Arris offers stock in exchange for 4½% convertibles

New York, April 12 - Arris Group, Inc. announced an exchange offer in which it is offering stock for its 4½% convertible subordinated notes due 2003.

The Duluth, Ga. broadband local access company is offering 102 shares of its common stock plus accrued interest for each $1,000 principal amount of the notes.

The offer covers up to $70 million of the convertibles; Arris had $115 million outstanding at March 31 but has subsequently exchanged $9.75 million of the securities.

Expiration is 5.00 p.m. ET on May 10 unless extended.

"The exchange offer is a key step by the Company to bolster its balance sheet and capitalization by reducing debt and increasing equity," said Bob Stanzione, Arris president and chief executive officer, in a news release. "The exchange offer will provide holders of the notes a more liquid security that trades on the Nasdaq National Market."

Although the notes mature on May 15, 2003, Arris is required by its revolving credit facility to redeem them no later than Dec. 31, 2002, according to the company's most recent 10-K filing with the Securities and Exchange Commission.

The convertibles were issued in 1998. Under terms of the notes they are convertible at a price of $24.00 per share. Arris stock closed at $9.10 on Friday up 69 cents.

They are callable at 101.8 until May 15, 2002 and at par after that.

The exchange agent is The Bank of New York and the information agent is Morrow & Co. at 212 754-8000 or 800 607-0088.

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