ShopNBC Announces Agreement to Restructure GE Preferred Stock
February 25 2009 - 3:01PM
Marketwired
ShopNBC (NASDAQ: VVTV), the premium lifestyle brand in electronic
retailing, today announced an agreement with GE to restructure and
extend its $44.3 million payment obligation under the Series A
Redeemable Convertible Preferred Stock, currently held by GE and
scheduled to mature in the spring of 2009.
As part of the agreement, GE agreed to exchange all of its
Series A Redeemable Convertible Preferred Stock for the
following:
-- An upfront cash payment of $3.4 million;
-- 4.9 million shares of a new series of non-convertible redeemable
preferred stock with a redemption amount of $40.9 million and a 12%
dividend rate, payable in 2013 and 2014;
-- Repayment of the preferred stock is scheduled for 30% in 2013 and the
remainder in 2014 with accelerated payments possible only if ShopNBC
generates excess cash above agreed upon thresholds; and
-- Warrants to purchase 6 million shares of the company's common stock at
$0.75 per share.
"We are very pleased to have reached an agreement to extend our
payment obligation by five years," said John Buck, ShopNBC's
Chairman of the Board. "This transaction gives us the necessary
time, flexibility, and financial resources to execute the
turnaround of our business."
The company also announced its board of directors authorized a
common stock buyback of up to $1.5 million over the next 12 months.
The timing and amount of any repurchases will be determined by
management based on an evaluation of market conditions and other
factors. The buyback will be funded through existing cash
balances.
About ShopNBC
ShopNBC is a multi-channel electronic retailer operating with a
premium lifestyle brand. The shopping network reaches 72 million
homes in the United States via cable affiliates and satellite: DISH
Network channels 134 and 228 and DIRECTV channel 316.
www.ShopNBC.com is recognized as a top e-commerce site. ShopNBC is
owned and operated by ValueVision Media (NASDAQ: VVTV). For more
information, please visit www.ShopNBC.com/IR.
Forward-Looking Information
This release contains certain "forward-looking statements"
within the meaning of the Private Securities Litigation Reform Act
of 1995. These statements are based on management's current
expectations and accordingly are subject to uncertainty and changes
in circumstances. Actual results may vary materially from the
expectations contained herein due to various important factors,
including (but not limited to): consumer spending and debt levels;
interest rates; competitive pressures on sales, pricing and gross
profit margins; the level of cable and satellite distribution for
the company's programming and the fees associated therewith; the
success of the company's e-commerce and new sales initiatives; the
success of its strategic alliances and relationships and turnaround
efforts; the ability of the company to manage its operating
expenses successfully; the ability of the Company to establish and
maintain acceptable commercial terms with third party vendors and
other third parties with whom the Company has contractual
relationships; changes in governmental or regulatory requirements;
litigation or governmental proceedings affecting the company's
operations; the timing and terms of the contemplated stock buyback;
and the ability of the company to obtain and retain key executives
and employees. More detailed information about those factors is set
forth in the company's filings with the Securities and Exchange
Commission, including the company's annual report on Form 10-K,
quarterly reports on Form 10-Q, and current reports on Form 8-K.
The company is under no obligation (and expressly disclaims any
such obligation) to update or alter its forward-looking statements
whether as a result of new information, future events or
otherwise.
Contacts: Frank Elsenbast Chief Financial Officer 952-943-6262
Anthony Giombetti Media Relations 612-308-1190
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