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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
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Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
October 6, 1998
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Date of Report (Date of earliest event reported)
Heartland Wireless Communications, Inc.
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(Exact Name of registrant as specified in its charter)
Delaware 0-23695 73-1435149
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(State or Other Jurisdiction (Commission File Number) (I.R.S. Employer
of Incorporation) Identification No.)
200 Chisholm Place, Suite 200, Plano, Texas 75075
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(Address of Principal Executive Offices) (Zip Code)
(972) 423-9494
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(Registrant's Telephone Number, Including Area Code)
N/A
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(Former Name, Former Address and Former Fiscal Year,
if Changed Since Last Report)
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ITEM 5. OTHER EVENTS
As permitted by General Instruction F to Form 8-K promulgated under the
Securities Exchange Act of 1934, as amended, Heartland Wireless Communications,
Inc., a Delaware corporation (the "Registrant") is filing as an exhibit to this
Current Report on Form 8-K that certain press release issued by and on behalf of
the Registrant on October 6, 1998, which such press release is specifically
incorporated herein by reference.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS
(a) Exhibits.
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Exhibit No. Document Description
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99.1 Press Release issued by the Registrant on October 6, 1998.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this Current Report to be signed on its behalf by
the undersigned hereunto duly authorized.
HEARTLAND WIRELESS COMMUNICATIONS, INC.
Dated: October 6, 1998 By: /s/ J. Curtis Henderson
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J. Curtis Henderson
Senior Vice President and General Counsel
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EXHIBIT INDEX
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Exhibit No. Document Description
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<S> <C>
99.1 Press release issued by the Registrant on October 6, 1998
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FOR IMMEDIATE RELEASE
For further information contact:
Carroll D. McHenry
Chairman, CEO and President
972.633.4037
Marjean Henderson
Sr. Vice President and CFO
972.633.4035
HEARTLAND ANNOUNCES AGREEMENT WITH SENIOR BONDHOLDERS
TO SUPPORT PLAN OF REORGANIZATION
DALLAS, Texas - October 6, 1998 - Heartland Wireless Communications, Inc.
(NASDAQ NMS -- HART), America's largest wireless cable company, today announced
that it has reached an agreement with the holders of a majority in principal
amount of Heartland's $115 million 13% senior notes due 2003 and $125 million
14% senior notes due 2004 (together, the "Senior Notes") to support a
"pre-negotiated" plan of reorganization (the "Plan"). The Plan, if consummated,
will allow Heartland to convert the Senior Notes and Heartland's 9% convertible
subordinated discount notes due 2004 (the "Subordinated Notes") into new shares
of Heartland common stock. The aggregate amount of debt to be converted into
common stock under the Plan is expected to total $323 million, comprised of $240
million in principal amount of the Senior Notes and $26 million of accrued
interest, plus $57 million in accreted amount of the Subordinated Notes.
Heartland intends to implement the Plan by filing a voluntary petition under
Chapter 11 of the U.S. Bankruptcy Code and formally soliciting consents of the
holders of the Senior Notes, Subordinated Notes and certain other impaired
claims. Heartland intends to file the Plan with a U.S. Bankruptcy Court on or
before November 13, 1998.
Under the Plan, the reorganized Heartland will emerge with no long-term debt
except for approximately $15 million of installment notes payable to the Federal
Communications Commission ("FCC") for the company's "basic trading areas" or
"BTAs," and certain capital lease obligations.
In exchange for cancellation of the Senior Notes, holders of the Senior Notes
will receive 97% of the issued and outstanding common stock of the reorganized
Heartland. Holders of the Subordinated Notes, existing common stock and certain
litigation claims (collectively, the "Junior Claimants") will receive the
remaining 3% of the common stock of the reorganized Heartland, as well as
warrants ("Warrants") to purchase 10% of the common stock of the reorganized
Heartland on a fully diluted basis (collectively, the "Junior Claimants' Pool").
The exact allocation of the Junior Claimants' Pool to each class of Junior
Claimants has not yet been approved by the company's board of directors.
Under the Plan, the Warrants will have a term of eight and one-half years and an
exercise price based on the total principal amount of Senior Notes and accrued
interest outstanding on the date the Company files its Chapter 11 petition.
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The Plan will provide for continued payment of trade creditors in the ordinary
course of business, including all vendors, programmers, landlords, the FCC, and
all ITFS and MMDS channel license holders that lease excess spectrum capacity to
Heartland. Additionally, the Plan will provide for uninterrupted payment of all
material employee wages and benefits.
Under the Plan, the company's new board of directors will consist of seven
members, all of whom will be selected by the holders of the Senior Notes, except
that one director will be a member of the company's management. The Plan
contemplates that the company will implement compensation and incentive plans to
align the interests of management and key employees with the owners of the
reorganized Heartland.
Carroll McHenry, Chairman, President and CEO of Heartland, commented, "With the
assistance of our financial advisors, over the last 10 months we have examined
several alternatives to a pre-negotiated bankruptcy filing. Because of the
enormous burden of servicing our long-term debt, we believe that this action is
the best alternative to allow the company to strengthen its balance sheet,
execute its future business plan and maximize the value of its assets. We intend
to continue payments to all trade creditors, channel lessors and employees, and
the Plan will not impede management in operating our business in the ordinary
course. We also anticipate no change of programming or interruption of service
to our customers. Heartland should emerge from these proceedings with the
strongest capital structure in the wireless cable industry."
Although the holders of a majority in principal amount of the Senior Notes have
agreed to support the Plan, consummation of the Plan is subject to receipt of
additional requisite votes accepting the Plan following its filing with the
Bankruptcy Court, and confirmation of the Plan by the Bankruptcy Court. There is
no guarantee that the requisite acceptances or confirmation will be obtained.
* * * *
Wireless cable operators use FCC-licensed microwave frequencies in the 2.1-2.7
GHz range to deliver cable television programming and high-speed Internet
services. Heartland Wireless Communications, Inc. is America's largest wireless
cable television company, currently serving approximately 166,000 video
subscribers in 57 markets. Heartland holds wireless cable channel rights in 90
small to mid-size markets located in the central U.S., and owns a 20% equity
interest in Wireless One, Inc. (NASDAQ -- WIRL), the largest wireless cable
operator in the southeastern U.S., and a 36% equity interest in CS Wireless
Systems, Inc., one of the largest wireless cable companies in the nation in
terms of subscribers and line-of-sight households.
The Company invites you to visit its Web site at
http://www.heartland-wireless.com.
Except for any historical information contained in this press release, this
press release contains forward-looking statements that involve risks and
uncertainties, including the risk of non-approval or non-confirmation of the
Plan and other risks and uncertainties described in the company's 10-K for the
period ended December 31, 1997, the company's 10-Q for the period ended June 30,
1998, and other SEC reports of Heartland Wireless Communications, Inc.
