The Fairchild Corp. plans restructuring

Electronic News,  Oct 13, 1997  

• E-mail
• Print
• Link

New York--In addition to news that the company would focus its business on the aerospace industry and spin off certain non-core assets, The Fairchild Corp., worldwide aerospace fastener manufacturer, parts distributor and semiconductor process equipment manufacturer, last week revealed plans to issue 5 million new shares of Class A common stock and refinance all its public debt, according to Jeffrey J. Steiner, chairman/CEO of Fairchild.

Following the debt refinancing, Fairchild will commence a spinoff to its stockholders of its holdings in high-tech equipment, non-aerospace manufacturing and real estate once it has resolved tax, legal, regulatory and accounting issues. This is expected to be done in 1998.

After the spinoff, The Fairchild Corp. will be comprised of its Fairchild Fasteners division, which manufactures aircraft fasteners, and its 64 percent-owned subsidiary, Banner Aerospace, Inc., a distributor of aerospace hardware. It is expected that all of the debt being refinanced will remain with The Fairchild Corp., as well as its interest in Shared Technologies Fairchild, Inc., which is expected to merge into Tel-Save Holdings, Inc., during calendar 1997. The core aerospace units of Fairchild presently constitute about 92 percent of the company's revenue, or $676 million of the company's total sales of $738 million in fiscal 1997. Operating income in fiscal 1997 from the aerospace units was $48.3 million, compared with $14.8 million on a pro forma basis in fiscal 1996.

The new company to be spun off to stockholders will be called Fairchild Industrial Holdings Corp., and will include Fairchild Technologies, designer and manufacturer of production equipment for semiconductor and compact disc manufacturing; Fairchild's 32 percent interest in Nacanco Paketleme, the manufacturer of two-piece beverage cans in Turkey; and real estate holdings, principally large tracts of land on Long Island, New York, and certain residual liabilities.

Last week, the company filed with the Securities and Exchange Commission for a potential issue of 5 million new shares of Class A common stock, bringing the total number of outstanding shares to 21.6 million. Fairchild plans to redeem all of its outstanding public debt with the proceeds of the stock offering and a new bank credit facility. As a result, the company expects interest expense to be reduced by $21 million for fiscal 1997.

The SEC Form S-3 also registers the potential sale of 435,000 shares of Class A common stock by certain selling stockholders (subject to possible increase by an additional 812,000 shares pursuant to an over-allotment option granted to the underwriters).

Donaldson, Lufkin & Jenrette, BT Alex. Brown Inc. and SBC Warburg Dillon Read, Inc. will underwrite the new equity issue.

COPYRIGHT 1997 Reed Business Information, Inc. (US)
COPYRIGHT 2008 Gale, Cengage Learning