Grupo Kaltex starts tender offer for all 8 7/8% notes due 2022

By Mary-Katherine Stinson

Lexington, Ky., Nov. 1 – Grupo Kaltex SA de CV announced a cash tender offer and a consent solicitation for any and all of its outstanding $220 million 8 7/8% senior notes due 2022 (Cusips: 40054FAA5, P4953VAJ2), according to a press release.

The company is offering noteholders who tender by early tender deadline of 5 p.m. ET on Nov. 15 a cash payment of $970 plus a $30 early tender premium for a total payment of $1,000 per $1,000 principal.

Accrued and unpaid interest will be paid to the related settlement date. The company will also pay additional interest so that the amount after the withholding tax will be equal to the amount due had there been no withholding tax.

The withdrawal deadline is also 5 p.m. ET on Nov. 15.

The early settlement date is expected to be Nov. 17.

The cash tender offer expires at 11:59 p.m. ET on Nov. 30.

Final settlement is expected for Dec. 2.

The company is also soliciting consents from the noteholders for the adoption of proposed amendments to the indenture governing the notes which would, among other things, eliminate substantially all of the restrictive covenants, as well as various events of default and related provisions contained in the indenture and release the collateral securing the notes.

Noteholders who tender their notes must also consent to the proposed amendments and vice versa.

The tender offer and consent solicitation are conditioned on the satisfaction of or waiver of the following conditions: noteholders tendering at least 75% of the principal of the outstanding notes; execution of the supplemental indenture; and a new offering of senior notes at or prior to the settlement date.

The offering of new notes is not conditioned on the completion of the tender offer.

The company intends to use the proceeds of the new notes to pay for the tender offer and consent solicitation and the related fees and expenses.

Following the conclusion of the offer, the company has said it does not plan to use any of the net proceeds to redeem any of the notes that remain outstanding although they may be repurchased on the open market at a later time.

BCP Securities, LLC (203 629-2186, jharper@bcpsecurities.com) and Morgan Stanley & Co. LLC (800 624-1808, 212 761-1057) are the dealer managers and solicitation agents.

D.F. King & Co., Inc. (212 269-5550, 800 848-3405, 212 232-3233, kaltex@dfking.com) is the information agent and tender agent.

Grupo Kaltex is a textile company based in Mexico.

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