Merrill Corp. completes recapitalization; all 12% '09 notes exchanged or redeemed

Merrill Corp. (Caa3/D) said on Thursday (Aug. 15) that it had completed its previously announced recapitalization, with all of its outstanding 12% senior subordinated notes due 2009 having been exchanged or redeemed for newly issued Class A and Class B senior subordinated notes due 2009 and Series A warrants, as previously outlined. As part of the recapitalization, Merrill's largest shareholder, DLJ Merchant Banking Partners II, LP, invested an additional $18.5 million in Merrill through the purchase of 13% senior discount notes due 2008. The company's existing senior discount noteholders and senior preferred shareholders have also agreed to amend certain rights in their securities as part of the recapitalization. Merrill also said that as part of the recapitalization, all defaults under its senior credit facilities have been completely waived or cured, and certain financial covenants have been reset and other terms of the senior credit facilities have been modified.

AS PREVIOUSLY ANNOUNCED, Merrill Corp., a St. Paul, Minn.-based diversified communications and document services company, said on June 3 that it had reached an agreement on a proposed recapitalization plan that would waive or cure existing defaults under its senior credit facilities as well as the outstanding notes, and which would inject additional capital into the company. Merrill said that under the proposed plan, its largest shareholder, DLJ Merchant Banking Partners II, LP, would invest $18.5 million in Merrill upon the final effectiveness of an amendment to the senior credit facility and the successful exchange and amendment of Merrill's outstanding senior subordinated notes and senior preferred shares. The company's senior lenders agreed not to exercise their rights and remedies under the senior credit facility as a result of previously disclosed defaults until at least Aug. 14, giving Merrill time to complete the recapitalization plan.

It said that holders of approximately 77% of the outstanding 12% notes and of 100% of Merrill's senior discount notes due 2008, and its senior preferred shares entered into a lockup agreement with Merrill in support of this proposed recapitalization, subject to certain terms and conditions. Merrill said that it planned to launch an exchange offer and consent solicitation for the senior subordinated notes, the senior discount notes and senior preferred shares within the next 30 days, in order to complete the plan. It said that the financial advisor for the senior subordinated noteholders was Chanin Capital Partners.

On July 8, Merrill said that it had begun an offer to exchange new senior subordinated notes, cash and warrants for any and all of its outstanding 12% notes, as part of the previously announced recapitalization plan. Under terms of the offer, holders of the existing 12% notes that participate in the exchange offer would receive new Class A senior subordinated notes due 2009, new Class B senior subordinated notes due 2009, and new Series A warrants (each warrant would entitle its holder to purchase one share of Class B common stock of Merrill Corp). The company said that it would give the holders of the existing notes who validly tender them and who do not subsequently withdraw them by the offer expiration deadline at 5 p.m. ET on Aug. 1 the following compensation per $1,000 principal amount of the existing 12% notes tendered: 1) $60.00 in cash; 2) $185.19 aggregate principal amount of the new Class A notes; 3) $814.81 aggregate principal amount of the new Class B notes; 4) an additional principal amount of Class B notes in lieu of payment of certain overdue interest payments on the exchanged outstanding 12% notes; and 5) 1.82 Series A warrants. The company further said that certain overdue and accrued interest on the exchanged existing 12% notes would be paid to holders of the new notes through a special payment on Dec. 31. It added that holders tendering their existing notes would be required to give their consent to certain proposed amendments to the terms of the old notes' indenture.

On Aug. 2, Merrill Corp. said that holders of its outstanding 12% notes had tendered 97.77% of their outstanding notes under the exchange offer that expired as scheduled at 5 p.m. ET on Aug. 1, without extension. Merrill also said that it had obtained consents from the holders of the notes to amend the existing indenture governing those notes not tendered. The company further said that the issuance of the Class A and B 2009 notes and the warrants for which the existing bonds were exchanged, together with consummation of each of the other elements of its previously announced restructuring (of which the exchange offer was a component) would likely take place on Friday (Aug. 9) . The information agent for the exchange offer was D. F. King & Co., Inc. (call 800 848-3409).

