SÃO PAULO, June 24, 2020 /PRNewswire/ -- InterCement Financial Operations B.V. (the "Issuer"), a wholly-owned subsidiary of InterCement Participações S.A. (the "Company" or "our"), announced today that it has commenced a private exchange offer (the "Exchange Offer") for any and all of its 5.750% Senior Notes due 2024 (the "Existing Notes") for its newly issued 7.000%/8.500% Senior Secured PIK Toggle Notes due 2027 (the "New Notes").
The primary purpose of the Exchange Offer and Consent Solicitation (as defined below) is to provide the Company with the necessary flexibility to overcome the current economic downturn, achieve our overall objectives and to improve our capital structure and liquidity position by extending the maturity profile of the Existing Notes.
The Exchange Offer and the Consent Solicitation are being made pursuant to an Exchange Offer Memorandum and Consent Solicitation Statement, dated June 24, 2020 (the "Exchange Offer Memorandum"), which sets forth a more detailed description of the terms and conditions of the Exchange Offer and the Consent Solicitation.
The New Notes will be issued by the Issuer and guaranteed by the Company and InterCement Brasil S.A. ("InterCement Brasil"). The New Notes will mature on July 15, 2027. Interest on the New Notes will be payable semi-annually in arrears on January 15 and July 15 of each year, commencing on January 15, 2021. The Issuer or the Company may elect to pay interest on the New Notes (1) entirely in cash, at a rate per annum of 7.000% or (2) with respect to payments of interest due on any interest payment date that occurs on or prior to January 15, 2022, by increasing the principal amount of the New Notes outstanding or, with respect to New Notes represented by certificated notes, issuing additional New Notes for the remaining amount of the interest payment, at a rate per annum equal to 8.500%.
Eligible Holders (as defined below) who validly tender their Existing Notes and deliver their consents on or prior to 5:00 p.m., New York City time, on July 8, 2020, unless extended (the "Early Expiration Deadline"), will receive U.S.$850.00 in principal amount of New Notes for each U.S.$1,000 in principal amount of Existing Notes accepted for exchange. Eligible Holders who validly tender their Existing Notes on or prior to 11:59 p.m., New York City time, on July 22, 2020, unless extended (the "Expiration Deadline"), but after the Early Expiration Deadline, will receive U.S.$800.00 in principal amount of New Notes for each U.S.$1,000 in principal amount of Existing Notes accepted for exchange. In each case, Eligible Holders who validly tender their Existing Notes that are accepted for exchange will also receive accrued and unpaid interest on such Existing Notes to, but excluding, the applicable Settlement Date (as defined below), which will be added to the principal amount of the New Notes. The amount of New Notes to be issued to any holder will be issued in minimum denominations of U.S.$1.00 and integral multiples of U.S.$1.00 above such amount and will be rounded down to the nearest U.S.$1.00.
Concurrently with the Exchange Offer, the Company is soliciting consents (the "Consent Solicitation" and, together with the Exchange Offer, the "Exchange Offer and Consent Solicitation") from the Eligible Holders of the Existing Notes to certain proposed amendments to the indenture governing the Existing Notes (the "Existing Notes Indenture"), which would eliminate substantially all of the restrictive covenants and certain events of default and related provisions under such indenture (the "Proposed Amendments").
The tender of the Existing Notes into the Exchange Offer, will also be considered a Consent to the Proposed Amendments with respect to those tendered Existing Notes. In addition to the foregoing, delivery of a Consent will constitute an express waiver with respect to all claims against the issuer and the guarantors under the Existing Notes Indenture of any breach that may otherwise arise under the Existing Notes Indenture.
Tendered Existing Notes may not be withdrawn and consents may not be revoked subsequent to the time of execution and delivery of the supplemental indenture containing the Proposed Amendments to the Existing Notes Indenture (the "Effective Time"), except as required by applicable law. Prior to such time, if a holder withdraws its tendered Existing Notes, such holder will be deemed to have revoked its consents and may not deliver consents without re-tendering its Existing Notes. The Effective Time will not occur prior to the Early Expiration Deadline.
The consummation of the Exchange Offer and Consent Solicitation is conditioned upon the valid tender, without subsequent withdrawal, of at least 85% of the aggregate principal amount of the outstanding Existing Notes (the "Minimum Participation Condition"). The consummation of the Exchange Offer and Consent Solicitation is also subject to the satisfaction or waiver of certain other conditions.
The Issuer reserves the right, in its sole and absolute discretion and subject to applicable law, regardless of whether the conditions for the Exchange Offer and Consent Solicitation are satisfied, at any time and from time to time to (1) extend the Early Expiration Deadline or the Expiration Deadline and retain all tendered Existing Notes; (2) terminate or withdraw the Exchange Offer and Consent Solicitation; (3) waive or modify any and all conditions to the Exchange Offer and Consent Solicitation, including the Minimum Participation Condition, without extending the Early Expiration Deadline or Expiration Deadline or otherwise reinstating withdrawal or revocation rights, except as required by applicable law; and (4) otherwise modify the terms of the Exchange Offer and Consent Solicitation in any respect.
