reinstating the company's class A preferred stock. Penthouse International, Inc., the company's parent, would get 100% of the common stock of reorganized General Media in return for a capital contribution of $38 to $50 million.

Post Advisory Group has agreed to provide $30 million in exit financing.

General Media filed for Chapter 11 on Aug. 12, 2003 in the U.S. Bankruptcy Court for the Southern District of New York.

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