Glencore nixes meeting to amend Viterra 6.406% notes after final offer

By Susanna Moon

Chicago, July 30 - Glencore International plc said it is rescinding its proposal to amend Viterra Inc.'s C$200 million of 6.406% senior notes due Feb. 16, 2021 after making its "best and final" offer on July 26.

The proposal was to be considered at a meeting that was moved to July 30, and that meeting has been canceled, according to a press release.

Glencore said on July 9 that it was soliciting consents to amend two series of Viterra notes in connection with its planned acquisition of all of the company's shares.

The amendments also were to provide a guarantee from each of Glencore and its main operating subsidiary, Glencore International AG, for the notes as of the effective date of the supplemental indenture.

The company needed consents from holders of at least 66 2/3% of the 6.406% notes.

On July 20 the company said it received consents for $369,055,000 principal amount, or 92.26%, of Viterra's $400 million of 5.95% senior notes due Aug. 1, 2020, enough to amend the notes.

The amendments to the 5.95% notes are conditioned on amending the 6.406% notes.

Glencore said it would notify holders whether it plans to waive the cross-condition and proceed with the amendments to the 5.95% notes.

On July 26 company offered to pay a fee of C$12.50 per C$1,000 principal amount of 6.406% notes, up from C$5.00, if the amendments to the notes were passed. Glencore said it would not pay any make-whole premium.

The increased was its "best and final" offer in the consent solicitation the 6.406% notes, according to a previous release.

Amendment details

Glencore requested that Viterra complete the acquisition asset transfers in order to facilitate the integration of Viterra following its acquisition and to allow the integrated company greater flexibility in operations, according to a prior release.

The amendments would also approve the acquisition asset transfers and align the reporting requirements under the notes with Glencore's public reporting requirements.

The primary effects of the amendments would be the following:

• Approve the change of the jurisdiction of incorporation of Viterra to Australia (planned to be the state of Victoria);

• Approve the transfer by Viterra, directly and indirectly, of up to all or substantially all of its assets and liabilities to a number of direct or indirect wholly owned subsidiaries in connection with the acquisition of Viterra by Glencore;

• Amend the financial reporting requirements under each of the indentures so that Viterra may provide only those financial statements that Viterra is required to file on Sedar;

• Modify the provisions of the existing negative pledge of Viterra under each of the indentures to make them consistent with the provisions of the negative pledge to which each of Glencore and Glencore International is subject in connection with Glencore's euro medium-term note program;

• Eliminate in the indenture of the 6.406% notes restrictions on related party transactions; and

• Provide for certain consequential amendments.

Morgan Stanley & Co. LLC (800 624-1808 or 212 761-1057, attn.: liability management) is the solicitation agent for the 5.95% notes. The information and tabulation agent for those notes is Global Bondholder Services Corp. (attn: corporate actions, 866 612-1500, banks and brokers call 212 430-3774, fax 212 430-3775/3779 and confirmation 212 430-3774).

TD Securities Inc. (416 982-2243) is the solicitation agent for the 6.406% notes. The information and tabulation agent for those notes is Canadian Stock Transfer Co. Inc. (800 387-0825, 416 682-3860 or fax 514 985-8853).

Based in Baar, Switzerland, Glencore is a supplier of commodities and raw materials to industrial consumers. Viterra provides premium quality ingredients to leading global food manufacturers and is based in Regina, Sask.

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