SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
____________________
FORM 8-K/A
(Amendment No. 1)
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
April 9, 1998
(Date of earliest event reported)
AMERICAN TELECASTING, INC.
(Exact name of Registrant as specified in its charter)
Delaware 0-23008 541486988
(State of (Commission File No.) (IRS Employer
Incorporation) Identification No.)
5575 Tech Center Drive
Suite 300
Colorado Springs, Colorado
(Address of principal executive offices)
80919
(zip code)
(719) 260-5533
(Registrant's telephone number, including area code)
INTRODUCTION
This Amendment No. 1 to Form 8-K Current Report ("Form 8-K") is
being filed on behalf of American Telecasting, Inc. (the "Company") to
amend the Form 8-K filed originally by the Company on April 9, 1998, which
relates to the Offer to Purchase and Consent Solicitation Statement dated
April 9, 1998 (the "Statement"), as amended and supplemented by the
Supplement thereto, dated April 22, 1998 (the "Supplement"), and the
accompanying Consent and Letter of Transmittal (the "Consent and Letter of
Transmittal") and, together with the Statement, the "Offer") with respect
to the offer by the Company to purchase for cash a portion of its Senior
Discount Notes due 2004 (the "2004 Notes") and a portion of its Senior
Discount Notes due 2005 (the "2005 Notes" and, together with the 2004
Notes, the "Notes") from Holders (as defined in the related Indentures)
thereof, at a cash price in the case of the 2004 Notes equal to $255 per
$1,000 principal amount at maturity of the Notes purchased and in the case
of the 2005 Notes equal to $225 per $1,000 principal amount at maturity of
the Notes purchased.
Item 5. Other Events.
Item 5 is hereby amended and supplemented by the following:
The Company has amended its solicitation of consents made in
conjunction with the Offer (the "Solicitation") to propose amendments to
the indentures (the "Proposed Amendments") governing the Notes that, if
they are approved and become effective, would require the Company to use a
portion of any additional net proceeds received by it under an Asset
Purchase Agreement, dated as of March 18, 1997 (the "BellSouth Agreement"),
by and among certain subsidiaries of the Company, BellSouth Corporation
("BellSouth") and a subsidiary of BellSouth, to offer to repurchase Notes
and permit the Company to retain or use a portion of such net proceeds
without regard to the 270 day reinvestment period provided for in the
indentures. The Solicitation continues to provide for the proposed waivers
set forth in the Statement (the "Proposed Waivers"). The Proposed Waivers
and the Proposed Amendments constitute a unified proposal and accordingly
neither may be approved and become effective independently of the other.
All consents delivered by holders shall apply to both the Proposed Waivers
and the Proposed Amendments. Except as set forth in the Supplement, the
terms and conditions of the Offer, including the Offer consideration and
the maximum of $17.5 million available for the purchase of Notes, remain
unchanged.
The Proposed Amendments would amend the indentures in the case of
any and all net proceeds received by the Company or any of its subsidiaries
from (i) the up to $46.2 million in proceeds that may be received in
connection with other dispositions contemplated by the BellSouth Agreement
that close after the expiration date of the Offer, depending on the total
number of channel leases and licenses ultimately delivered by the Company
to BellSouth, and (ii) the up to approximately $6.4 million in proceeds
that may be received from an escrow account that was established under the
BellSouth Agreement in connection with a disposition completed prior to the
date of this Statement.
