Print Page  Close Window

SEC Filings

S-4/A
AVALON CABLE OF MICHIGAN INC/ filed this Form S-4/A on 07/22/1999
Entire Document
 
<PAGE>
 
                                  RISK FACTORS
 
   You should carefully consider each of the following factors and all of the
other information in this prospectus before tendering your old notes for new
notes.
 
If you do not participate in the exchange offer your ability to sell your notes
will be more limited.
 
   If you do not exchange your old notes in the exchange offer, you will
continue to be subject to restrictions on transfer on your old notes. We did
not register the old notes under the federal or any state securities laws, and
we do not intend to register them following the exchange offer. As a result,
the old notes may only be transferred in limited circumstances under the
securities laws. In addition, to the extent initial notes are tendered and
accepted in the exchange offer, the trading market, if any, for the old notes
would be adversely affected. As a result, after the exchange offer, you may
have difficulty selling your old notes.
 
If you do not follow the exchange offer procedures carefully you will not
receive the new notes.
 
   If you do not follow the procedures described herein, you will not receive
new notes. The new notes will be issued to you in exchange for your old notes
only after timely receipt by the exchange agent of:
 
  . your old notes and
 
  either:
 
    . a properly completed and executed letter of transmittal and all other
      required documentation or
 
    . a book-entry delivery by transmittal of an agent's message through
      The Depository Trust Company.
 
If you want to tender your old notes in exchange for new notes, you should
allow sufficient time to ensure timely delivery. No one is under any duty to
give you notification of defects or irregularities with respect to tenders of
old notes for exchange. For additional information, please refer to "The
Exchange Offer" and "Plan of Distribution" sections of this prospectus.
 
Our substantial indebtedness could make us unable to service our indebtedness
and meet our other requirements and could adversely affect our operations and
financial health.
 
   The issuers have a substantial amount of debt outstanding. This high level
of debt and the related need to devote a significant portion of our cash flow
to meeting debt service and other fixed charges could adversely affect our
operations and financial condition. As of March 31, 1999, on a pro forma basis,
the issuers would have had on a combined basis outstanding long-term
indebtedness of approximately $442.7 million and shareholders' equity of
approximately $141.1 million. In addition, on a pro forma basis, combined
interest expense for the issuers would have been $12.0 million for the quarter
ended March 31, 1999 and $45.5 million for the year ended December 31, 1998. On
a pro forma basis, the combined earnings of the issuers would have been
insufficient to cover their fixed charges by approximately $0.0 million for the
quarter ended March 31, 1999 and $8.9 million for the year ended December 31,
1998. In these periods, however, earnings are reduced by substantial non-cash
charges, principally consisting of depreciation and amortization of $11.2
million and $44.8 million and accreted interest of $3.3 million and $15.0
million for the quarter ended March 31, 1999 and for the year ended December
31, 1998, respectively. Subject to the restrictions in the indenture governing
the old notes and the new notes and other applicable agreements, the issuers
and their subsidiaries may incur additional indebtedness, from time to time,
which could result in greater interest expense and fixed charges.
 
   The amount of debt and debt service obligations of the issuers could have
important consequences to you, including the following:
 
  . the issuers may have limited ability to obtain additional financing for
    working capital, capital expenditures or acquisitions in the future;
 
                                       13