Asia Aluminum tender offer terminated; provisional liquidators appointed

By Caroline Salls

Pittsburgh, March 17 - Asia Aluminum Holdings Ltd. and AA Investments Co. Ltd. said the Chinese municipal government that was backing its tender offer and consent solicitation has withdrawn its support for providing access to financing for the offer, according to a news release.

As a result, the company terminated the tender offer and consent solicitation, and notes and warrants that have been tendered will be returned to the tendering holders.

In addition, Fok Hei Yu and Roderick John Sutton of Ferrier Hodgson Ltd. have been appointed as provisional liquidators of AA Investments, Asia Aluminum and Samoan wholly owned subsidiary China Steel Development Co. Ltd. by the High Court of the Hong Kong Special Administrative Region.

As previously reported, Asia Aluminum and AA Investments were soliciting consents in connection with Asia Aluminum's $450 million 8% senior notes due 2011 and AA Investments' $355 million 12% senior pay-in-kind notes due 2012, $180 million 14% senior PIK notes due 2012 and warrants.

When the offer began, the companies said they planned to use financing from an unspecified Chinese municipal government to help fund the offer and that the availability of the financing depended on the tender by holders of at least 90% of the 8% notes and all of the PIK notes by the early consent date.

The companies were soliciting consents to a one-time waiver and amendments to some provisions of the indentures that would eliminate substantially all of the restrictive covenants and many of the events of default.

The waiver would have also allowed the companies and their subsidiaries to incur debt in China and to grant liens over certain assets, to fund a substantial portion of the total payment and to provide working capital as well as release and waive any and all claims each holder may have arising from or in connection with some defaults under the indentures.

For each $1,000 principal amount of the notes, investors were scheduled to receive $275 for the 8% notes and $135 for the PIK notes.

Asia Aluminum is a Hong Kong-based company that makes aluminum extrusion and stainless steel products for the construction, transportation, industrial and home improvement sectors.

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