No later than 30 days after the aggregate amount of net available
proceeds resulting from future BellSouth dispositions and the escrow
proceeds first equals or is greater than $10 million, the Company shall be
obligated to utilize 57% of the amount of such net available proceeds to
make an offer to purchase the outstanding Notes, which required offer shall
remain open for a minimum of 20 business days, unless extended, at a
purchase price in cash equal to the greater of (i) $280.50 per $1,000
principal amount at maturity in the case of the 2004 Notes and $247.50 per
$1,000 principal amount at maturity in the case of the 2005 Notes and (ii)
the market value of the Notes as determined on the date preceding the date
of the commencement of the required offer by Donaldson, Lufkin & Jenrette
Securities Corporation, the financial advisor to the Company. If the
aggregate principal amount of Notes tendered by holders thereof pursuant to
a required offer exceeds the amount of the 57% of the net available
proceeds to be used for the purchase of the Notes, the Notes shall be
selected for purchase on a pro rata basis. Upon completion of a required
offer, the amount of net available proceeds shall be reset at zero. The 43%
of the amount of such net available proceeds not to be utilized for such
required offer to purchase, as well as the amount of the 57% of the net
available proceeds to be used to purchase Notes pursuant to such required
offer that is in excess of the amount required to purchase the Notes
tendered by holders thereof, shall not be subject to any such tender
obligation and shall be freely available for use by the Company as it deems
appropriate. In addition, any and all financial advisor, legal and other
costs and fees incurred by the Company in connection with completing or
facilitating any future BellSouth dispositions, escrow proceeds or any
required offer as described in this Statement shall be deemed to be reduce
net available proceeds resulting from future BellSouth dispositions and
escrow proceeds that are required to be used to purchase Notes. At such
time that the amount of net available proceeds resulting from additional
future BellSouth dispositions or escrow proceeds equals or is greater than
$5 million (which amount shall not include the unencumbered net available
proceeds), the Company shall be obligated to utilize 57% of the amount of
such additional net available proceeds to make a subsequent required offer,
subject to the same terms and conditions set forth above applicable to the
initial required offer. The proposed amendments would not restrict the
Company from using unencumbered net available proceeds for the purchase or
other retirement of Notes on such terms as it determines to be appropriate.
The proposed amendments would not apply to net proceeds that may
be received from dispositions of assets that the Company may undertake
other than pursuant to the BellSouth agreement. Accordingly, the Company
would not be required to use such net proceeds to make a required offer as
described above to but would continue to obligated to offer to repurchase
Notes at accreted value at the end of the 270 day reinvestment period as
and to the extent currently provided in the applicable provisions of the
indenture.
The Company's obligation to accept for purchase, and to pay for,
Notes tendered pursuant to the offer is not conditioned upon any minimum
tender of either the 2004 Notes or the 2005 Notes or obtaining any
financing but is subject to satisfaction of the receipt of the consents
from the holders of a majority in principal amount at maturity of both the
2004 Notes and the 2005 Notes on or prior to 5:00 PM, New York City time,
on April 28, 1998, unless extended, and to certain other conditions. The
Company, in its sole discretion, may waive any of the conditions of the
Offer, in whole or in part, at any time and from time to time.
The Offer and Solicitation will expire at 12:00 midnight, New
York City time, on May 7, 1998, unless extended. If the consent condition
is not satisfied on or prior to 5:00 PM, New York City time, on April 28,
1998, unless extended, the Company currently intends to terminate the offer
without purchasing any Notes thereunder.
Statement under the Private Securities Litigation Reform Act of
1995: The statements contained in this release regarding the Company's
plans for future development and operation of its business are forward-
looking statements that involve risks and uncertainties. While management
believes that the assumptions underlying these statements are reasonable,
actual results could differ materially. Among the factors that could cause
actual results to differ materially are: a lack of sufficient capital to
finance the Company's business plan on terms satisfactory to the Company;
the Company's inability to develop and implement new services, such as
high-speed Internet access and telephony; the Company's inability to obtain
the necessary FCC authorizations for such new services; competitive
factors, such as the introduction of new technologies and competitors into
the subscription television, high-speed Internet access and telephony
businesses; a failure by the Company to enter into strategic partner
relationships; and the other factors listed on page one of the Company's
Annual Report on Form 10-K. The Company wishes to caution readers not to
place undue reliance on any such forward-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.
The foregoing description of the Supplement is qualified in its
entirety by reference thereto, a copy of which is attached as an exhibit
hereto and is incorporated by reference herein in its entirety.
Item 7. Financial Statements, Pro Forma Financial Information and
Exhibits.
(c) Exhibits
99(a) Supplement to Offer to Purchase and Consent
Solicitation Statement, dated April 22, 1998.
