Presley Plans Call for Debt Restructuring

The Presley Cos. on Monday reported a net loss of $51 million last year. The home-building company said it is negotiating a debt-restructuring plan that would give lenders control over its operations.

As part of revised terms on $340 million in revolving credit, Presley said its lenders would convert debt of $95 million into 43.16 million shares of common stock, equal to 70% of the company’s total outstanding shares after conversion.

Presley said its plans call for it to sell additional shares in a public offering to raise $100 million within six months of the proposed debt conversion, but no later than Dec. 31. After that sale, the lenders would reduce their stake in the company to 65%.

The remaining $245 million in Presley’s line of credit would become a three-year, $95-million revolving credit line and a $150-million term loan, each with two one-year renewal options.

If the restructuring is completed, the company will expand its board of directors to nine members, of which the lenders would initially elect three.

Presley’s 1993 net loss of $51 million, equal to $2.76 per share, compares to a loss of $10.48 million, or 57 cents per share, in the previous year. The 1993 results include approximately $33 million in write-downs of certain real estate assets. Revenues were $254 million, up 11.3% from $228.14 million the year before. The company said it closed sales on 1,475 homes last year, up 29% from 1,144 in 1992.