Kaiser Group Holdings Announces Plans for Initial Distribution Under Kaiser Group International Plan of Reorganization

Apr 17, 2001, 01:00 ET from Kaiser Group Holdings, Inc.

    FAIRFAX, Va., April 17 /PRNewswire/ -- Kaiser Group Holdings, Inc.
 (OTC Bulletin Board:   KSRGQ), the successor issuer to its subsidiary, Kaiser
 Group International, Inc., today announced plans for the initial distribution
 under the Kaiser Group International Second Amended Plan of Reorganization.
 As more fully described below, Kaiser Group Holdings will be distributing
 under the Plan cash and shares of its preferred and common stock.  Trading
 symbols for those securities on the over-the-counter bulletin board will be
 announced when assigned by the NASD.  The Company expects former Kaiser Group
 International, Inc.'s common stock to continue to trade for a transition
 period on the over-the-counter bulletin board under the symbol "KSRGQ."
     Kaiser Group Holdings, Inc. was formed in December 2000 in connection with
 the effectiveness, on December 18, 2000, of the Kaiser Group International,
 Inc. Second Amended Plan of Reorganization under Chapter 11 of the United
 States Bankruptcy Code.  The Plan is described in detail in the Current Report
 on Form 8-K filed with the Securities and Exchange Commission by Kaiser Group
 International on December 14, 2000 and, in less detail, in the Annual Report
 on Form 10-K filed with the SEC by Kaiser Group Holdings on April 2, 2001.
     In very general terms, the Plan contemplates different types of
 distributions to be made to three basic classes of creditors.
     Holders of so-called "Class 3" claims in the Kaiser Group International
 bankruptcy -- generally trade and similar creditors with claims of $20,000 or
 less -- will receive cash for their claims.  Such payments, aggregating
 approximately $0.9 million, will be mailed to holders of such claims on or
 about April 17.
     "Class 4", the largest class of claims in the Kaiser Group International
 bankruptcy, is made up of creditor claims other than Class 3 claims and equity
 claims.  Class 4 claims include holders of the former Kaiser Group
 International senior subordinated notes due 2003.  Holders of Class 4 claims
 are to receive a combination of cash and Kaiser Group Holdings preferred and
 common stock in respect of their claims.  Such holders will receive one share
 of preferred stock and one share of common stock for each $100 of claims.
 However, the number of shares of preferred stock to be issued will be reduced
 by one share for each $55.00 of cash received by the holder of a Class 4
 claim.  Thus, the more cash that is available for distribution, the less
 preferred stock actually will be issued.
     The process of resolving in excess of $500 million of claims initially
 filed in the Kaiser Group International bankruptcy process is ongoing.  At the
 present time, there are approximately $136.8 million of Class 4 claims that
 have been allowed in the bankruptcy process.  However, the current total
 amount of unresolved claims is approximately $130.3 million.
     The Company continues to believe that the amount of Class 4 Claims
 ultimately allowed in the Kaiser Group International bankruptcy will be
 approximately $150 million.  However, the Plan provides that cash reserves
 must be retained by Kaiser Group International with respect to unresolved
 claims.  Because of delays in, and substantial uncertainties as to the
 resolution of unresolved claims, Kaiser Group International is required by the
 terms of the Plan to hold a substantial cash reserve against these unresolved
 claims.  This factor and others, including the fact that Kaiser Group
 International has not yet received a substantial cash payment that the Company
 claims it is due from the owner of the Nova Hut steel mini-mill in the Czech
 Republic, limit the amount of cash available for distribution at this time to
 the holders of allowed Class 4 claims.  The Company has determined that an
 aggregate of approximately $12.8 million of cash, or approximately $0.09347
 per $1.00 of allowed Class 4 claims, will be distributed in the initial
 distribution to holders of allowed Class 4 claims.  Thus, more shares of
 Kaiser Group Holdings preferred stock will be issued than would have been the
 case had the claims resolution process advanced more quickly and had more cash
 been available from the Nova Hut project and other sources.
     Kaiser Group Holdings expects to make substantial progress in the
 resolution of currently unresolved claims over the balance of this calendar
 year.  The Board of Directors plans to consider, not less often than
 quarterly, the amount of cash that can be released from reserves as a result
 of claims resolution and made available to redeem preferred stock at the
 redemption price of $55.00 per share.
     The following table depicts the projected status, as of the April 17, 2001
 initial distribution date, of the initial distribution under the Plan.  This
 table updates the similar table included in the recently-filed Annual Report
 on Form 10-K with respect to the initial distribution.  For a projection of
 the effects of all distributions in the bankruptcy process, see the table
 included in Part I, Item 1 of the Annual Report on Form 10-K.
 