99(b) Press Release, dated April 22, 1998, by
American Telecasting, Inc.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, American Telecasting, Inc. has duly caused this report to be signed
on its behalf by the undersigned hereunto duly authorized.
AMERICAN TELECASTING, INC.
By: /s/ DAVID SENTMAN
____________________________
Name: David Sentman
Title: Senior Vice President and Chief Financial
Officer
Date: April 23, 1998
EXHIBIT INDEX
Exhibit No.
99(a) Supplement to Offer to Purchase and Consent
Solicitation Statement dated April 22, 1998.
99(b) Press Release, dated April 22, 1998, by American
Telecasting, Inc.
SUPPLEMENT TO
OFFER TO PURCHASE AND CONSENT SOLICITATION STATEMENT
AMERICAN TELECASTING, INC.
OFFER TO PURCHASE FOR CASH
A PORTION OF ITS
SENIOR DISCOUNT NOTES DUE 2004
AND
SENIOR DISCOUNT NOTES DUE 2005
AND
SOLICITATION OF CONSENTS FOR
WAIVERS UNDER RELATED INDENTURES
THE OFFER WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY TIME, ON MAY
7, 1998, UNLESS EXTENDED (SUCH DATE, AS THE SAME MAY BE EXTENDED, THE
"EXPIRATION DATE"). TENDERS OF NOTES MAY NOT GENERALLY BE WITHDRAWN.
CONSENTS MAY BE REVOKED AT ANY TIME PRIOR TO THE CONSENT DATE (AS
HEREINAFTER DEFINED). IF THE CONSENT CONDITION (AS HEREINAFTER DEFINED) IS
NOT SATISFIED ON OR PRIOR TO 5:00 PM, NEW YORK CITY TIME, ON APRIL 28,
1998, UNLESS EXTENDED, PURCHASER CURRENTLY INTENDS TO TERMINATE THE OFFER
WITHOUT PURCHASING ANY NOTES THEREUNDER.
This Supplement supplements the Offer to Purchase and Consent
Solicitation Statement dated April 9, 1998 (the "Statement"), and the
accompanying Consent and Letter of Transmittal (the "Consent and Letter of
Transmittal" and, together with the Statement, the "Offer") with respect to
the offer by American Telecasting, Inc., a Delaware corporation
("Purchaser"), to purchase for cash a portion of its Senior Discount Notes
due 2004 (the "2004 Notes") and a portion of its Senior Discount Notes due
2005 (the "2005 Notes" and, together with the 2004 Notes, the "Notes") from
Holders (as defined in the related Indentures) thereof, at a cash price in
the case of the 2004 Notes equal to $255 per $1,000 principal amount at
maturity of the Notes purchased and in the case of the 2005 Notes equal to
$225 per $1,000 principal amount at maturity of the Notes purchased (the
"Offer Consideration"). The terms and conditions of the Offer, including
the Offer Consideration and the maximum of $17.5 million available for the
purchase of Notes, remain unchanged.
As described elsewhere in this Supplement in greater detail,
Purchaser has amended the Solicitation to propose amendments to the Asset
Disposition Covenants that, if they are approved and become effective,
would require Purchaser to use a portion of any additional net proceeds
received by it under the BellSouth Agreement to offer to repurchase Notes
and permit Purchaser to retain or use a portion of such net proceeds
without regard to the 270 day reinvestment period provided for in the Asset
Disposition Covenants. See "Proposed Amendments to the Indentures" in this
Supplement. The Solicitation continues to provide for the Proposed Waivers.
The Proposed Waivers and the Proposed Amendments constitute a unified
proposal and accordingly neither may be approved and become effective
independently of the other.
All capitalized terms used in this Supplement which are not
otherwise defined herein shall have the meanings ascribed to them in the
Statement.
