Mercury Air (AMEX:MAX)
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Mercury Air Group, Inc. Special Committee Evaluates Proposed
Reverse/Forward Split; Subsequent Deregistration Contemplated
LOS ANGELES, March 8 /PRNewswire-FirstCall/ -- Mercury Air Group, Inc.
(AMEX:MAX) today announced that a special committee of its Board of Directors,
comprised of two independent directors, is in the process of evaluating a
proposed reverse/forward stock split. The proposal contemplates an amendment
to Mercury's certificate of incorporation, which, if approved by its Board of
Directors and stockholders, would result in a reverse stock split of Mercury's
common stock in such a ratio as to reduce the number of stockholders of record
from its current level of approximately 331 to less than 300.
Under Mercury's proposal, holders of less than a specified number of shares
prior to the reverse stock split who would otherwise be entitled to receive
fractional shares as a result of the reverse stock split, would instead receive
a cash payment for those shares. It is anticipated that less than 200,000
shares will be repurchased for cash as a result of the reverse split. Under
Mercury's proposal, the payment for the fractional shares is expected to be
between $3.75 and $4.25 per pre-reverse split share.
The special committee has appointed a financial adviser to advise it concerning
valuation and liquidity issues relating to the reverse stock split. The reverse
stock split and the price to be paid for fractional shares will be subject to
amendments of Mercury's current credit agreement, the special committee's
deliberation and recommendation of the reverse stock split to the full Board of
Directors and the approval by Mercury's Board of Directors and stockholders.
Holders of a number of shares in excess of the designated exchange ratio prior
to the reverse stock split will continue to be stockholders after the reverse
stock split and will not be entitled to have such shares repurchased. It is
contemplated that immediately following the reverse stock split there will be a
forward stock split in the same ratio, so that stockholders owning a number of
shares above the designated number will continue to own the same number of
shares as they did prior to the reverse stock split.
If the reverse split were affected as planned, Mercury would have fewer than
300 stockholders of record. If that is the case, Mercury would deregister its
common stock under the Securities Exchange Act of 1934, Mercury's common stock
would no longer be traded on the American Stock Exchange, and Mercury would be
relieved of the previous cost estimates associated with implementing the
Section 404 internal controls provisions of the Sarbanes-Oxley Act of 2002. In
its quarterly report on Form 10-Q for the period ended December 31, 2004,
Mercury estimated that such compliance costs could exceed $2.5 million.
Although Mercury's shares no longer will be quoted on the American Stock
Exchange, Mercury expects that its common stock will trade in the
over-the-counter (OTC) market and will be quoted on the Pink Sheets. The Pink
Sheets is a provider of pricing and financial information for OTC securities.
It is a centralized quotation service that collects and publishes market maker
quotes in real time primarily through its website, http://www.pinksheets.com/,
which provides stock and bond price quotes, financial news and information
about securities traded.
No assurance can be given that any transaction will take place on these or any
other terms or that the Company's stock will be quoted on the Pink Sheets.
About Mercury Air Group
Los Angeles-based Mercury Air Group (AMEX:MAX) provides aviation petroleum
products, air cargo services and transportation, and support services for
international and domestic commercial airlines, general and government aircraft
and specialized contract services for the United States government. Mercury
Air Group operates three business segments worldwide: MercFuel, Inc., Maytag
Aircraft Corporation and Mercury Air Cargo, Inc. For more information, please
visit http://www.mercuryairgroup.com/.
Certain statements contained in this news release, which are not historical
facts, are forward looking statements as that item is defined in the Private
Securities Litigation Reform Act of 1995. Such forward-looking statements are
subject to risks and uncertainties that could cause actual results to differ
materially from estimated results. Such risks and uncertainties are detailed
in the Company's filings with the Securities and Exchange Commission. The
Company intends these forward-looking statements to speak only as of the time
of the news release and does not undertake to update or revise them, as more
information becomes available.
Company Contact:
Joseph Czyzyk
Mercury Air Group, Inc.
(310) 827-2737
DATASOURCE: Mercury Air Group, Inc.
CONTACT: Joseph Czyzyk of Mercury Air Group, Inc., +1-310-827-2737
Web site: http://www.mercuryairgroup.com/