Technology: Stock Drops to 4 Cents on
Release of Debt Plan
Anacomp, the Poway-based document management services company, proposed a two-pronged debt restructuring plan it hopes will keep it out of bankruptcy.
The embattled firm, which defaulted on a bond payment in October, has come to an agreement with the majority of the bondholders for a bonds-to-equity exchange that would result in bondholders owning all of the company except for 0.1 percent.
The company also proposed a reverse stock split based on the ratio of 3,610.8 shares to one.
The exchange offer requires agreement by the holders of 98 percent of the bonds, while the reverse split needs approval by a majority of the shareholders. If those contingencies are not met, the company said it will enter a prepackaged Chapter 11 bankruptcy to achieve a restructuring. Anacomp emerged from an earlier Chapter 11 bankruptcy in 1996.
CEO Phil Smoot said the company is optimistic the bonds-for-stock exchange will occur since it has an agreement with the holders of about 51 percent of the bonds to participate in the exchange and refrain from selling them.
The company should obtain approvals from bondholders and shareholders by June 11, when it holds its annual meeting, said spokeswoman Kimberly Kasitz.
Should the company fail to obtain the necessary approvals, it would undergo a prepackaged bankruptcy that would take between 45 and 60 days to complete, as compared with a full bankruptcy that takes about 18 months, Kasitz said.
Anacomp, which was delisted from Nasdaq earlier this year, saw its thinly traded stock drop by nearly half on May 8, the day the restructuring plan was released, to 4 cents.
Anacomp, which has been in a retrenching mode for more than a year, has about $312 million in outstanding debt, plus $57.2 million in borrowings from a revolving credit line.
The firm said it is still in negotiations to sell its docHarbor subsidiary to a major corporate entity it hasn’t identified, but had no news regarding the transaction which had originally been estimated to close in March.
Anacomp also said it intends to sell its document management business in Europe called Document Solutions International, and has entered into discussions with several interested parties.
Anacomp, with three subsidiaries, has some 2,200 employees worldwide, including about 400 at its Poway headquarters.
The company lost $7.6 million on $82.1 million in revenues for its first quarter. For fiscal 2000 ended Sept. 30, Anacomp reported a net loss of $111.4 million on revenues of $383.2 million compared with a net loss of $67.9 million on revenues of $442.2 million in the previous fiscal year.