PURCHASER'S OBLIGATION TO ACCEPT FOR PURCHASE, AND TO PAY FOR,
NOTES VALIDLY TENDERED PURSUANT TO THE OFFER IS NOT CONDITIONED UPON ANY
MINIMUM TENDER OF EITHER THE 2004 NOTES OR THE 2005 NOTES OR OBTAINING ANY
FINANCING BUT IS SUBJECT TO SATISFACTION OF THE CONSENT CONDITION ON OR
PRIOR TO 5:00 PM, NEW YORK CITY TIME, ON APRIL 28, 1998, UNLESS EXTENDED,
AND TO CERTAIN OTHER CONDITIONS. PURCHASER, IN ITS SOLE DISCRETION, MAY
WAIVE ANY OF THE CONDITIONS OF THE OFFER, IN WHOLE OR IN PART, AT ANY TIME
AND FROM TIME TO TIME.
The Dealer Manager for the Offer and the Financial Advisor for
the Solicitation is:
------------------------
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
APRIL 22, 1998
PROPOSED AMENDMENTS TO THE INDENTURES.
Purchaser has amended the Solicitation to solicit consents to amend
the Asset Disposition Covenants (the "Proposed Amendments"). The
Solicitation continues to provide for the Proposed Waivers. The Proposed
Waivers and the Proposed Amendments constitute a unified proposal and
accordingly neither may be approved and become effective independently of
the other. All Consents delivered by Holders shall apply to both the
Proposed Waivers and the Proposed Amendments. The Proposed Waivers and the
Proposed Amendments will be embodied in an amendment to the Indenture in
the form set forth in the supplemental indentures (the "Supplemental
Indentures") to be executed immediately upon receipt of the Requisite
Consents (as hereinafter defined). The time and date on which the
Supplemental Indentures are executed is hereinafter referred to as the
"Consent Date." The Supplemental Indentures will become effective upon
execution by Purchaser and the Trustee on the Consent Date. The Proposed
Amendments and the Proposed Waivers, however, will not become operative
unless Notes are accepted for purchase by Purchaser pursuant to the Offer
on or prior to June 8, 1998. Thereafter, the Proposed Amendments and the
Proposed Waivers will be binding on each Holder of the Notes remaining
outstanding, whether or not such Holder tendered Notes pursuant to the
Offer. The Indentures, without giving effect to the Proposed Amendments and
the Proposed Waivers, will remain in effect until the Proposed Amendments
and the Proposed Waivers become operative. If the Offer is terminated or
withdrawn, or the Notes are never accepted for purchase, the Supplemental
Indentures will never become operative.
Pursuant to the terms of the Indentures, the Proposed Amendments
and the Proposed Waivers require the written consent of the Holders of at
least a majority in principal amount at maturity of the 2004 Notes
outstanding and at least a majority in principal amount at maturity of the
2005 Notes outstanding (together, the "Requisite Consents").
The summaries of provisions of the Indentures set forth below are
qualified in their entirety by reference to the full and complete terms
contained in the Indentures. Capitalized terms used herein without
definition have the same meanings as set forth in the respective
Indentures. Holders may obtain copies of the Indentures and the proposed
forms of Supplemental Indentures without charge from the Dealer Manager.
Copies of the Indentures have also been filed by Purchaser with the SEC and
may be obtained from the SEC as described in the Statement in "Available
Information".
The Asset Disposition Covenants are provisions contained in
Section 1016 of each of the Indentures that require that Net Available
Proceeds from asset sales by Purchaser or its subsidiaries that are not
used by Purchaser or its subsidiaries within 270 days following receipt to
acquire new assets or to retire indebtedness be used to make a pro rata
offer to purchase outstanding 2004 Notes and 2005 Notes at a purchase price
equal to 100% of the Accreted Value thereof to any purchase date prior to
maturity; provided, that, if the remaining Net Available Proceeds is less
than $5.0 million, such offer to purchase may be deferred until Net
Available Proceeds shall exceed $5.0 million.
The Proposed Amendments would amend the "Asset Disposition
Covenants" described above in the case of any and all net proceeds received
by Purchaser or any of its subsidiaries from (i) the up to $46.2 million in
proceeds that may be received in connection with other dispositions
contemplated by the BellSouth Agreement that close after the Expiration
Date ("Future BellSouth Dispositions"), depending on the total number of
channel leases and licenses ultimately delivered by Purchaser to BellSouth,
and (ii) the up to approximately $6.4 million in proceeds that may be
received from an escrow account that was established under the BellSouth
Agreement in connection with a disposition completed prior to the date of
this Statement (the "Escrow Proceeds").