Claxson again extends exchange offer for Imagen 11% '05 notes

Claxson Interactive Group Inc. said on Thursday (Aug. 15) that it had again extended its previously announced offer to exchange new debt for the existing 11% senior notes due 2005 of its Imagen Satelital SA subsidiary, as well as the related solicitation of noteholder consents to proposed indenture changes. The offer was extended to 5 p.m. ET on Aug. 28, subject to possible further extension, from the previous deadline of Aug. 14. The consent solicitation deadline was also extended to coincide with the offer expiration. As of 5 p.m. ET on Aug. 14, Claxson had received tenders from holders of approximately $8.1 million principal amount of the outstanding Imagen existing notes, up from the $7.7 million of the notes which had been tendered by the previous deadline of July 31.

AS PREVIOUSLY ANNOUNCED, Claxson, a Buenos Aires, Argentina-based multimedia company providing branded Spanish- and Portugese-language entertainment content, said on June 28 that it had begun an exchange offer and related consent solicitation for all $80 million of Imagen's 11% notes, under which it would offer $410 of its new 7.25% senior notes due 2010 per $1,000 principal amount of the existing Imagen notes. Claxson also said that it was soliciting proxies from holders of the existing notes to vote in favor of the proposed amendments to the notes' indenture, and was offering a consent payment equal to $10 per $1,000 principal amount to holders of the existing notes tendering them by the original consent payment deadline of 5 p.m. ET on July 18, although this was subsequently extended. Claxson initially set 5 p.m. ET on July 31 as the exchange offer expiration deadline, although this also was subsequently extended. It said the exchange offer would be conditioned upon the receipt of tenders of at least 95% of the outstanding principal amount of the existing Imagen notes, as well as the approval by the Argentine government Comision de Valores of the public offering of the newly issued notes in Argentina, as well as other customary conditions.

Claxson said that the new notes will not be registered for unlimited public trading under the U.S. Securities Act of 1933, as amended, and will only be offered in the U.S. to qualified institutional buyers and accredited investors in private transactions and to persons outside the Unites States in off-shore transactions, as defined by the Act. The new notes will be listed on the Buenos Aires Stock Exchange.

On Aug. 1, Claxson Interactive Group said it was extending the exchange offer and consent solicitation for the Imagen 11% notes to 5 p.m. ET on Aug. 14, subject to possible further extension, from the original July 31 deadline. As of 5 p.m. ET on July 31, Claxson had received tenders from the holders of approximately $7.7 million of the outstanding existing notes. Claxson also said that it continues to solicit proxies in favor of proposed indenture changes from the holders of the existing notes, extending the consent payment expiration date to 5:00 p.m. New York City time on Aug. 14, 2002, subject to possible further extension, from the original July 18 consent deadline; the extended consent deadline would thus coincide with the actual expiration of the tender offer itself. It said that holders who have already tendered their existing notes, or those who tender them by the extended Aug. 14 deadline and who do not withdraw their tenders, would be entitled to receive the consent payment.

Claxson said it was in active discussions with the holders of the existing notes who had not yet tendered, with the goal of obtaining full participation. It further said that except for the extension of the expiration date and consent payment expiration date, all other terms and provisions of the exchange offer remained the same. D.F. King & Co.(contact Tom Long at 212 493-6920 is the information agent for the exchange. Banco Rio de la Plata (contact Eduardo Rodriguez Sapey at 011 5411 4341 1013 in Buenos Aires) is the Argentina Trustee and Rep. Exchange Agent.

Doe Run again extends and amends exchange, cash tender offers

The Doe Run Resources Corp. (Ca/D) said on Wednesday (Aug. 14). that it is again extending the expiration time of its previously announced offers to exchange new notes plus a cash accrued interest payment for its outstanding 11¼% series B senior secured notes due 2005, its outstanding 11¼% series B senior notes due 2005 (C/D) and its outstanding series B floating interest rate notes due 2003, its previously announced concurrent cash tender off for those three series of notes and the previously announced related solicitation of noteholder consents to proposed changes in the indentures governing those notes. Those offers were extended to 5 p.m. ET on Aug. 20, subject to possible further extension, from the previous Aug. 14 deadline.

