JOHNSTOWN AMERICAN <JAC> MAKES EXCHANGE OFFER
Johnstown American Cos said it began a
tender offer for the 500,000 outstanding shares of its 1985
preferred stock.
    Under the offer, the company said holders of the preferred
would receive one share of a new issue of convertible
redeemable preferred stock for each share of their 1985
preferred.
    The company said terms of the new preferred will permit it
to redeem and retire the 1985 preferred shares at a discount
from their current liquidation value of 50 mln dlrs, or 100
dlrs a share.
    The company said that if all the 1985 preferred shares are
tendered, it will issue 500,000 1987 preferred shares, disburse
250,000 dlrs and cancel all 1985 preferred shares that are
tendered.
    The company said that if it elects to redeem the 1987
preferred, it must pay holders 12.3 mln dlrs in cash.
    It said it must also issue warrants for the purchase of
three mln common shares at a price of 4.50 dlrs a share or 33
pct over the market price on the day before the notice of
redemption, whichever is greater.
    The company said the exchange offer is conditioned on
tendering shareholders releasing certain rights to contingent
payouts and profit-share interests that were given in
connection with its 1985 acquisition of Consolidated Capital
Equities Corp and Johnstown Management Co.
    The offer, it said, is also conditioned on the tender of at
least two-thirds of the outstanding preferred shares. The
company said the exchange offer will expire at 1500 EST on May
one, unless extended.
 Reuter
