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The investors who bought Fair Lanes Inc. in a 1989 leveraged buyout yesterday proposed swapping 90 percent of the company's stock in exchange for slashing $138 million in debt to $75 million.

"We need lower interest payments," said Mac Clayton, the company's chairman and chief executive. He said that the company planned to skip Feb. 15 interest payments of about $10 million while it attempts to work out a deal with the holders of the company's debt, to whom Mr. Clayton presented the plan in New York yesterday.

The Hunt Valley-based company owns about 20 bowling centers in metropolitan Baltimore and more than 100 bowling alleys and other entertainment centers around the nation, Mr. Clayton said.

"We're very profitable" on an operating basis, Mr. Clayton said. But the company does not make enough operating profits to cover interest on the $138 million debt, which carries an interest rate of 11.875 percent, plus another $45 million owed by Fair Lanes Entertainment Inc., the holding company Mr. Clayton and other investors formed to buy the company from Northern Pacific Corp. for $195 million. Fair Lanes will also discontinue the dividend that allows Fair Lanes Entertainment to service its debt, he said.

The move to restructure the company comes less than a year after Standard & Poor's Corp. moved last March to downgrade its rating of the company's bonds. At the time, Mr. Clayton said Fair Lanes was "not in trouble and not about to be in trouble." Yesterday, he was still relatively optimistic.

He said part of the short-term problem was caused by the company's effort to upgrade the appearance of and the service at its bowling alleys, which disrupted the operation of some centers.

"It's working, but we've just got too much debt," he said. "Inevitably, you create short-term disruption in your business [during renovations]. Our sales have slowed down. . . . That has slowed down our cash flow."

He emphasized that the $6 million the company is holding in deposits for prizes and awards sponsored by bowling leagues that patronize Fair Lanes is not affected by the talks, which he expects to last as long as several months. The prize money is segregated from the company's own funds and is secure, he said.

Bondholder reaction could not immediately be gauged because the identity of the holders is not public. Mr. Clayton declined to say who owns the bonds.

The restructuring proposal should not cause any changes noticeable to bowling customers, Mr. Clayton said.

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