 
     Actual Amounts as
     of the Initial          Claim     Distribution        % of
     Distribution Date:      Amount        Amount          Total     Cash
     ($'s in thousands)                 %       $Value
 
     Amount of Allowed
     Class 3 Claims           $912    100%       $912       1%       $912
 
     Amount of Allowed
     Class 4 Claims
                          $136,863     55%    $75,275      51%      $12,793
 
     Remaining Amount of
     Unresolved Claims     130,329     55%     71,681      48%      12,183/NI/
 
     Holders of Old
     Common Stock             --                 --                     --
 
     Totals               $268,104           $147,868     100%      $25,888
 
 
 
                                              Distribution Element
 
                                    Liquidation          # of           # of
                                   Preference of      shares of      shares of
                                      of New              New           New
     Actual Amounts as of the        Preferred         Preferred      Common
     Initial Distribution Date:        Stock            Stock          Stock
     ($'s in thousands)
 
     Amount of Allowed
     Class 3 Claims                       --              --            --
 
     Amount of Allowed
     Class 4 Claims
                                     $62,482         1,136,023      1,368,632
     Remaining Amount of
     Unresolved Claims                59,498            /NI/          /NI/
 
     Holders of Old
     Common Stock                        --               --         241,563
 
     Totals                         $121,980                       1,610,195
 
 
     /NI/ Not Issued.  The Company is required to retain cash, new preferred
 stock and new common stock for all unresolved claims at the claimed amount
 until such claims are resolved. Shares of new preferred stock and new common
 stock will not be issued until claims are resolved and deemed Allowed.  Upon
 the resolution of all remaining outstanding claims, available retained cash
 balances will be used to redeem shares of outstanding new preferred stock.
 