No later than 30 days after the aggregate amount of Net Available
Proceeds resulting from Future BellSouth Dispositions and the Escrow
Proceeds first equals or is greater than $10 million, Purchaser shall be
obligated to utilize 57% of the amount of such Net Available Proceeds to
make an offer to purchase the outstanding Notes (a "Required Offer"), which
Required Offer shall remain open for a minimum of 20 business days, unless
extended, at a purchase price in cash equal to the greater of (i) $280.50
per $1,000 principal amount at maturity in the case of the 2004 Notes and
$247.50 per $1,000 principal amount at maturity in the case of the 2005
Notes and (ii) the market value of the Notes as determined on the date
preceding the date of the commencement of the Required Offer by Donaldson,
Lufkin & Jenrette Securities Corporation ("DLJ"), the financial advisor to
Purchaser. If the aggregate principal amount of Notes tendered by Holders
thereof pursuant to a Required Offer exceeds the amount of the 57% of the
Net Available Proceeds to be used for the purchase of the Notes, the Notes
shall be selected for purchase on a pro rata basis. Upon completion of a
Required Offer, the amount of Net Available Proceeds shall be reset at
zero. The 43% of the amount of such Net Available Proceeds not to be
utilized for such Required Offer to purchase, as well as the amount of the
57% of the Net Available Proceeds to be used to purchase Notes pursuant to
such Required Offer that is in excess of the amount required to purchase
the Notes tendered by Holders thereof (the "Unencumbered Net Available
Proceeds"), shall not be subject to any such tender obligation and shall be
freely available for use by Purchaser as it deems appropriate. In addition,
any and all financial advisor, legal and other costs and fees incurred by
Purchaser in connection with completing or facilitating any Future
BellSouth Dispositions, Escrow Proceeds or any Required Offer as described
in this Statement shall be deemed to be reduce Net Available Proceeds
resulting from Future BellSouth Dispositions and Escrow Proceeds that are
required to be used to purchase Notes. At such time that the amount of Net
Available Proceeds resulting from additional Future BellSouth Dispositions
or Escrow Proceeds equals or is greater than $5 million (which amount shall
not include the Unencumbered Net Available Proceeds), Purchaser shall be
obligated to utilize 57% of the amount of such additional Net Available
Proceeds to make a subsequent Required Offer, subject to the same terms and
conditions set forth above applicable to the initial Required Offer. The
Proposed Amendments would not restrict Purchaser from using Unencumbered
Net Available Proceeds for the purchase or other retirement of Notes on
such terms as it determines to be appropriate.
The Proposed Amendments would not apply to net proceeds that may be
received from dispositions of assets that Purchaser may undertake other
than pursuant to the BellSouth Agreement. Accordingly, Purchaser would not
be required to use such net proceeds to make a Required Offer as described
above to but would continue to obligated to offer to repurchase Notes at
accreted value at the end of the 270 day reinvestment period as and to the
extent currently provided in the Asset Disposition Covenants.
Purchaser expects, based on discussions with certain Holders of
significant positions in the Notes, that the Requisite Consents will be
delivered on a timely basis under the Solicitation as amended.
CERTAIN ADDITIONAL TERMS OF THE OFFER
Holders who desire to tender their Notes pursuant to the Offer and
receive the Offer Consideration are required to consent to the Proposed
Waivers and Proposed Amendments with respect to such Notes. Holders will
not receive any additional consideration for their consent to the Proposed
Waivers and Proposed Amendments. Holders may consent to the Proposed
Waivers and Proposed Amendments without tendering their Notes pursuant to
the Offer, but will not receive any consideration therefor. The Offer is
subject, among other things, execution by Purchaser and the Trustee of the
Supplemental Indentures providing for the Proposed Waivers and Proposed
Amendments following receipt of the Requisite Consents (the "Consent
Condition"). If the Consent Condition is not satisfied on or prior to 5:00
PM, New York City time, on April 28, 1998, unless extended, Purchaser
currently intends to terminate the Offer without purchasing any Notes
thereunder.
