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FILED BY METROCALL, INC.
PURSUANT TO RULE 425 UNDER THE SECURITIES ACT OF 1933
SUBJECT COMPANY: METROCALL, INC.
COMMISSION FILE NO: 000-21924
NEWS RELEASE
FOR IMMEDIATE RELEASE:
Tuesday, September 19, 2000
Metrocall Media Contact: Metrocall Analyst Contact:
Michael T. Scanlon, Jr. Paul J. Liberty
Senior Vice President Vice President
Marketing & Communications Investor Relations
(703) 660-6677x6500 (703) 660-6677x6260
[email protected] [email protected]
METROCALL SUBMITS FULLY FUNDED PROPOSED TERMS FOR ACQUISITION OF PAGENET
STRATEGIC PARTNERS STRENGTHEN METROCALL'S PLAN WITH $337.5M IN BINDING
FINANCIAL COMMITMENTS
ALEXANDRIA, VA., September 19, 2000 - Metrocall Inc. (Nasdaq: MCLL),
announced today that it has received a total of $337.5 million of binding
financial commitments in connection with its request to the Bankruptcy Court for
permission to submit a competing plan proposal to acquire Paging Network, Inc.
The total figure of $337.5 million includes $105 million in new common equity,
$57.5 million in new senior unsecured notes with warrants, and $175 million in
connection with the sale of certain SMR licenses to Nextel Communications, Inc.
(Nasdaq:NXTL). In addition, Metrocall has obtained commitments from certain
members of its existing senior secured bank group and others to refinance
Metrocall's existing bank facility as part of a new credit facility that
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would consolidate Metrocall's and PageNet's bank facilities and provide
liquidity for the combined entity.
Nextel Communications, Inc., a leader in digital wireless
communications, will become a major new equity investor in Metrocall as part of
the plan. Current Metrocall investors, Aether Systems, Inc. (Nasdaq: AETH), a
leading applications service provider (ASP), and PSINet Inc. (Nasdaq:PSIX), the
global Internet supercarrier, have committed to increase their existing equity
positions in Metrocall. SunAmerica, John Hancock, Canyon Partners and others
will purchase the new senior unsecured notes. The financing commitments are
contingent on confirmation by the Bankruptcy Court of the Metrocall plan,
execution of definitive documentation, receipt of regulatory approvals and other
customary closing conditions.
Under Metrocall's plan proposal, PageNet's bondholders would receive
$100 million in cash, 106.8 million shares of Metrocall common stock and 81% of
the equity of Vast Solutions, Inc.; PageNet's secured creditors would receive
$75 million in cash and new secured notes as part of a consolidated bank
facility for $671.5 million, together with the proceeds from the disposition of
the capital stock of PageNet's Canadian subsidiary.
The other key elements of Metrocall's plan are as follows:
- Payment in full in cash, including post-petition interest
through the plan's "effective date", of allowed general
unsecured claims against the debtor operating subsidiaries
of PageNet;
- Consolidation on the plan's "effective date" of the
reorganized PageNet U.S. operating subsidiaries into
reorganized PageNet, followed by the parent-to-parent
merger of reorganized PageNet with and into Metrocall;
- Funding by Metrocall of a working capital facility for
Vast Solutions, Inc; and
- Creation for the benefit of PageNet's shareholders and
PageNet's banks of a Liquidating Trust that shall have, on
the plan's "effective date," assets consisting of equity
interests in all of PageNet's non-U.S. subsidiaries or
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non-U.S. affiliates, including any and all proceeds
arising from or generated by the post-effective date sale
of such assets by a trustee to be appointed by Metrocall.
"Our proposal brings together a Who's Who of the telecommunications
industry and offers superior value to PageNet's stakeholders," said William L.
Collins, III, Chairman, President and CEO of Metrocall. "In addition to the
significant amount of cash that we have raised from Metrocall's strategic and
financial partners and which will be made available to the PageNet creditors, we
believe that we are better positioned to realize substantial operating synergies
and to maximize shareholder value from a combined company. We urge the
creditors' and their representatives and advisors to support this formidable
financial and operating plan," Collins added.
