Dobson plans to exchange cash, stock for 12¼%, 13% preferreds

New York, Jan. 20 - Dobson Communications Corp. said it is planning to offer cash and common stock in exchange for its 12¼% senior exchangeable preferred stock and 13% senior exchangeable preferred stock.

The Oklahoma City-based wireless phone company said the offer is intended to reduce its long-term obligations, simplify its capital structure and improve the liquidity of its class A common stock.

Holders of the preferreds will be able to choose either $530.00 in cash or stock with the value of $530.00 based on the volume weighted average price for the five trading days ending on the second trading day before the expiration date of the exchange offer. The stock is subject to a minimum of 265 shares and a maximum of 353 shares. The preferreds have a liquidation preference of $1,000.

Dobson has set limits on how much cash and stock it will issue.

For the 12¼% preferreds, the company will pay a maximum of $12.2 million in cash plus any cash not subscribed in the exchange for the 13% preferreds and a maximum of 8.2 million shares plus any shares not subscribed in the exchange for the 13% preferreds.

For the 13% preferreds, Dobson will pay a maximum of $51.1 million plus any cash not subscribed in the exchange for the 12¼% preferreds and a maximum of 34.1 million shares plus any shares not subscribed in the exchange for the 12¼% preferreds.

Oversubscriptions will be pro rated.

Dobson is also soliciting consents from the holders of each series of preferreds to amend the certificate of designation to eliminate all voting rights, other than voting rights required by law, and substantially all of the restrictive covenants and waive compliance with the provisions to be eliminated until the proposed amendments become effective or until 18 months from the expiration date of the exchange offer.

Dobson needs consents from holders of a majority of the outstanding shares of each series of preferred stock for the changes to become effective.

Dobson will pay a cash consent fee of $10.00 for each share of preferred stock tendered.

Tenders will be deemed to include consents and delivery of consents will be considered as tenders.

Dobson will not pay accrued dividends on tendered preferreds.

Dobson currently has $45.22 million of the 12¼% preferreds and $191.364 million of the 13% preferreds outstanding.

Houlihan Lokey Howard & Zukin Capital, Inc. is dealer manager and solicitation agent for the offer.

Dobson said it has filed a registration statement for the exchange with the Securities and Exchange Commission but it has not yet become effective.

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