Gray Television repurchases $60.7 million preferreds with cash, stock

By Toni Weeks

San Diego, May 9 - Gray Television, Inc. completed the repurchase of about $60.7 million of its series D perpetual preferred stock and paid $14.9 million of accrued dividends, according to a 10-Q filing with the Securities and Exchange Commission.

The company exchanged $50 million of cash from a notes offering and $8.5 million of common stock for the preferreds.

Gray also said that except for the April 29, 2010 dividend payment in connection with a repurchase of a portion of the series D perpetual preferred stock, the company has deferred the cash payment of dividends on the stock since Oct. 1, 2008. When three consecutive cash dividend payments remain unfunded, the dividend rate increases to 17% from 15%. Therefore, the series D preferreds began accruing interest at 17% per year on July 16, 2009 and will continue to do so as long as three consecutive cash dividend payments remain unfunded.

In addition, while any dividend payments on the series D preferreds are in arrears, Gray cannot repurchase, declare or pay cash dividends on any equity securities having liquidation preferences equal to or junior in ranking to the liquidation preferences of the series D preferreds.

Gray Television is an Atlanta-based television broadcast company.

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