Tenders of Notes may not generally be withdrawn. If Purchaser
reduces either (a) the principal amount of Notes subject to the Offer or
(b) the Offer Consideration, then previously tendered Notes may be validly
withdrawn until the expiration of ten business days after the date that
notice of any such reduction is first published, given or sent to Holders
by Purchaser. In the event of a termination of the Offer, the Notes
tendered pursuant to the Offer will be returned to the tendering Holders
promptly. If Purchaser makes a material change in the terms of the Offer or
the information concerning the Offer or waives a material condition of the
Offer, Purchaser will disseminate additional Offer materials and extend the
Offer to the extent required by law.
Consents may be revoked at any time prior to the Consent Date, but
a valid revocation of a Consent will render a tender of Notes defective.
For a revocation of a Consent to be valid, such revocation must comply with
the procedures set forth in the Statement. If, prior to the Consent Date,
the Solicitation is amended in a manner determined by Purchaser, in its
sole discretion, to constitute a material adverse change to the Holders,
Purchaser promptly will disclose such amendment and may, if appropriate,
extend the Solicitation for a period deemed by Purchaser to be adequate to
permit Holders to properly deliver or revoke their Consents. Other than as
set forth in the Statement, once delivered, Consents may not be revoked.
All questions as to the validity, form, eligibility (including time
of receipt) and acceptance of any tendered Notes or Consents will be
determined by Purchaser, in Purchaser's sole discretion exercised in good
faith (whose determination shall be final and binding). Purchaser reserves
the absolute right to reject any or all tenders of any Notes or Consents
determined by it in good faith not to be in proper form or, in the case of
Notes, if the acceptance for payment of, or payment for, such Notes may, in
the opinion of Purchaser's counsel, be unlawful. Purchaser also reserves
the absolute right, in its sole discretion, to waive any of the conditions
of the Offer or any defect or irregularity in any tender with respect to
Notes or Consents of any particular Holder, whether or not similar defects
or irregularities are waived in the case of other Holders. Purchaser's good
faith interpretation of the terms and conditions of the Offer and the
Solicitation (including the Consent and Letter of Transmittal and the
Instructions thereto) will be final and binding. None of Purchaser, the
Depositary, the Trustee or any other person will be under any duty to give
notification of any defects or irregularities in tenders or will incur any
liability for failure to give any such notification. If Purchaser waives
its right to reject a defective tender of Notes, the Holder will be
entitled to the Offer Consideration.
DLJ has been engaged to act as the Dealer Manager in connection
with the Offer and the Financial Advisor in connection with the
Solicitation. Any Holder that has questions concerning the terms of the
Offer or the Solicitation may contact the Dealer Manager at its address and
telephone numbers set forth on the back cover page of this Statement.
Facsimile copies of the Consent and Letter of Transmittal will not
be accepted. The Consent and Letter of Transmittal, Notes and any other
required documents should be sent or delivered by each Holder or its
broker, dealer, commercial bank or other nominee to the Depositary at one
of its addresses set forth below.
THE DEPOSITARY FOR THE OFFER AND THE SOLICITATION IS:
STATE STREET BANK AND TRUST COMPANY
<TABLE>
<CAPTION>
By Mail By Overnight Courier
<S> <C>
State Street Bank and Trust Company State Street Bank and Trust Company
Corporate Trust Department Corporate Trust Department
P.O. Box 778 Two International Place
Boston, Massachusetts 02102 Boston, Massachusetts 02110
Attention: Sandra Szczsponik Attention: Sandra Szczsponik
By Hand in New York (as Drop Agent) By Hand in Boston
State Street Bank and Trust Company, N.A. State Street Bank and Trust Company, N.A.
