Metrocall agrees restructuring, to file for Chapter 11

New York, May 23 - Metrocall, Inc. said it executed agreements with the senior secured lenders on its $133 million credit facility and with holders of more than two-thirds of its $627 million in outstanding bonds for a restructuring.

The agreement will be carried out through a prepackaged Chapter 11 filing.

Under terms of the plan, Metrocall's $133 million of senior secured debt will be exchanged for a $60 million secured term note to be issued by the reorganized operating company, $20 million of pay-in-kind notes to be issued by the reorganized holding company, preferred stock to be issued from the reorganized holding company with a $53 million liquidation preference and 42% of the new common stock of the reorganized holding company.

General unsecured creditors, including the holders of its unsecured public notes, will receive preferred stock of the reorganized holding company with a $5 million liquidation preference and 58% of the new common stock to be issued.

Both amounts of common stock are subject to dilution of up to 7% for options provided to employees under a new stock option plan.

Until the preferred stock is redeemed it will hold 95% of the total voting rights.

General unsecured creditors of Metrocall's wholly owned subsidiaries will be paid principal owing in full.

The plan includes a corporate restructuring of the Alexandria, Va. wireless data and messaging company. Included is establishment of a primary holding company, the consolidation of Metrocall's four existing and wholly-owned operating subsidiaries into single operating entity, and the transfer of Metrocall's intellectual property and FCC licenses into a single wholly-owned license subsidiary.

Metrocall said it expects to file for Chapter 11 in early June and achieve confirmation by Oct. 31, 2002.

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