Metaldyne gets written consents to permit acquisition by Asahi Tec, to start solicitation

By Jennifer Chiou

New York, Dec. 4 - Metaldyne Corp. said it received written consents from a majority of the beneficial holders of its 10% senior notes due 2014 and 11% senior subordinated notes due 2012 to allow the company to proceed with its acquisition by Asahi Tech Corp.

Subsequently, the company intends to launch a consent solicitation to allow holders to consent and receive consent payments.

Metaldyne said 10% noteholders will be paid a consent fee of $80.00 per $1,000 principal amount and 11% noteholders will receive $127.50 per $1,000 principal amount, without interest.

On Nov. 28, the company announced Asahi Tec had reached an agreement in principal with committees representing noteholders.

As already reported, the company will seek consents from holders of a majority of each series of notes to allow its acquisition by Asahi Tec and related transactions, to allow a distribution of shares of the common stock of subsidiary TriMas Corp. and to waive the change-of-control provisions and the obligation that the company offer to purchase the notes at 101% after the merger.

Other changes include making provisions for the pledge of collateral to secure the notes, provisions requiring that Metaldyne make an offer to purchase up to $25 million of senior notes at par following the merger and a requirement to reduce debt with up to $50 million of proceeds of equity issuances by Asahi Tec, which would be contributed to Metaldyne.

Metaldyne previously said it expects to pay roughly $48 million of consent fees to noteholders to obtain their consents.

The original merger agreement was modified to delete the condition that a minimum amount of Metaldyne's 10% senior subordinated notes and 11% senior subordinated notes be tendered. Funds that were to be used for a tender offer are instead being used to reduce senior bank debt.

As previously announced, the modified merger agreement requires that bondholder consents be obtained on specified terms reflecting Asahi Tec's most recent position with the noteholder committees. In addition, an intercreditor agreement among a collateral agent for noteholders and an intercreditor agent for the senior bank lenders must be entered into on terms required by the senior lenders.

The company previously said it is targeting a closing by Jan.15, but the transaction may close sooner if the conditions in the merger agreement are satisfied or waived.

Metaldyne is a Plymouth, Mich., supplier of powertrain and chassis systems and components.

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