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EXHIBIT 99.5
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FLEETWOOD ENTERPRISES, INC.
FLEETWOOD CAPITAL TRUST II
EXCHANGE OFFER OF
9.75% CONVERTIBLE TRUST PREFERRED SECURITIES DUE 2013 OF FLEETWOOD CAPITAL
TRUST II,
WHICH WILL BE REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, PRIOR TO
CLOSING,
FOR UP TO $86.25 MILLION IN AGGREGATE LIQUIDATION AMOUNT OF THE
6% CONVERTIBLE TRUST PREFERRED SECURITIES DUE 2028 OF FLEETWOOD CAPITAL TRUST
AND CASH OFFER OF
9.75% CONVERTIBLE TRUST PREFERRED SECURITIES DUE 2013 OF FLEETWOOD CAPITAL
TRUST II
December 5, 2001
To Holders of Fleetwood Capital Trust
6% Convertible Trust Preferred Securities Due 2028 and
The Depository Trust Company:
We are offering to exchange (the "Exchange Offer") an aggregate liquidation
amount of Fleetwood Capital Trust II's 9.75% Convertible Trust Preferred
Securities due 2013 (the "Exchange Preferred Securities") for up to
$86.25 million in aggregate liquidation amount of 6% Convertible Trust Preferred
Securities due 2028 (CUSIP No. 339072407) (the "Existing Preferred Securities")
of Fleetwood Capital Trust held by the registered holders thereof (the
"Holders").
In conjunction with the Exchange Offer, we are also offering investors the
right to purchase up to an aggregate of $50.0 million in liquidation amount of
additional Exchange Preferred Securities (the "Cash Offer"). If we consummate
the Exchange Offer, we intend to use a portion of the proceeds from the Cash
Offer to pay the taxes we expect to incur as a result of the cancellation of the
existing debentures that support the existing preferred securities tendered and
accepted for exchange in the Exchange Offer. We will also use a portion of the
proceeds to pay the fees and expenses incurred in connection with the Exchange
Offer and the Cash Offer. We will use the remainder of the proceeds from the
Cash Offer for general corporate purposes, including the possible repayment of
corporate indebtedness.
In the event that the conditions to the Exchange Offer are not satisfied or
we do not otherwise consummate the Exchange Offer, we nonetheless intend to
consummate the Cash Offer and will use all proceeds received in the Cash Offer,
after payment of fees and expenses, for general corporate purposes, including
the possible repayment of corporate indebtedness. The effect of the Exchange
Offer on our cash flow will be positive, which is a condition to the Exchange
Offer. If we raise more than the minimum amount, or if we do not consummate the
Exchange Offer but we do consummate the Cash Offer, the effect on our cash flow
will be negative. However, in any of the circumstances described in the two
previous sentences, we anticipate that the effect of either or both of the
Exchange Offer or the Cash Offer on our balance sheet will be to provide us with
greater flexibility in executing our strategic plan and exploring financing
opportunities in the future, by enhancing liquidity and increasing our capacity
to carry senior debt.
The purpose of this letter is to call your attention to certain important
information regarding the Exchange Offer. THE EXCHANGE OFFER EXPIRES AT
5:00 P.M., NEW YORK CITY TIME, ON JANUARY 4, 2002, UNLESS WE EXTEND THE OFFER.
You can choose to exchange your Existing Preferred Securities for Exchange
Preferred Securities. Holders who participate in the Exchange Offer will receive
$20 in liquidation amount of Exchange Preferred Securities for each $50 in
liquidation amount of their Existing Preferred Securities but will not receive
any payment in respect of accrued but unpaid interest on the Existing Preferred
Securities through the date of consummation of the Exchange Offer.
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In consideration for Fleetwood Capital Trust II issuing the Exchange
Preferred Securities, we will issue 9.75% convertible subordinated debentures
due 2013 (the "Exchange Debentures") to Fleetwood Capital Trust II. Unless we
have earlier redeemed the Exchange Debentures, the Exchange Preferred Securities
will be convertible into our common stock at the option of each holder at any
time prior to maturity. Each $1,000 in liquidation amount of Exchange Preferred
Securities will be convertible into shares of our common stock at a rate that is
to be determined pursuant to the conversion price formula set forth on page 8 of
the Prospectus. In comparison, the Existing Preferred Securities are currently
convertible into our common stock at the rate of 20.53 shares per $1,000 in
liquidation amount of Existing Preferred Securities.
