Any court delay in confirmation of Wang Laboratories Inc’s plan of reorganisation by the bankruptcy court judge was only momentary, and the company duly emerged from Chapter 11 protection after 13 months of supervision – with an unusually clean balance sheet. The Loweller even has financial services companies bidding for its business, and Steinhardt Management was driven to reduce the interest rate and the number of shares it is taking in return for putting up the previously announced $60m of working capital after an investor group led by NatWest Securities made a counter-offer. Original terms of the planned private placing to Steinhardt were for $60m of 12% exchangeable preferred stock, 2.4m new shares issued by Wang, and warrants for 1.2m shares of new common, at an exercise price of $7.50 a share, but under the new terms, the $60m placing will be of 11% exchangeable preferred stock, plus only 1.5m shares of the new common. The new Wang will employ about 6,000 people and looks for a profit of $25m on about $941m turnover for the year to next June – a far cry from the 32,000 people and turnover of $3,000m a year at Under the approved plan, ownership of the company will be transferred to its unsecured creditors, including debtholders; 30m shares of new common in the reorganised Wang will be issued to these creditors, and the current Class B and Class C common stock will be cancelled, to be replaced with seven-year nine-month warrants for new shares, payable only after 95% of total creditors’ claims have been satisfied. Up to 12.5% of the common stock in the new Wang will be owned by employees. The company, whose B and C shares have been traded on the American Exchange until they were cancelled on confirmation of the plan, intends to list its new common stock and warrants on NASDAQ. Holders of the warrants – 7.5m are to be issued – will be entitled to buy 20% of the shares of common stock of the reorganized company issued to its creditors, and they will be exercisable at a price that will be 95% of the estimated amount of all unsecured claims allowed by the Court, which Wang believes will be between $700m and $900m divided by the number of shares of new stock issued to claimholders.

Pleased to be back

The restructuring plan approved by 94% of creditors and some 97% of shareholders. The company is optimistic it will begin to make profits almost immediately by pursuing its new strategy of focusing on software technology and services. We are really pleased to be back, Joseph Tucci, Wang’s president and chief executive told Reuter. Wang was too good to let die. The strength of our company will be our software technology going forward. We have over 35,000 customers throughout the world and we believe our plan is eminently do-able. As we execute the plan and make profits, people will become believers again, said Tucci, noting that Wang, which is looking for new, smaller premises in or around its Massachusetts base in Lowell, currently has about $150m in cash and a strong balance sheet. There are a lot of orders of significance pending the outcome of this judgement today, said a satisfied Tucci. He says he believes Wang’s once-globally recognised name still has value, although the company has developed a new corporate logo which is intended to herald the start of a new era.