     The third class of claims recognized in the Kaiser Group International
 bankruptcy are equity claims, consisting of holders of former Kaiser Group
 International common stock and other "Equity Interests" as defined in the
 Plan.  Apart from holders of former Kaiser Group International common stock,
 the only holders of Equity Interests of which the Company is aware are the
 former shareholders of ICT Spectrum Constructors, Inc., a corporation acquired
 by merger with a subsidiary of Kaiser Group International in 1998.  The
 Bankruptcy Court recently confirmed the equity nature of those claims, which
 will be treated as such in the initial distribution.
     Under the Plan, holders of Equity Interests will receive a number of
 shares of common stock of Kaiser Group Holdings equal to 17.65% of the number
 of shares of such common stock issued to holders of Class 4 Claims.  At this
 time, one share of Kaiser Group Holdings common stock will be issued for each
 96 shares of previously outstanding Kaiser Group International common stock.
 Under the Plan, neither fractional shares of Kaiser Group Holdings common
 stock, nor cash in lieu of fractional shares, will be issued in connection
 with the initial distribution.  Additional distributions of Kaiser Group
 Holdings common stock will be made as additional shares of common stock are
 issued to holders of newly allowed Class 4 claims.
     Holders of former Kaiser Group International common stock and holders of
 allowed Class 4 claims representing former senior subordinated notes will
 receive by mail letters of transmittal with instructions as to how to effect
 the distribution of Kaiser Group Holdings preferred and common stock.
     The exchange ratio of Kaiser Group Holdings common stock for former Kaiser
 Group International common stock (1 share for 96 shares) and the nature of the
 distribution of shares of common stock to holders of Class 4 claims will
 likely result in there being a number of holders of a relatively small number
 of shares of Kaiser Group Holdings common stock.  The ultimate value of such
 stock will likely depend primarily on the future performance of Kaiser-Hill
 Company, LLC, and it will be at least several years until such value can be
 reasonably estimated.  In the near term, the market value of Kaiser Group
 Holdings common stock will likely be low in relation to (1) the cost to the
 Company of maintaining the existence of holders of small numbers of shares of
 common stock and (2) the cost to the holder of effecting sales of a small
 number of shares.  Therefore, the letters of transmittal to be sent to holders
 of former Kaiser Group International common stock and senior subordinated
 notes will include an offer to purchase all, but not less than all, shares of
 Kaiser Group Holdings common stock distributable to persons who will receive
 99 or fewer shares in the initial distribution for a price equal to $4.50 per
 share.  This price is based generally on the trading price of Kaiser Group
 International common stock during the past 30 days, which may not bear any
 relation to the true value of such shares.  The Company makes no
 representation as to the fairness of the offer price.
     In the case of holders of former Kaiser Group International common stock,
 the offer to purchase shares is conditioned on the holder's agreement to also
 sell the holder's right to future distributions of shares of Kaiser Group
 Holdings common stock under the Plan.  The offer price for such distribution
 rights is $0.50 per share that would otherwise be distributed at this time.
 This offer price was determined arbitrarily, based primarily on the Company's
 current expectation that future distributions of shares of Kaiser Group
 Holdings common stock will be approximately 10% of the number of shares
 distributed at the present time.  Holders who wish to sell their right to
 future distributions must also sell their shares of Kaiser Group Holdings
 common stock.
     The offers referred to above are made only pursuant to, and subject to the
 conditions set forth in, the letters of transmittal referred to above.
 
     Forward-Looking Statements and Certain Factors Affecting Kaiser and Its
 Businesses
     This release contains "forward-looking statements" within the meaning of
 the Private Securities Litigation Reform Act of 1995, which are identified by
 the use of forward-looking terminology such as "may," "will," "could,"
 "should," "expect," "believe," "anticipate," "aim," "intend," "plan,"
 "estimate," or "continue" or the negative thereof or other variations thereof.
 These forward-looking statements contain information related to matters such
 as the Company's intent, belief, or expectation with respect to financial
 performance, claims resolution, cash availability, stock redemption plans,
 contract awards and performance, potential acquisitions and joint ventures,
 and cost-cutting measures.  Such forward-looking statements are necessarily
 based on various assumptions and estimates and are inherently subject to
 various risks and uncertainties, including risks and uncertainties relating to
 the possible invalidity of the underlying assumptions and estimates.  Because
 the accurate prediction of any future facts or conditions may be difficult and
 involve the assessment of events beyond the Company's control, actual results
 may differ materially from those expressed or implied in such forward-looking
 statements.  These forward-looking statements also are subject to Company-
 specific risks and uncertainties as set forth in the Company's Annual Report
 on Form 10-K as filed with the Securities and Exchange Commission, Item 7,
 "Management's Discussion and Analysis of Financial Condition and Results of
 Operations--Risk Factors Relating to Kaiser Holdings."  These Company-specific
 risks include dependence on the performance of Kaiser-Hill Company, LLC and
 the resolution of disputes relating to the steel mini-mill constructed in the
 Czech Republic for Nova Hut, a.s.; risks associated with regulation and
 potential liabilities and costs associated with Kaiser-Hill's contract with
 the U.S. Department of Energy and the DOE's Rocky Flats site; the absence of a
 business plan for the Company beyond Kaiser-Hill and the Nova Hut project;
 uncertainties about Kaiser's ability to obtain performance guaranties, such as
 bonds and letters of credit; uncertainties concerning the adequacy of funds to
 meet obligations given the Company's likely inability to access the capital
 markets; and uncertainties related to the implementation of the reorganization
 of Kaiser Group International, Inc., including estimates and assumptions as to
 the amount of allowed claims and the amount of cash ultimately available for
 distribution to creditors.
 