61 Broadway Two International Place
Concourse Level, Corporate Trust Window Fourth Floor, Corporate Trust
New York, New York 10006 Boston, Massachusetts 02110
By Facsimile Transmission: Confirm by Telephone:
(For Eligible Institutions Only)
(617) 664-5290 (617) 664-5314
</TABLE>
Any questions or requests for assistance or additional copies of
this Statement, the Consent and Letter of Transmittal or the Notice of
Guaranteed Delivery may be directed to the Dealer Manager at the telephone
numbers and location listed below. You may also contact your broker,
dealer, commercial bank or trust company or nominee for assistance
concerning the Offer and the Solicitation.
THE DEALER MANAGER FOR THE OFFER AND THE FINANCIAL ADVISOR FOR
THE SOLICITATION IS:
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
600 California Street
San Francisco, California 94108
Attention: Arun Arora
Call (415) 249-2125 (collect)
or
1-800-227-4492 (toll-free)
FOR IMMEDIATE RELEASE CONTACT:
DAVID K. SENTMAN
SENIOR VICE PRESIDENT AND CHIEF
FINANCIAL OFFICER
AMERICAN TELECASTING, INC.
TEL: (719) 260-5533
AMERICAN TELECASTING, INC. SUPPLEMENTS TENDER OFFER
FOR A PORTION OF ITS SENIOR DISCOUNT NOTES DUE 2004
AND A PORTION OF ITS SENIOR DISCOUNT NOTES DUE 2005
COLORADO SPRINGS, COLORADO, April 22, 1998 - American Telecasting,
Inc. (Nasdaq: ATEL) today announced that it is supplementing its tender
offer for a portion of its outstanding Senior Discount Notes due 2004 and a
portion of its outstanding Senior Discount Notes due 2005 at a cash price
of $255 per $1,000 principal amount at maturity of the 2004 Notes purchased
and $225 per $1,000 principal amount at maturity of the 2005 Notes
purchased and its related solicitation of consents.
The Company is amending its offer by soliciting consent to amend
certain provisions of the indentures pursuant to which the Notes were
issued that require that proceeds from asset sales that are not used to
acquire new assets or to retire indebtedness within 270 days be used to
make a pro rata offer to purchase outstanding 2004 Notes and 2005 Notes at
a purchase price equal to 100% of the accreted value thereof to any
purchase date prior to maturity.
The proposed amendments would amend the provision described above in
the case of any and all net proceeds received by the Company or any of its
subsidiaries from (i) the up to $46.2 million in proceeds that may be
received in connection with other dispositions contemplated by an agreement
among subsidiaries of the Company, the BellSouth Corporation and a
subsidiary of BellSouth that close after the Expiration Date, depending on
the total number of channel leases and licenses ultimately delivered by the
Company to BellSouth, and (ii) the up to approximately $6.4 million in
proceeds that may be received from an escrow account that was established
under the BellSouth agreement in connection with a disposition completed
prior to the date of the tender offer.
No later than 30 days after the aggregate amount of net available
proceeds resulting from future BellSouth dispositions and the escrow
proceeds first equals or is greater than $10 million, the Company shall be
obligated to utilize 57% of the amount of such net available proceeds to
make an offer to purchase the outstanding Notes, which required offer shall
remain open for a minimum of 20 business days, unless extended, at a
purchase price in cash equal to the greater of (i) $280.50 per $1,000
principal amount at maturity in the case of the 2004 Notes and $247.50 per
$1,000 principal amount at maturity in the case of the 2005 Notes and (ii)
the market value of the Notes as determined on the date preceding the date
of the commencement of the required offer by Donaldson, Lufkin & Jenrette
Securities Corporation, the financial advisor to the Company. If the
aggregate principal amount of Notes tendered by holders thereof pursuant to
a required offer exceeds the amount of the 57% of the net available
proceeds to be used for the purchase of the Notes, the Notes shall be
selected for purchase on a pro rata basis. Upon completion of a required
offer, the amount of net available proceeds shall be reset at zero. The 43%
of the amount of such net available proceeds not to be utilized for such
required offer to purchase, as well as the amount of the 57% of the net
available proceeds to be used to purchase Notes pursuant to such required
offer that is in excess of the amount required to purchase the Notes
tendered by holders thereof, shall not be subject to any such tender
obligation and shall be freely available for use by the Company as it deems
appropriate. In addition, any and all financial advisor, legal and other
costs and fees incurred by the Company in connection with completing or
facilitating any future BellSouth dispositions, escrow proceeds or any
required offer as described in this Statement shall be deemed to be reduce
net available proceeds resulting from future BellSouth dispositions and
escrow proceeds that are required to be used to purchase Notes. At such
time that the amount of net available proceeds resulting from additional
future BellSouth dispositions or escrow proceeds equals or is greater than
$5 million (which amount shall not include the unencumbered net available
proceeds), the Company shall be obligated to utilize 57% of the amount of
such additional net available proceeds to make a subsequent required offer,
subject to the same terms and conditions set forth above applicable to the
initial required offer. The proposed amendments would not restrict the
Company from using unencumbered net available proceeds for the purchase or
other retirement of Notes on such terms as it determines to be appropriate.
