Clubhaus to restructure debt, bondholders to receive 80% of equity, new notes

New York, Feb. 27 - Clubhaus plc said it has reached an agreement on restructuring its debt that will give bondholders 80% of the equity of the company plus new notes.

The proposal would give the company a positive net asset position and reduce its significant cash interest burden, Clubhaus said.

The company added that the plan is the result of discussions with an informal committee representing holders of 73% of its £60 million of 12 7/8% notes, its preference shareholder and its principal bankers.

Shareholders will be asked to support the plan at an extraordinary general meeting.

Out of Clubhaus' existing £60 million of notes, £45 million plus unpaid interest will be converted into stock at a conversion price of 7 pence per share. In total bondholders will receive 730 million new ordinary shares representing 80% of the company's equity.

The remaining £15 million of notes will remain outstanding but at a reduced coupon of 6% through Dec. 31, 2002 and 8% in the year after that. Clubhaus will also have the option to pay interest in kind for these two years at a rate of 10%. From Jan. 1, 2004 onwards the interest rate will be 12%. The notes will mature 2009 and will be callable any time at par.

Clubhaus failed to make the £3.9 million interest payment due Dec. 1, 2001 on the notes and has also failed to pay the dividend of £380,000 due in May 2001 on its £7.6 million 5% B redeemable preference shares due December 2003.

The preference shares are owned by Marylebone Warwick Balfour Group plc. As part of the restructuring, this company has agreed to convert the preference shares and the dividend right into stock at a conversion price of 10 pence per share. Marylebone Warwick will receive 79.8 million new ordinary shares or 9% of the equity.

Clubhaus' bankers have agreed to a new £42.3 million seven-year medium-term loan facility and its other bank facilities will remain unaffected.

After the restructuring, existing shareholders will own 11% of the company.

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