Getty's Debt Troubles . . .

Stock Asylum Staff Report
Jan. 4, 2007


Without admitting that it has failed to perform any legal obligations, Getty Images announced on this date that it is soliciting waivers "of an alleged or existing default" from the holders of $265 million in debentures due in 2023.

In announcing the plan, stock photography firm also raised the possibility that it could delay filing its annual report until early spring. The waivers would specifically let the company file the annual report at any time before May 1 without defaulting.

The company is offering cash payments of $5 for each $1,000 of the aggregate principal amount, meaning that the move could cost the Getty $1.3 million if all the registered holders of the debentures accept the offer. The holders have until Jan. 17 to decide.

Getty Images filed a Form 8-K with the U. S. Securities and Exchange Commission (SEC) in November saying it had received two notices of default representing 29 percent of the outstanding .50 percent convertible subordinated debentures, Series B.

The notices were based on the company's decision to file its third quarter financial report late because of an investigation of the company's stock options practices. The SEC is conducting an "informal" investigation and the company has started its own internal probe.

Getty denies that it is required to provide timely quarterly reports under the terms of the debentures, but said it is seeking the amendment that "would provide that no notice of default delivered to Getty Images on or prior to March 2, 2007 that specifies as the basis for the default a failure to file with the SEC the Third Quarter Form 10-Q and/or the Company's Annual Report on Form 10-K for the year ended December 31, 2006, as applicable, and to file the applicable reports with the trustee under the Indenture, shall have any force or effect with respect to the exercise of remedies by the trustee or any holder of Debentures if Getty Images files the applicable reports on or prior to May 1, 2007."

Getty has retained Goldman, Sachs & Co. to act as its agent in this matter.

The Getty Images web site is at: http://www.gettyimages.com.