General Shopping Brasil waives minimum, extends withdrawal deadline in swap offer for 12% perpetuals

By Wendy Van Sickle

Columbus, Ohio, July 25 – General Shopping Brasil SA announced changes, including waiving the minimum tender condition, to subsidiary General Shopping Investments Ltd.’s private exchange offer for its $150 million principal amount of 12% perpetual subordinated fixed-to-floating notes with interest deferral option.

As announced July 6, the issuer is offering to swap out the 12% perpetuals with newly issued dollar-denominated 10%/12% senior secured pay-in-kind toggle notes due 2026.

Initially, the company said the exchange would be conditioned upon more than 80% of the outstanding principal amount of existing notes being tendered for exchange, but that condition has been waived, according to a Monday press release.

The company also extended the deadlines for holders to withdraw their validly tendered notes to 11:59 p.m. on Aug. 1, which is also the expiration of the exchange offer.

Previously, tendered notes could no longer be withdrawn as of 5 p.m. ET on July 18, which was the original early deadline.

On July 6, General Shopping extended the early tender deadline to coincide with the offer expiration and increased the exchange compensation, as previously reported.

At that time, General Shopping also raised the maximum issue amount to $39 million from $30 million in the exchange.

The total exchange value is now $260 principal amount of new notes and one Global Depositary Share, each GDS representing 73 common shares of the company, for each $1,000 principal amount of notes tendered for exchange.

The exchange amount was previously lifted from $200 principal amount of new notes and one GDS, each GDS representing 55 common shares of the company, per $1,000 of notes exchanged.

Originally, those who tendered after 5 p.m. ET on July 18 would have received the exchange amount of $190 principal amount of new notes and one GDS per $1,000 principal amount.

Settlement is expected to occur on Aug. 10.

The issuer will not pay accrued interest.

Notes must be tendered in minimum denominations of $2,000 and integral multiples of $1,000 after that. However, the aggregate principal amount of new notes issued to each holder in exchange for tendered notes will be rounded down if needed to $2,000 or the nearest whole multiple of $1,000 after that. This rounded down amount will be the principal amount of new notes that holders will receive, and no additional cash will be paid in lieu of new notes. Similarly, the number of GDSs issued may be rounded down to the nearest whole share, and no additional cash will be paid in lieu of any fractions.

As a result of the terms, holders are required to tender a minimum principal amount of $8,000 of notes in order to receive the exchange amount.

The offer is being made only to qualified institutional buyers under Rule 144A or non-U.S. persons under Regulation S.

The new notes will be guaranteed by General Shopping Brasil and by Levian Participacoes e Empreendimentos Ltda. and Vul Administradora e Incorporadora Ltda. as well as by GDSs, each GDS representing 55 common shares of the company.

The new notes will be secured by a second ranking mortgage over part of the interest of Vul Administradora e Incorporadora Ltda. in the real estate registered with the second real estate, titles and deeds and corporate registry office of Guarulhos. The new notes will be senior to the existing notes, which are unsecured subordinated obligations, and to all existing and future unsecured debt to the extent of the value of the collateral securing the new notes.

Banco Bradesco BBI SA, HSBC Securities (USA) Inc., Itau BBA USA Securities, Inc., BofA Merrill Lynch and Santander Investment Securities Inc. are the dealer managers. D.F. King & Co., Inc. (866 620-2538, 212 269-5550 or e-mail gs@dfking.com) is the information and exchange agent.

General Shopping is based in Sao Paulo and operates shopping malls.

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