
                         Roanoke Times
                 Copyright (c) 1995, Landmark Communications, Inc.

DATE: FRIDAY, November 11, 1994                   TAG: 9411110077
SECTION: BUSINESS                    PAGE: A-13   EDITION: METRO 
SOURCE: The New York Times
DATELINE: DALLAS                                  LENGTH: Short

GREYHOUND CUTS STOCK DEAL, AVERTS LATEST BANKRUPTCY THREAT

Greyhound Lines Inc. avoided a second plunge into bankruptcy by agreeing Thursday to give bondholders 45 percent of the company's stock and two seats on a nine-member board.

Greyhound, the nation's only remaining coast-to-coast bus network, missed a $4.3 million bond payment that was due Sept. 30. Negotiations that began earlier in September had, in recent days, turned into an exercise in brinksmanship.

While the company refused to give bondholders control, a group of them asked a federal court to force the company into Chapter 11 bankruptcy. Greyhound stock and bond prices gyrated with every move.

Wilbur Ross Jr. of Rothschild Inc., Greyhound's financial adviser, said Thursday's agreement would give the company the resources to continue and improve its operations. Ross said he thought the bondholders' petition for involuntary bankruptcy would become moot.

``We are delighted to have a happy ending to the situation, and we're delighted this has been done without undue damage to the business or the riders or the employees,'' he said.

Greyhound, nearly overwhelmed by its losses and debts, said last month it was bringing in a new chief executive, Craig Lentzsch.

Low gasoline prices, some cheap flights and aggressive regional bus lines have reduced Greyhound riders from 7.2 million in the first half of 1993 to 6.7 million in the first half of this year.

The agreement was announced after the financial markets had closed. Greyhound closed at $2.1875 Thursday, down 6.25 cents, on the American Stock Exchange.

by CNB