<DOCUMENT>
<TYPE>425
<SEQUENCE>1
<FILENAME>g69708ye425.txt
<DESCRIPTION>KELLSTROM INDUSTRIES 333-56750
<TEXT>
<PAGE> 1
Filed by Kellstrom Industries, Inc.
Pursuant to Rule 425 under the Securities Act of 1933
Registration No: 333-56750
FOR IMMEDIATE RELEASE
KELLSTROM INDUSTRIES, INC. ANNOUNCES
AMENDMENTS TO ITS PENDING EXCHANGE OFFER
FOR CONVERTIBLE SUBORDINATED NOTES
Miramar, Fla. - June 12, 2001 - Kellstrom Industries, Inc. (NASDAQ: KELL) today
announced that it has amended its pending exchange offer for its outstanding
5-3/4% convertible subordinated notes due October 15, 2002 (CUSIP Nos. 488035AC0
and U48787AA0) and 5-1/2% convertible subordinated notes due June 15, 2003
(CUSIP No. 488035AE6). Under the amended offer, Kellstrom is offering to
exchange up to $96 million principal amount of old notes, which may include up
to $54 million of old 5-3/4% notes and/or up to $86.25 million of old 5-1/2%
notes, in any combination totaling no more than $96 million in aggregate.
Noteholders can choose to exchange old notes for any of the following three
options:
o new senior subordinated notes (Option I);
o new mandatorily redeemable notes (Option II); or,
o new convertible subordinated notes (Option III).
Holders do not have to choose the same series of new notes for all of the old
notes that they tender.
o Noteholders who choose new senior subordinated notes (Option I) will
receive $1,000 principal amount of new 8-1/2% senior subordinated
notes due March 31, 2008 for each $1,000 principal amount of old
notes. However, Kellstrom will issue no more than $30 million
principal amount of new senior subordinated notes. The new senior
subordinated notes will be senior subordinated obligations of
Kellstrom and will be guaranteed on a senior subordinated basis by
Kellstrom's material subsidiaries.
o Noteholders who choose new mandatorily redeemable notes (Option II)
will receive $1,000 principal amount of new 7% mandatorily
redeemable subordinated notes due March 31, 2008 for each $1,000
principal amount of old notes. However, Kellstrom will issue no more
than $30 million principal amount of mandatorily redeemable notes.
Kellstrom will be required to make scheduled principal payments on
the mandatorily redeemable notes, commencing on March 31, 2002 and
continuing on March 31 of each year through 2008.
o Noteholders who choose new convertible subordinated notes (Option
III) will receive $500 principal amount of new 6% convertible
subordinated notes due March 31, 2008 for each $1,000 principal
amount of old notes. However, Kellstrom will issue no more than $18
million principal amount of new convertible notes. The conversion
price of the new convertible notes will be $7.56 per share, subject
to customary adjustment provisions.
If tenders for new senior subordinated notes (Option I) exceed $30 million of
old notes, the excess tenders will automatically be considered tenders for new
mandatorily redeemable notes (Option II). If tenders for new mandatorily
redeemable notes exceed $30 million of old notes, the excess tenders will
<PAGE> 2
automatically be considered tenders for new convertible subordinated notes
(Option III). If tenders for new convertible subordinated notes exceed $36
million of old notes, the excess tenders will not be accepted.
Each series of new notes will be issued on a first priority basis in exchange
for 5-3/4% convertible subordinated notes due 2002. Accordingly, all the new
senior subordinated notes, mandatorily redeemable notes or convertible notes, as
applicable, will be issued in exchange for all old 5-3/4% notes that were
tendered for such new series before any new notes of that series are issued in
exchange for old 5-1/2% notes.
Old 5-3/4% notes tendered for any series of new notes will be accepted on a pro
rata basis from all tendering holders of old 5-3/4% notes. Old 5-1/2% notes
tendered for any series of new notes will be accepted on a pro rata basis from
all tendering holders of old 5-1/2% notes.
If the exchange offer is fully subscribed, a total of $78 million principal
amount of new notes will be issued. All the new notes issued in the offer will
rank senior in right of payment to the old notes that remain outstanding after
consummation of the offer. A minimum of $44.25 million and a maximum of $55.25
million of old notes will remain outstanding.