Metrocall's motion also contends that PageNet's plan is unconfirmable
as a matter of bankruptcy law and that any attempt by PageNet to correct such
legal infirmities will likely cause significant delay. The material confirmation
infirmities include, among others:
- PageNet's recent plan amendments requiring post-effective
date asset sales violate the Federal Communications Act
and Section 1129(a)(3) of the Bankruptcy Code.
- PageNet's Amended Plan violates Section 1129(a)(1) of the
Bankruptcy Code because it (a) improperly classifies
general unsecured creditors, (b) improperly effects a
substantive consolidation, (c) improperly designates and
treats certain general unsecured creditors and (d)
improperly grants PageNet insiders and others a release.
- PageNet's Amended Plan is not feasible under Section
1129(a)(11) of the Bankruptcy Code because (i) one-year
pro forma financial projections are insufficient to
demonstrate financial stability of reorganized
Arch/PageNet given, among other things, the lack of
assurance that the $110 million required prepayment to
the Arch banks can be made and (ii) separate pro forma
projections are not provided for each debtor.
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- PageNet's Amended Plan does not comply with the "Best
Interest of Creditors Test" of Section 1129(a)(7) of the
Bankruptcy Code because it fails to provide PageNet's
creditors and shareholders with a separate liquidation
analysis for each debtor.
Metrocall, Inc., headquartered in Alexandria, Virginia, is one of the
largest wireless data and messaging companies in the United States providing
both products and services to more than six million business and individual
subscribers. The Company offers two-way interactive messaging, wireless e-mail
and Internet connectivity, cellular and digital PCS phones, as well as one-way
messaging services. Metrocall owns and operates on many nationwide, regional and
local networks, including a new Two-Way Interactive Network (TWIN), and can
supply a wide variety of customizable Internet-based information content
services. Also, Metrocall offers totally integrated resource management systems
and communications solutions for business and campus environments. Metrocall's
wireless networks operate in the top 1,000 markets all across the nation and the
Company has offices and retail locations in more than forty states. Metrocall is
the largest equity-owner of Inciscent, an independent business-to-business
enterprise, that is a national full-service "wired-to-wireless" Application
Service Provider (ASP). For more information on Metrocall please visit our Web
site and On-line store at WWW.METROCALL.COM or AOL Keyword: Metrocall.
SAFE HARBOR STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM
ACT OF 1995
The statements set forth above that are not historical facts, such as
those concerning Metrocall's proposal to acquire PageNet, are forward-looking
statements that are subject to risks and uncertainties. A number of risks and
uncertainties could cause actual results, events or developments to differ from
expectations. Among the factors that could cause actual results to differ are 1)
Metrocall's ability to consummate the proposed debt and equity financing and
satisfy the conditions thereto; 2) changes in trading prices of Metrocall
securities; 3) changes in the terms of or other factors relating to competing
proposals for PageNet; 4) the response of the PageNet Board and the PageNet
creditors, and 5) actions of the bankruptcy court. You should refer to our
Annual Report on Form 10-K for a complete discussion of factors that could cause
Metrocall's actual results to differ materially from those projected in
forward-looking statements. The Company wishes to caution readers not to place
undue reliance on any such forward-
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looking statements, which statements are made pursuant to the Private Securities
Litigation Reform Act of 1995 and, as such, speak only as of the date made.
ANY SECURITIES TO BE ISSUED PURSUANT TO THE METROCALL PROPOSAL WILL
BE ISSUED PURSUANT TO APPLICABLE PROVISIONS OF THE SECURITIES ACT OF 1933 OR AN
EXEMPTION THEREFROM. INVESTORS ARE URGED TO READ THE RELEVANT DOCUMENTS TO BE
FILED WITH THE SECURITIES & EXCHANGE COMMISSION AND/OR THE BANKRUPTCY COURT
WHICH WILL CONTAIN IMPORTANT INFORMATION ABOUT ANY TRANSACTION INVOLVING
METROCALL. INVESTORS CAN OBTAIN ANY DOCUMENT FILED WITH THE COMMISSION FOR FREE
AT THE COMMISSION'S WEB SITE, HTTP://www.SEC.GOV.