The proposed amendments would not apply to net proceeds that may be
received from dispositions of assets that the Company may undertake other
than pursuant to the BellSouth agreement. Accordingly, the Company would
not be required to use such net proceeds to make a required offer as
described above to but would continue to obligated to offer to repurchase
Notes at accreted value at the end of the 270 day reinvestment period as
and to the extent currently provided in the applicable provisions of the
indenture.
The Company expects, based on discussions with certain holders of
significant positions in the Notes, that the requisite consents will be
delivered on a timely basis under the solicitation of consents, as amended.
The Company's obligation to accept for purchase, and to pay for, Notes
tendered pursuant to the offer is not conditioned upon any minimum tender
of either the 2004 Notes or the 2005 Notes or obtaining any financing but
is subject to satisfaction of the receipt of the consents from the holders
of a majority in principal amount at maturity of both the 2004 Notes and
the 2005 Notes on or prior to 5:00 PM, New York City time, on April 28,
1998, unless extended, and to certain other conditions. The Company, in
its sole discretion, may waive any of the conditions of the Offer, in whole
or in part, at any time and from time to time.
The offer and solicitation will expire at 12:00 midnight, New York
City time, on May 7, 1998, unless extended. If the consent condition is
not satisfied on or prior to 5:00 PM, New York City time, on April 28,
1998, unless extended, the Company currently intends to terminate the offer
without purchasing any Notes thereunder.
American Telecasting, Inc. is one of the largest operators of
wireless cable television systems in the United States serving
approximately 138,900 subscribers in 33 markets as of December 31, 1997
(excluding systems sold to BellSouth Corporation in August, 1997).
Wireless cable television systems use microwave frequencies licensed by the
FCC to provide multiple channel subscription television programming.
Along with its commitment to deliver high levels of customer service,
American Telecasting, Inc. offers value programming packages by pricing its
products lower than its franchise cable and direct broadcast satellite
competitors, creating improved value for its customers.
Statement under the Private Securities Litigation Reform Act of
1995: The statements contained in this release regarding the Company's
plans for future development and operation of its business are forward-
looking statements that involve risks and uncertainties. While management
believes that the assumptions underlying these statements are reasonable,
actual results could differ materially. Among the factors that could cause
actual results to differ materially are: a lack of sufficient capital to
finance the Company's business plan on terms satisfactory to the Company;
the Company's inability to develop and implement new services, such as
high-speed Internet access and telephony; the Company's inability to obtain
the necessary FCC authorizations for such new services; competitive
factors, such as the introduction of new technologies and competitors into
the subscription television, high-speed Internet access and telephony
businesses; a failure by the Company to enter into strategic partner
relationships; and the other factors listed on page one of the Company's
Annual Report on Form 10-K. The Company wishes to caution readers not to
place undue reliance on any such forward-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.
Holders of Notes may obtain information relating to the
solicitation by contacting Donaldson, Lufkin & Jenrette Securities
Corporation, the dealer manager for the offer and the financial advisor for
the solicitation, collect at (415) 249-2125 or toll free at (800) 227-4492
attention: Arun Arora.