You should be aware, in considering the Exchange Offer, that up to
$84.5 million in liquidation amount of Exchange Preferred Securities will be
issued in the Exchange Offer and Cash Offer. As described in the preliminary
prospectus dated December 5, 2001 (the "Prospectus"), the Exchange Preferred
Securities will rank senior in right of payment to any Existing Preferred
Securities that remain outstanding after completion of the Exchange Offer. If we
default on the Existing Preferred Securities, we will be prohibited from making
any payments on the Existing Preferred Securities until all of the Exchange
Preferred Securities have been paid in full. The terms of the Exchange Preferred
Securities are described in more detail in the Prospectus under the section
titled "Description of Preferred Securities--Description of the Exchange
Preferred Securities," beginning on page 83 of the Prospectus.
As you may know, we have been impacted by excess capacity, high retail
inventories and a slowing of retail sales caused by restrictive financing
conditions. These forces have resulted in a softening of demand, which has led
to a decrease in our sales. A number of our competitors also appear to be
experiencing similar difficulties. As a result, our Board of Directors has
determined that, in order to withstand this difficult environment, we need to
reduce our debt obligations, which will enhance our balance sheet. Accordingly,
we are making the Exchange Offer and Cash Offer as an integral part of a larger
program to reduce our debt obligations. Further, we have also entered into a new
senior secured facility funded by a syndicate of banks led by Bank of America.
If you want to participate in the Exchange Offer, you must make the
necessary arrangements promptly. In particular, if your Existing Preferred
Securities are held through a broker, dealer, bank, trust company or other
nominee, you will need to instruct that firm to tender the Existing Preferred
Securities on your behalf. Since this procedure may take a considerable amount
of time, you should give these instructions as soon as possible.
The terms of the Exchange Offer and Cash Offer are contained in our
Prospectus, which accompanies this letter. The Exchange Offer is subject to
certain conditions, including among others:
- an aggregate liquidation amount of a minimum of $50.0 million of Existing
Preferred Securities being tendered into the Exchange Offer and not
withdrawn;
- the receipt of proceeds in the sale of Exchange Preferred Securities being
purchased in our Cash Offer, in an amount equal to at least 31% of the
aggregate liquidation amount of Exchange Preferred Securities subscribed
for in the Exchange Offer; and
- our registration statement and any post-effective amendment to the
registration statement covering the Exchange Preferred Securities being
declared effective under the Securities Act of 1933, as amended.
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If you need assistance making arrangements to tender your securities, please
call the Information Agent for the Exchange Offer, D.F. King & Co., Inc.,
toll-free at (800) 290-6428. If you have any questions about the Exchange Offer,
please call the exclusive Dealer Manager for the offer, Banc of America
Securities LLC, at (212) 583-8206, Attention: Howard Needle. We appreciate your
consideration of our Exchange Offer.
Sincerely,
/S/ GLENN F. KUMMER
Glenn F. Kummer
Chairman of the Board
We have filed a Registration Statement, as amended, with the Securities and
Exchange Commission (the "SEC") on Form S-4/S-3 registering the Exchange
Preferred Securities, the 9.75% Exchange Debentures due 2013, the related
guarantees and the underlying shares of common stock to be offered in the
Exchange Offer. The Registration Statement and the Prospectus contain important
information about us, the Exchange Offer, the Cash Offer and related matters.
Security holders are urged to read the Registration Statement and the
accompanying Prospectus, the related Schedule TO-I and any other relevant
documents filed by us with the SEC.
The Registration Statement has not yet become effective. The Exchange
Preferred Securities may not be sold and, although you may tender your Existing
Preferred Securities, tenders may not be accepted prior to the time the
Registration Statement becomes effective. This communication shall not
constitute an offer to sell or an offer to buy nor shall there be any sale of
the Exchange Preferred Securities in any state in which such offer, solicitation
or sale would be unlawful.
Security holders are able to obtain copies of the Registration Statement on
Form S-4/S-3 and the accompanying Prospectus, the Schedule TO-I and any other
relevant documents at no cost to them through the website maintained by the SEC
at HTTP://WWW.SEC.GOV. In addition, these documents are available free of charge
to you by contacting the Information Agent for the offer, D.F. King &
Co., Inc., toll-free at (800) 290-6428.
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