ShopNBC Announces Agreement to Restructure GE Preferred Stock
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.
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.
is recognized as a top
e-commerce site. ShopNBC is owned and operated by ValueVision Media
(NASDAQ: VVTV). For more information, please visit
.
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.