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February 17, 1987


By CBR Staff Writer

Struggling Western Union Corp, Upper Saddle River, New Jersey, is returning to its bondholders and bankers with essentially the same restructuring plan that it proposed a year ago, but saw rejected by one class of bondholder in September. Its main provision is the exchange of existing debt for new preference shares. The difference this time around is that while the stick is the same – a threat to file for Chapter XI bankruptcy protection if the plan is voted down, the carrot is a little more juicy in that there is an investment group ready to pump money into the company if the plan is approved. Under the new plan, control of Western Union will pass to the investment group, which consists of Pacific Asset Holdings Limited Partnership of Beverley Hills, California, and housebuilder MDC Holdings Inc of Denver. Another change since last time around is that large parts of Western Union’s debt securities, including classes that were voted against the plan last time around, are now held by the investment group, which suggests that the plan, which also involves merging the Western Union Telegraph subsidiary into the parent, will get a fairer wind this time around. Also, Western Union’s bankers have now agreed to accept discounted repayment of the $273m the telecommunications firm owes them.

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