From VNO 10Q: "Primestone...has defaulted on the repayment of it loan..which was due Oct25, 2001. The principal amt of the loan is $62,000,000 and there is $3,958,000 of unpaid interest and fees. The loan is secured by 7,944,893 units of Prime Grp Realty LP...and is exchangeable into the same number of shares of PGE. It is also guaranteed by affiliates of the borrower. The loan was subordinate to $37,957,000 of 3rd party indebtedness secured by the same collateral. On Oct 31, 2001, the Company purchased the $37,957,000 of third party indebtedness and has commenced foreclosure proceedings with respect to the collateral".
So, VNO is attempting to get control of the 7.9M shares of PGE; I figure their cost is about $13.08. Is Reschke going to fight? Will he declare personal bk. to slow this thing down?
I'm assuming this $38M in debt VNO purchased is different than the $40M that will come due in February?
This would seem to be where it's at, happily now with an even stronger VNO involment thru the additional investment of buying the senior loan. They are clearly in the drivers seat regardless of any potential delaying tactics of Reschke. A little time for the dust to settle and VNO's longer term strategy will become clear. The common has upward potential and the Preferred B should move closer to par with dividend preference as icing on the cake.
The 3rd party debt secured by the same colleteral had to be Prudential's. The $40 million needed after Jan 15 is to purchase the Pf A stock which the holder, Security Capital, can put to PGE after that date.