Krystal concludes tender for 10¼% notes

New York, June 9 - The Krystal Co. (B3/B) said it concluded its cash tender offer for its outstanding 10¼% senior notes due 2007 and the related consent solicitation, which expired at midnight ET on June 7, without extension.

As of that deadline, holders had tendered $48.38 million principal amount of the notes, or about 79.3% of the $60.98 million remaining outstanding amount - unchanged from the participation level announced on May 21, following the expiration of the consent deadline.

The company said that it has accepted and paid for all notes tendered under the terms of the offer, and said that the proposed amendments to the notes' indenture became effective and are binding on all notes that remain outstanding.

As previously announced, Krystal, a Chattanooga, Tenn.-based restaurant chain operator that had issued $100 million of the notes in September 1997, said on May 11 that it had begun a cash tender offer for any and all $60.98 million remaining principal amount of its outstanding 10¼% notes and had also begun soliciting noteholder consents to proposed indenture changes.

The company set a consent deadline of 5 p.m. ET on May 21 and said the tender offer would expire at midnight ET on June 7, with both deadlines subject to possible extension.

Krystal said it would pay total consideration of $1,017.08 per $1,000 principal amount of notes tendered for notes tendered by the consent deadline, including a consent payment of $17.08.

Holders tendering their notes after the consent deadline but before the offer expiration would receive the purchase price of $1,000 per $1,000 principal amount of notes but no consent payment (this was subsequently raised to the total consideration figure of $1,017.08 per $1,000 principal amount).

The company said all tendering noteholders would additionally receive accrued and unpaid interest up to but not including the date of payment for the notes.

Krystal said holders tendering their notes would be required to consent to the proposed amendments to eliminate substantially all of the restrictive covenants contained in the indenture. Holders could not tender their notes without also delivering consents or vice versa.

The company said adoption of the amendments would require the consent of holders of at least a majority of the outstanding principal amount of the notes. It said the offer would be conditioned upon the company's receipt of tenders from holders of notes representing a majority of the outstanding principal amount of the notes, consummation of anticipated financing, and other customary conditions.

Krystal also said that it had called for redemption of $10 million principal amount of the outstanding notes; the redemption - which will be used to take out any notes not tendered under the tender offer - will take place on June 14, subject to possible extension, at a price of 101.708%.

Information regarding the call has been posted with the Depositary Trust Co.

On May 21, Krystal said it had received the necessary consents to amend the 10¼% notes' indenture. By the consent deadline - which expired as scheduled at 5 p.m. ET on May 21, without extension - the company had received consents from the holders of $48.38 million of the notes or 79.3%.

Banc of America Securities LLC was dealer manager and solicitation agent in connection with the offer (contact the High Yield Special Products department collect at 704 388-9217 or at 888 292-0070). Global Bondholder Services was the information agent and depositary (call collect at 212 430-3774 or at 866 470-3700).

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