 

SOURCE Kaiser Group Holdings, Inc.
    FAIRFAX, Va., April 17 /PRNewswire/ -- Kaiser Group Holdings, Inc.
 (OTC Bulletin Board:   KSRGQ), the successor issuer to its subsidiary, Kaiser
 Group International, Inc., today announced plans for the initial distribution
 under the Kaiser Group International Second Amended Plan of Reorganization.
 As more fully described below, Kaiser Group Holdings will be distributing
 under the Plan cash and shares of its preferred and common stock.  Trading
 symbols for those securities on the over-the-counter bulletin board will be
 announced when assigned by the NASD.  The Company expects former Kaiser Group
 International, Inc.'s common stock to continue to trade for a transition
 period on the over-the-counter bulletin board under the symbol "KSRGQ."
     Kaiser Group Holdings, Inc. was formed in December 2000 in connection with
 the effectiveness, on December 18, 2000, of the Kaiser Group International,
 Inc. Second Amended Plan of Reorganization under Chapter 11 of the United
 States Bankruptcy Code.  The Plan is described in detail in the Current Report
 on Form 8-K filed with the Securities and Exchange Commission by Kaiser Group
 International on December 14, 2000 and, in less detail, in the Annual Report
 on Form 10-K filed with the SEC by Kaiser Group Holdings on April 2, 2001.
     In very general terms, the Plan contemplates different types of
 distributions to be made to three basic classes of creditors.
     Holders of so-called "Class 3" claims in the Kaiser Group International
 bankruptcy -- generally trade and similar creditors with claims of $20,000 or
 less -- will receive cash for their claims.  Such payments, aggregating
 approximately $0.9 million, will be mailed to holders of such claims on or
 about April 17.
     "Class 4", the largest class of claims in the Kaiser Group International
 bankruptcy, is made up of creditor claims other than Class 3 claims and equity
 claims.  Class 4 claims include holders of the former Kaiser Group
 International senior subordinated notes due 2003.  Holders of Class 4 claims
 are to receive a combination of cash and Kaiser Group Holdings preferred and
 common stock in respect of their claims.  Such holders will receive one share
 of preferred stock and one share of common stock for each $100 of claims.
 However, the number of shares of preferred stock to be issued will be reduced
 by one share for each $55.00 of cash received by the holder of a Class 4
 claim.  Thus, the more cash that is available for distribution, the less
 preferred stock actually will be issued.
     The process of resolving in excess of $500 million of claims initially
 filed in the Kaiser Group International bankruptcy process is ongoing.  At the
 present time, there are approximately $136.8 million of Class 4 claims that
 have been allowed in the bankruptcy process.  However, the current total
 amount of unresolved claims is approximately $130.3 million.
     The Company continues to believe that the amount of Class 4 Claims
 ultimately allowed in the Kaiser Group International bankruptcy will be
 approximately $150 million.  However, the Plan provides that cash reserves
 must be retained by Kaiser Group International with respect to unresolved
 claims.  Because of delays in, and substantial uncertainties as to the
 resolution of unresolved claims, Kaiser Group International is required by the
 terms of the Plan to hold a substantial cash reserve against these unresolved
 claims.  This factor and others, including the fact that Kaiser Group
 International has not yet received a substantial cash payment that the Company
 claims it is due from the owner of the Nova Hut steel mini-mill in the Czech
 Republic, limit the amount of cash available for distribution at this time to
 the holders of allowed Class 4 claims.  The Company has determined that an
 aggregate of approximately $12.8 million of cash, or approximately $0.09347
 per $1.00 of allowed Class 4 claims, will be distributed in the initial
 distribution to holders of allowed Class 4 claims.  Thus, more shares of
 Kaiser Group Holdings preferred stock will be issued than would have been the
 case had the claims resolution process advanced more quickly and had more cash
 been available from the Nova Hut project and other sources.
     Kaiser Group Holdings expects to make substantial progress in the
 resolution of currently unresolved claims over the balance of this calendar
 year.  The Board of Directors plans to consider, not less often than
 quarterly, the amount of cash that can be released from reserves as a result
 of claims resolution and made available to redeem preferred stock at the
 redemption price of $55.00 per share.
     The following table depicts the projected status, as of the April 17, 2001
 initial distribution date, of the initial distribution under the Plan.  This
 table updates the similar table included in the recently-filed Annual Report
 on Form 10-K with respect to the initial distribution.  For a projection of
 the effects of all distributions in the bankruptcy process, see the table
 included in Part I, Item 1 of the Annual Report on Form 10-K.
 
