Merisel debt plans quashed

The future of US distributor Merisel was left hanging in the balance last week after a group of shareholders rejected the company?s proposal to restructure its debt.

Last week, Merisel admitted that it had been unable to reach an agreement with a committee representing the holders of $125 million (12.5 per cent) of the distributor?s stock.

The shareholders expressed their opposition to a proposal from investment firm Stonington Partners to buy 70 per cent of Merisel?s common stock for $152 million.

The committee filed a law suit in July against Stonington alleging wrongful interference.

Merisel?s shareholders are in favour of an earlier proposal whereby $125 million of the distributor?s debt would be exchanged, with shareholders receiving an 80 per cent equity in the company.

In a statement, Dwight Steffensen, Merisel chairman and chief executive, said: ?It is unfortunate we have not yet been able to successfully negotiate an improvement of the financial restructuring with the shareholders.?

He said the distributor will send shareholders information and give them more time.

The rejection has forced Merisel to postpone a special shareholders meeting from 29 August to 18 September.

The distributor has also confirmed that the failure to conclude a shareholder vote on the restructure of its debts by 31 August will mean it has to pay interest on their 12.5 per cent share holding, as well as shell out a total of $40 million on certain debts from its operating subsidiaries. The company has requested a waiver on those terms.

Merisel has deposited the unpaid interest of about $8 million with a trustee for the 12.5 per cent shareholding, and has instructed the trustee to pay this money to the shareholders in the event that a waiver agreement is not reached.