HEAD subsidiary again extends exchange offer, consent bid on 8½% notes

By Susanna Moon

Chicago, July 6 - HEAD NV said its subsidiary, HTM Sport- und Freizeitgeräte AG, once more postponed the early tender date as well as the deadline in the private exchange offer and consent solicitation for its €135 million of 8½ senior notes due 2014.

The early tender time and exchange deadline now both are noon ET on July 31, extended from July 3. The deadlines were previously at noon ET on June 19 and, before that, June 5, May 22 and May 11.

As a result, the settlement date will be postponed to Aug. 6 from July 9.

As of noon ET on July 3, investors had tendered €6.6 million principal amount of the notes, unchanged from June 18 and June 4.

The company is offering €350 principal amount of new 10% senior secured notes due 2014 for each €1,000 principal amount of existing notes.

HTM will also pay accrued interest up to but excluding the settlement date.

The new notes will be issued by HTM and guaranteed by HEAD, HEAD Holding Unternehmensbeteiligung GmbH and some of HTM's subsidiaries. They will be secured by pledges or charges over some inventories and trade receivables of HTM and some of its subsidiaries and, under certain circumstances, cash.

An application will be made to list the new notes on the Euro MTF Market of the Luxembourg Stock Exchange.

HTM is also soliciting consents to proposed amendments to the indenture governing the notes that will eliminate substantially all of the covenants governing the actions of the issuer and its restricted subsidiaries, eliminate or modify some events of default and modify Mares SpA's guarantee of the 8½% notes.

Holders who tender will be deemed to have given consent.

The company needs consents from holders of at least a majority of the outstanding notes in order to amend the indenture.

The private offer is being made only to "qualified institutional buyers" within the United States, as defined in Rule 144A under the Securities Act, and to persons located outside of the United States and who would be participating in any transaction in accordance with Regulation S.

HEAD already said the purpose of the exchange offer is to reduce HTM's overall debt and related interest expense and to offer existing noteholders the opportunity to be secured creditors of HTM.

The company previously said that it expects revenues for the first quarter will have declined by more than 10% and that its 2009 revenues will be lower than its 2008 revenues.

HEAD said that such a decline, combined with the large cash costs of its interest expense, its capital expenditures and having begun 2009 with less cash than at the same period in 2008, will result in it having to manage its working capital more aggressively.

To the extent that these actions are insufficient to fund working capital requirements, the company could be required to generate additional cash or secure additional credit facilities.

Lucid Issuer Services Ltd. (+44 20 7704 0880) is the exchange and information agent for the offer.

HEAD is an Amsterdam-based manufacturer and marketer of premium sports equipment.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.