 
     Actual Amounts as
     of the Initial          Claim     Distribution        % of
     Distribution Date:      Amount        Amount          Total     Cash
     ($'s in thousands)                 %       $Value
 
     Amount of Allowed
     Class 3 Claims           $912    100%       $912       1%       $912
 
     Amount of Allowed
     Class 4 Claims
                          $136,863     55%    $75,275      51%      $12,793
 
     Remaining Amount of
     Unresolved Claims     130,329     55%     71,681      48%      12,183/NI/
 
     Holders of Old
     Common Stock             --                 --                     --
 
     Totals               $268,104           $147,868     100%      $25,888
 
 
 
                                              Distribution Element
 
                                    Liquidation          # of           # of
                                   Preference of      shares of      shares of
                                      of New              New           New
     Actual Amounts as of the        Preferred         Preferred      Common
     Initial Distribution Date:        Stock            Stock          Stock
     ($'s in thousands)
 
     Amount of Allowed
     Class 3 Claims                       --              --            --
 
     Amount of Allowed
     Class 4 Claims
                                     $62,482         1,136,023      1,368,632
     Remaining Amount of
     Unresolved Claims                59,498            /NI/          /NI/
 
     Holders of Old
     Common Stock                        --               --         241,563
 
     Totals                         $121,980                       1,610,195
 
 
     /NI/ Not Issued.  The Company is required to retain cash, new preferred
 stock and new common stock for all unresolved claims at the claimed amount
 until such claims are resolved. Shares of new preferred stock and new common
 stock will not be issued until claims are resolved and deemed Allowed.  Upon
 the resolution of all remaining outstanding claims, available retained cash
 balances will be used to redeem shares of outstanding new preferred stock.
 
     The third class of claims recognized in the Kaiser Group International
 bankruptcy are equity claims, consisting of holders of former Kaiser Group
 International common stock and other "Equity Interests" as defined in the
 Plan.  Apart from holders of former Kaiser Group International common stock,
 the only holders of Equity Interests of which the Company is aware are the
 former shareholders of ICT Spectrum Constructors, Inc., a corporation acquired
 by merger with a subsidiary of Kaiser Group International in 1998.  The
 Bankruptcy Court recently confirmed the equity nature of those claims, which
 will be treated as such in the initial distribution.
     Under the Plan, holders of Equity Interests will receive a number of
 shares of common stock of Kaiser Group Holdings equal to 17.65% of the number
 of shares of such common stock issued to holders of Class 4 Claims.  At this
 time, one share of Kaiser Group Holdings common stock will be issued for each
 96 shares of previously outstanding Kaiser Group International common stock.
 Under the Plan, neither fractional shares of Kaiser Group Holdings common
 stock, nor cash in lieu of fractional shares, will be issued in connection
 with the initial distribution.  Additional distributions of Kaiser Group
 Holdings common stock will be made as additional shares of common stock are
 issued to holders of newly allowed Class 4 claims.
     Holders of former Kaiser Group International common stock and holders of
 allowed Class 4 claims representing former senior subordinated notes will
 receive by mail letters of transmittal with instructions as to how to effect
 the distribution of Kaiser Group Holdings preferred and common stock.
     The exchange ratio of Kaiser Group Holdings common stock for former Kaiser
 Group International common stock (1 share for 96 shares) and the nature of the
 distribution of shares of common stock to holders of Class 4 claims will
 likely result in there being a number of holders of a relatively small number
 of shares of Kaiser Group Holdings common stock.  The ultimate value of such
 stock will likely depend primarily on the future performance of Kaiser-Hill
 Company, LLC, and it will be at least several years until such value can be
 reasonably estimated.  In the near term, the market value of Kaiser Group
 Holdings common stock will likely be low in relation to (1) the cost to the
 Company of maintaining the existence of holders of small numbers of shares of
 common stock and (2) the cost to the holder of effecting sales of a small
 number of shares.  Therefore, the letters of transmittal to be sent to holders
 of former Kaiser Group International common stock and senior subordinated
 notes will include an offer to purchase all, but not less than all, shares of
 Kaiser Group Holdings common stock distributable to persons who will receive
 99 or fewer shares in the initial distribution for a price equal to $4.50 per
 share.  This price is based generally on the trading price of Kaiser Group
 International common stock during the past 30 days, which may not bear any
 relation to the true value of such shares.  The Company makes no
 representation as to the fairness of the offer price.
     In the case of holders of former Kaiser Group International common stock,
 the offer to purchase shares is conditioned on the holder's agreement to also
 sell the holder's right to future distributions of shares of Kaiser Group
 Holdings common stock under the Plan.  The offer price for such distribution
 rights is $0.50 per share that would otherwise be distributed at this time.
 This offer price was determined arbitrarily, based primarily on the Company's
 current expectation that future distributions of shares of Kaiser Group
 Holdings common stock will be approximately 10% of the number of shares
 distributed at the present time.  Holders who wish to sell their right to
 future distributions must also sell their shares of Kaiser Group Holdings
 common stock.
     The offers referred to above are made only pursuant to, and subject to the
 conditions set forth in, the letters of transmittal referred to above.
 
