Protection One reduces debt

Thursday, November 18, 2004

November 18, 2004

TOPEKA, Kan. - In a move that will prevent the company from bankruptcy or an extended court battle with its largest creditor Quadrangle Group, Protection One has worked out an agreement to covert $120 million of debt into 800 million common shares of stock.
Protection One had delayed payment of its debt to Quadrangle Group since Quadrangle purchased the company from Westar Energy in February. As a result of the restructuring, Protection One decreases the amount of debt held by Quadrangle and Quadrangle increases its position in the company to more than 97 percent.
The transaction also calls for a 1:50 reverse stock split and is expected to be finalized within the first quarter of next year.
With the uncertainty of Protection One’s future no longer in doubt, Protection One the business and the security industry as a whole benefits from the company strengthening its position, according to John Mack III president and chief executive officer of USBX Advisory Services.
“They’ve been in the state of limbo for the last couple of years,” said Mack.
And having reported revenue of $277 million in 2003, Protection One is one of the biggest firms in the space. Quadrangle has proved it is financially behind the company, and Protection One can now focus on its business opportunities.
For more on this story, see the December issue of Security Systems News.