Chile's Pampa Calichera solicits consents for 7¾% notes

By Jennifer Chiou

New York, Nov. 20 - Sociedad de Inversiones Pampa Calichera SA announced the start of a consent solicitation for its $250 million of 7¾% senior secured notes due 2022.

The company is soliciting consents to modify the covenant in the indenture relating to restricted payments and to include certain definitions related to increasing the amount required to fully fund the interest reserve account and increasing the amount of collateral pledged for the benefit of the holders.

The company said it is seeking consents from holders of a majority of the notes. It will pay a consent fee of $22.50 in cash for each $1,000 principal amount of notes.

The solicitation ends at 5 p.m. ET on Dec. 4.

The proposed amendments will increase Pampa Calichera's ability to pay dividends on its stock in cash and allow Pampa Calichera to make an extraordinary dividend payment equivalent to $48 million against existing retained earnings, a company news release said.

Pampa Calichera's controlling group has advised that, conditioned upon payment of the consent fee, it intends to carry out a recapitalization plan that would reduce the $494 million of outstanding debt of the controlling group by at least $170 million.

Of the $170 million, $70 million would be raised through capital increases of the controlling group that would be made before May 31, 2009 and $100 million would be raised through additional capital increases, the sale of assets of the controlling group or a combination of the two and would be carried out during 2009, the company said.

The controlling group intends to use the roughly $40 million portion of the extraordinary dividend payment that it is entitled to receive to pay interest and further reduce debt as part of its recapitalization plan.

Global Bondholder Services Corp. is the information and tabulation agent (866 873-6300 or call collect 212 430-3774). Deutsche Bank Securities Inc. is the solicitation agent (866 627-0391 or call collect 212 250-2955).

The Santiago, Chile-based company is a specialty chemicals and fertilizers producer.

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