     Forward-Looking Statements and Certain Factors Affecting Kaiser and Its
 Businesses
     This release contains "forward-looking statements" within the meaning of
 the Private Securities Litigation Reform Act of 1995, which are identified by
 the use of forward-looking terminology such as "may," "will," "could,"
 "should," "expect," "believe," "anticipate," "aim," "intend," "plan,"
 "estimate," or "continue" or the negative thereof or other variations thereof.
 These forward-looking statements contain information related to matters such
 as the Company's intent, belief, or expectation with respect to financial
 performance, claims resolution, cash availability, stock redemption plans,
 contract awards and performance, potential acquisitions and joint ventures,
 and cost-cutting measures.  Such forward-looking statements are necessarily
 based on various assumptions and estimates and are inherently subject to
 various risks and uncertainties, including risks and uncertainties relating to
 the possible invalidity of the underlying assumptions and estimates.  Because
 the accurate prediction of any future facts or conditions may be difficult and
 involve the assessment of events beyond the Company's control, actual results
 may differ materially from those expressed or implied in such forward-looking
 statements.  These forward-looking statements also are subject to Company-
 specific risks and uncertainties as set forth in the Company's Annual Report
 on Form 10-K as filed with the Securities and Exchange Commission, Item 7,
 "Management's Discussion and Analysis of Financial Condition and Results of
 Operations--Risk Factors Relating to Kaiser Holdings."  These Company-specific
 risks include dependence on the performance of Kaiser-Hill Company, LLC and
 the resolution of disputes relating to the steel mini-mill constructed in the
 Czech Republic for Nova Hut, a.s.; risks associated with regulation and
 potential liabilities and costs associated with Kaiser-Hill's contract with
 the U.S. Department of Energy and the DOE's Rocky Flats site; the absence of a
 business plan for the Company beyond Kaiser-Hill and the Nova Hut project;
 uncertainties about Kaiser's ability to obtain performance guaranties, such as
 bonds and letters of credit; uncertainties concerning the adequacy of funds to
 meet obligations given the Company's likely inability to access the capital
 markets; and uncertainties related to the implementation of the reorganization
 of Kaiser Group International, Inc., including estimates and assumptions as to
 the amount of allowed claims and the amount of cash ultimately available for
 distribution to creditors.
 
 SOURCE  Kaiser Group Holdings, Inc.