The company said that although it has received tenders of notes sufficient to satisfy the previously announced minimum tender conditions required for the consummation of the offers, with holders of 95% of the aggregate principal amount of its outstanding notes having participated, it is nonetheless extending the Offers to allow it to continue discussions with its working capital lenders regarding the terms of its Amended and Restated U.S. Revolving Credit Facility. Doe Run added that it could give no assurance that the offers will be consummated successfully.

AS PREVIOUSLY ANNOUNCED: On April 15, The Doe Run Resources Corp, a St. Louis-based metals smelting company, announced that it had reached an agreement in principle with its corporate parent, New York-based industrial conglomerate The Renco Group, Inc. and with Regiment Capital Advisors, LLC, under which Renco and Regiment would provide Doe Run with significant capital that would enable Doe Run to restructure its existing debt. Under that agreement in principle, Renco said it would purchase $20 million of Doe Run preferred stock and Regiment - already a significant holder of Doe Run's 11¼% senior and senior secured notes and its floating interest rate notes - said it would commit to lend Doe Run $35 million, and would offer other holders of Doe Run notes the opportunity to participate in making such loan. Doe Run said it planned to make a cash tender offer for a portion of its notes, and an exchange offer for the balance of the notes. The $55 million in proceeds of the Renco investment and the Regiment loan would be used to finance the cash tender offer, to pay the accrued interest as of March 15 on the notes that would be exchanged in the exchange offer, and to pay certain costs of those transactions. Doe Run said that if they were successful, the cash tender offer and the exchange offer would significantly reduce its outstanding debt. Doe Run would meanwhile be able to continue to operate all its facilities at present levels and Doe Run's trade creditors would not be adversely affected.

Besides the $20 million investment, Renco would also provide Doe Run with credit support of up to $10 million, if necessary, to provide additional working capital. Doe Run said the non-binding agreement in principle would be subject to agreement on the terms of definitive documentation and further said that the successful completion of the planned transactions would be subject to several conditions, including, among others, the participation by holders of 90% of the principal amount of each class of notes in the cash tender offer and/or the exchange offer (Doe Run originally issued $200 million of the 11¼% senior notes, $50 million of the 11¼% senior secured notes and $55 million of the floating rate notes). It would also be conditioned upon the satisfactory modification of Doe Run's U.S. and Peruvian revolving credit facilities. Doe Run said it anticipates the completion of definitive documentation for the Regiment loan and the Renco investment within 30 days of its press release, at which time more detailed terms would be announced and the cash tender offer and exchange offer would be commenced.

