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Rec. USA Gets Funding for Recapitalization

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October 31, 2002 by   Leave a Comment

Holiday RV Superstores Inc., the retail store chain doing business as Recreation USA, has received a funding commitment from Affinity Group Inc. (AGI) Chairman Steve Adams for a recapitalization intended to restore the company’s compliance with Nasdaq SmallCap market listing requirements.
As of Wednesday (Oct. 30), Nasdaq had not yet responded to Holiday RV’s restructuring plan.
Under the plan, Adams, as an individual investor, will provide $2.5 million to $3.5 million in additional funding to Holiday RV. Additionally, Adams and two other investors agreed to convert certain outstanding Holiday RV debt and all of Holiday RV’s Series A and Series AA-2 preferred stock into Holiday RV common stock.
As a result of Adams’ additional investment and the debt-to-equity conversion, the number of outstanding Holiday RV common shares will increase to 16.8 million, with Adams owning about 87%.
Despite owning more than half of Holiday RV. Adams will not be directly involved in its management, said Marcus Lemonis, chairman, president and CEO. Additionally, there is no connection between AGI and Holiday RV except for Adams being chairman of AGI, Lemonis said, explaining that Adams is not an executive of Holiday RV or a member of its Board of Directors.
Members of Holiday RV’s board are listed on its website, www.recusa.com. Its board members include former Chrysler chairman and auto industry legend Lee Iacocca and former Fleetwood Enterprises Inc. executive Bill Toy.
To the extent permitted by Nasdaq rules, Adams’ investment will be made as a purchase of common stock at 62 cents a share, the closing price of Holiday RV stock on Oct. 22, the day the agreement between Adams and Holiday RV was executed.
Holiday RV stock closed at 65 cents a share Wednesday.
AGI is the parent of TL Enterprises Inc., publisher of RV Business and RVBUSINESS.COM.

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