Timco Aviation receives tenders of 98% of senior PIK notes, 30% of junior PIK notes

New York, Oct. 10 - Timco Aviation Services, Inc. said holders of 98% of its 8% senior subordinated convertible PIK notes due 2006 and 30% of its 8% junior subordinated convertible PIK notes due 2007 tendered their securities in its early conversion offer.

At closing, expected Wednesday, Timco will issue 161.6 million shares including 21.1 million premium shares in exchange for the senior notes and 0.9 million shares including 0.1 million premium shares for the junior notes.

Timco also will issue 60.6 million shares to LJH Ltd., an entity controlled by the company's principal stockholder, under the partial exercise of a warrant.

After the offer is completed, Timco will have 479.5 million shares outstanding. Its principal stockholder, Lacy Harber, will own 43% of the common stock.

A total $2 million of the senior notes and junior notes will remain outstanding and will convert into stock at their maturity.

The offer expired at 5 p.m. ET on Oct. 6.

Completion of the exchange follows improved terms announced Sept. 20.

Under the revised offer, holders received a premium of 15% payable in stock for converting early.

Previously Timco was offering the number of shares investors would have received at maturity and the opportunity to participate in the company's already announced rights offering.

At the revision, Timco also extended the deadline for the exchange and accompanying consent solicitation from 5 p.m. ET on Sept. 20.

The company said that holders of 90% of the notes, including 91% of the senior notes and 18% of the junior notes, had agreed to participate under the improved terms.

Specifically under the revised offer, Timco exchanged the senior notes for the 2,080 shares that would be issued on automatic conversion at maturity plus a premium of 312 shares and the junior notes for 2,056 shares plus a premium of 294 shares.

The Greensboro, N.C., company announced the exchange Aug. 17 and said it also was soliciting consents for proposed amendments to remove all material covenants from the indenture governing the senior notes.

As first announced, in the rights offering, which will immediately follow the completion of the conversion offer, stockholders will receive the right to purchase additional shares of Timco's post-reverse split common stock. A post-reverse split share is made up of 40 pre-reverse split shares.

Stockholders will obtain 1.25 rights for each post-reverse split share of Timco stock. Each right allows investors to purchase the post-reverse split stock at $4.80 per share, or $0.12 per pre-reverse split share.

Timco provides aviation maintenance, repair and overhaul services.

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