KENAI <KEN> SETS NOTE OFFER, AVOIDS CHAPTER 11
Kenai Corp said its shareholders
approved of a reorganization to avoid a chapter 11 filing under
the U.S. bankruptcy code.
    Shareholders approved an increase in authorized shares to
two billion common and two mln preferred, with a par value of
0.001 dlrs per share. A portion of the new shares will be
issued to holders of 57.5 mln dlrs of subordinated debentures,
all of which are in default.
    The company, which was also merged into a subsidiary, said
its 35.7 mln outstanding shares will be exchanged for shares in
the new company on a one-for-one basis.
    According to the exchange offer, each 1,000 dlrs principle
of subordinated debentures will be exchanged for 1,000 shares
of common stock, 500 dlrs principal of a variable interest
subordinated debenture and 24 shares of convertible preferred
stock, the company said.
    It said the offer will result in the issue of 57.5 mln
common shares, 28.85 mln dlrs principle of variable rate
subordinated debentures, and 1.38 mln shares of convertible
preferred stock.
    The company said two holders of 29.9 mln dlrs of debentures
who have already exchanged their holdings for 20.8 mln common
shares and 23.5 mln dlrs principle amount of notes will
resubmit the securities to meet the terms of the current
exchange offer.
    It said the offer is dependent on filings with the
Securities and Exchange Commission.
    The company also said that upon completion of the exchange
offer, it may issue warrants to buy 100 mln shares of common
stock to current shareholders and warrants for 75 mln shares to
employees.
 Reuter