Subject to satisfaction of the conditions to the Exchange Offer and Consent Solicitation, the Issuer expects to accept for exchange any Existing Notes validly tendered and not validly withdrawn at or prior to the Early Expiration Deadline on a date promptly following the Early Expiration Deadline (the "Early Settlement Date"). In addition, the Issuer expects to accept for exchange any remaining Existing Notes that have been validly tendered and not validly withdrawn by the Expiration Deadline on a date promptly following the Expiration Deadline (the "Final Settlement Date" and, each of the Early Settlement Date and Final Settlement Date, a "Settlement Date").
The New Notes and the guarantees will be secured over certain cement facilities of InterCement Brasil upon terms described in the Exchange Offer Memorandum.
The Exchange Offer and Consent Solicitation (as defined below) is being made, and the New Notes are being offered and will be issued, only (a) in the United States to holders of Existing Notes who are "qualified institutional buyers" (as defined in Rule 144A under the Securities Act of 1933, as amended (the "Securities Act")) and (b) outside the United States to holders of Existing Notes who are persons other than U.S. persons in reliance upon Regulation S under the Securities Act; provided that, in each case, (i) if such holder is in the European Economic Area or the United Kingdom, such holder (i) is a "qualified investor" within the meaning of Article 2(e) of the Prospectus Regulation (Regulation (EU) 2017/1129) and (ii) is not a retail investor (as defined below). The holders of Existing Notes who have certified to the Company that they are eligible to participate in the Exchange Offer and Consent Solicitation pursuant to at least one of the foregoing conditions are referred to as "Eligible Holders." Only Eligible Holders are authorized to receive or review the Exchange Offer Memorandum and to participate in the Exchange Offer and the Consent Solicitation. As used above, the expression "retail investor" means a person who is one (or more) of the following: (a) a retail client as defined in point (11) of Article 4(1) of MiFID II; (b) a customer within the meaning of the Insurance Distribution Directive, where that customer would not qualify as a professional client as defined in point (10) of Article 4(1) of MiFID II; or (c) not a qualified investor as defined in Article 2(e) the Prospectus Regulation (Regulation (EU) 2017/1129).
The New Notes have not been registered under the Securities Act or any state securities laws. Accordingly, the New Notes will be subject to restrictions on transferability and resale and may not be transferred or resold except as permitted under the Securities Act and other applicable securities laws, pursuant to registration or exemption therefrom.
This press release is neither an offer to sell nor the solicitation of an offer to buy any security. This press release is also not a solicitation of any consent to the proposed amendments to the Existing Notes Indenture. The Exchange Offer and Consent Solicitation is being made solely pursuant to the Exchange Offer Memorandum. No recommendation is made as to whether the holders of Existing Notes should tender their Existing Notes for exchange and deliver their consents in the Exchange Offer and Consent Solicitation.
D.F. King & Co., Inc. has been appointed as the information agent and the exchange agent for the Exchange Offer and Consent Solicitation. Holders may contact the information agent to request the eligibility letter at (212) 269-5550 or toll free at (800) 370-1749. The website for the Exchange Offer and Consent Solicitation is www.dfking.com/intercement.
Morgan Stanley & Co. LLC, BB Securities Limited, Banco Bradesco BBI S.A. and Itau BBA USA Securities, Inc. have been engaged to act as dealer managers and solicitation agents in connection with the Exchange Offer and Consent Solicitation. Questions regarding the Exchange Offer and Consent Solicitation may be directed to Morgan Stanley & Co. LLC at +1 (800) 624-1808 (toll free) or +1 (212) 761-1057 (collect), BB Securities Limited at +44 (20) 7367-5800, Banco Bradesco BBI S.A. at +1 (347) 703-8159 and Itau BBA Securities LLC +1 (212) 710-6781/6799.
NOTICE REGARDING FORWARD-LOOKING STATEMENTS
This press release contains statements that are forward-looking within the meaning of Section 27A of the U.S. Securities Act of 1933, as amended, and Section 21E of the U.S. Securities Exchange Act of 1934, as amended. Forward-looking statements are only predictions and are not guarantees of future performance. Investors are cautioned that any such forward-looking statements are and will be, as the case may be, subject to many risks, uncertainties and factors relating to the Company that may cause the actual results to be materially different from any future results expressed or implied in such forward-looking statements. Although the Company believes that the expectations and assumptions reflected in the forward-looking statements are reasonable based on information currently available to the Company's management, the Company cannot guarantee future results or events. The Company expressly disclaims a duty to update any of the forward-looking statements.
SOURCE InterCement Financial Operations B.V.
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InterCement Financial Operations BV Announces Exchange Offer And Consent Solicitation For Any And All Of Its 5.750% Senior Notes Due 2024 - PRNewswire
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