After consummation of the offer, Kellstrom's outstanding debt will rank in right
of payment as follows: first, senior debt, including Kellstrom's $250 million
secured credit facility; second, the new senior subordinated notes issued in the
offer and Kellstrom's $30 million of 13% senior subordinated notes due 2007,
which were issued in November 2000; third, the new mandatorily redeemable notes
and the new convertible notes issued in the offer; and last, the remaining old
5-3/4% notes and old 5-1/2% notes.
Kellstrom will pay accrued interest in cash on all old notes accepted for
purchase in the offer.
The expiration date for the offer will be 5:00 p.m., New York City time, on June
26, 2001, unless earlier terminated or extended. Holders must tender their old
notes on or prior to the expiration date in order to receive new notes.
As of 5:00 p.m., New York City time, on June 11, 2001, the Company had received
tenders from holders of $23.2 million in aggregate principal amount of the
5-3/4% convertible subordinated notes, representing 42.7% of the outstanding
5-3/4% notes, and $10.7 million in aggregate principal amount of the 5-1/2%
convertible subordinated notes, representing 11.9% of the outstanding 5-1/2%
notes.
The offer is subject to the satisfaction of specified conditions, including the
receipt of tenders for at least $85 million principal amount of old notes, the
receipt of requisite consents to the exchange offer from the lenders under
Kellstrom's senior credit facility and receipt of consent from the holder of
Kellstrom's existing senior subordinated notes.
The complete terms of the offer are contained in the amended Preliminary
Prospectus and Exchange Offer documents dated June 12, 2001.
<PAGE> 3
Banc of America Securities LLC is the exclusive dealer manager for the exchange
offer. D.F. King & Co., Inc. is the information agent and First Union National
Bank is the depositary. Copies of the Preliminary Prospectus and Exchange Offer
documents can be obtained by calling D.F. King at (800) 928-0153. Additional
information concerning the terms and conditions of the offer may be obtained by
contacting Banc of America Securities LLC at (888) 292-0070.
Kellstrom is a leading aviation inventory management company. Its principal
business is the purchasing, overhauling (through subcontractors), reselling and
leasing of aircraft parts, aircraft engines and engine parts. Headquartered in
Miramar, FL, Kellstrom specializes in providing: engines and engine parts for
large turbo fan engines manufactured by CFM International, General Electric,
Pratt & Whitney and Rolls Royce; aircraft parts and turbojet engines and engine
parts for large transport aircraft and helicopters; and aircraft components
including flight data recorders, electrical and mechanical equipment and radar
and navigation equipment.
Kellstrom has filed a Registration Statement with the SEC on Form S-4
registering the new notes, the related guarantees and the underlying shares to
be offered in the exchange offer as well as a Schedule TO. The Registration
Statement and Preliminary Prospectus and Exchange Offer document contained in
the Registration Statement contain important information about Kellstrom, the
exchange offer and related matters. Noteholders are urged to read the
Registration Statement and the Preliminary Prospectus and Exchange Offer
documents, Kellstrom's Schedule TO and any other relevant documents Kellstrom
filed with the SEC.
The Registration Statement has not yet become effective. The new notes may not
be sold and, although holders of the old notes may tender their old notes,
tenders may not be accepted prior to the time the Registration Statement becomes
effective. This press release shall not constitute an offer to sell or an offer
to buy nor shall there be any sale of the new notes in any state in which such
offer, solicitation or sale would be unlawful.
Noteholders are able to obtain copies of the Registration Statement on Form S-4
and the Preliminary Prospectus and Exchange Offer document, Kellstrom's Schedule
TO and any other relevant documents for free through the website maintained by
the SEC at http://www.sec.gov. In addition, these documents are available free
of charge by contacting the information agent for the offer, D.F. King & Co., at
(800) 928-0153. If you have any questions about the offer, please call the
dealer manager for the offer, Banc of America Securities LLC, at (888) 292-0070.
CONTACT: Banc of America Securities LLC
Sam McNeil/Andrew Karp at (704) 386-1758
# # #
</TEXT>
</DOCUMENT>