On May 16, Doe Run outlined the terms of the agreement in principal and announced its tender offer and exchange offer for the notes in an 8-K filing with the Securities and Exchange Commission. The company did not initially disclose expiration deadlines for either offer nor did it disclose deadlines for the related consent solicitations. Doe Run said that under the terms of its exchange offer, it would offer the holders of its outstanding 11¼% senior secured notes $770 per $1,000 principal amount of the notes in new Doe Run 11¼% exchange notes due 2007, plus a cash payment of $56.25 per $1,000 principal amount equal to the amount of accrued and unpaid interest through March 15. It would offer the holders of its existing 11¼% senior notes $670 per $1,000 principal amount of the notes in new exchange notes, plus the $56.25 per $1,000 principal amount interest payment, and it would offer the holders of the existing floating-rate notes $670 per $1,000 principal amount of the notes in new exchange notes, plus an accrued interest payment of $46.90 per $1,000 principal amount. Doe Run said the exchange offer would be open only to those holders who could reasonably be defined as Accredited Investors under Rule 501(a) of the Securities Act of 1933. Doe Run said that simultaneously with the exchange offer, it would begin a cash tender offer for the outstanding notes, under which it would offer to buy the notes at a price between $250 and $350 per $1,000 principal amount. Doe Run said that it would select as the cash payment the highest price specified by any noteholder that would enable the company to purchase the maximum amount of notes while not exceeding its target aggregate purchase price of $44 million. Doe Run said it would pay the same cash payment for all of the notes validly tendered at or below that cash payment price and not subsequently withdrawn, upon the closing of the transaction. It said that holders whose notes were accepted for purchase under the cash tender offer would not be eligible to receive any interest payment on them above the cash payment price. Any holder tendering notes under the cash tender offer would also be considered to have tendered them under the exchange offer as well. Should the amount of notes tendered under the cash tender offer and not subsequently withdrawn exceed the amount that the company would be able to buy and still stay within its available cash aggregate purchase price of $44 million, Doe Run would first accept for payment all notes tendered below that cash payment price and would then accept notes tendered at the cash payment price on a pro-rata basis. Any notes thus tendered under the cash tender offer which could not be purchased for cash would then be exchanged for the appropriate amount of new exchange notes and the appropriate cash interest payment. Doe Run said that should a holder choose to neither tender his existing notes under the exchange offer nor the cash tender offer, it reserves the right to leave such unexchanged or unpurchased notes outstanding upon the conclusion of its offers; it also, however, reserves the right (but is under no obligation) to subsequently purchase such notes as permitted under the terms of its new senior credit facility either on the open market or in negotiated transactions, either for similar or for different consideration as it is offering under the exchange offer and the cash tender offer. It also reserves the right to defease the remaining outstanding notes or to redeem them under the terms of their indentures. Any remaining outstanding notes will be subject to indenture changes for which Doe Run is seeking noteholder consent concurrently with its exchange and cash tender offers. Doe Run said the tender of notes under either the exchange offer or the cash tender offer would be considered to constitute noteholder consent to the proposed indenture amendments, which would eliminate substantially all of the restrictive operating and financial covenants in the indentures, and which would modify a number of the "event of default" provisions, and various other provisions currently contained in the existing notes' indentures.

Doe Run also said that in connection with the offers, it would enter into a new $37.5 million, four-year senior secured credit facility with Regiment Capital Advisors, and that it would offer noteholders who initially elect to participate in the exchange offer the opportunity to participate as co-lenders under the New Senior Credit Facility on a pro-rata basis, based upon those noteholders' respective interests in the existing notes initially tendered in the exchange offer. The participation of the noteholders as co-lenders will be subject to Regiment's right, in its sole and absolute discretion, to lend at least 60% of the aggregate principal amount of the Initial Senior Loan. Each noteholder who elects to participate in the Initial Senior Loan will also participate as a co-lender in any subsequent senior loan approved by Doe Run's existing lenders on a pro- rata basis, in accordance with such noteholder's percentage interest in the Initial Senior Loan. The proceeds of the Initial Senior Loan will be used to consummate the exchange offer and the cash tender offer. Noteholders choosing to participate in the Initial Senior Loan will receive warrants exercisable for up to 20% of the fully diluted common stock of Doe Run, at an initial total exercise price of $2,000,000. The warrants would be distributed to the participating noteholders on a pro-rata basis in accordance with such participant's interest in the Initial Senior Loan. Doe Run said that consummation of the cash tender offer and the exchange offer, as well as related transactions, would be conditioned upon a number of conditions including - but not limited to - the valid tender (without subsequent withdrawal) of at least $125 million total principal amount of the existing notes under the cash tender offer; the participation by 90% of the outstanding principal amount of each of the three series of existing notes in the exchange offer and/or the cash tender offer; and the receipt of the requisite consents to the proposed indenture changes. Doe Run said it expected to launch the tender offer and exchange offer by the last week of May, and warned that there could be no assurance that it would be able to successfully complete the transactions described.

On June 6, Doe Run said in an SEC filing that it had begun an offer to exchange new notes plus a cash accrued interest payment for its outstanding 11¼% senior and senior secured notes due 2005, and its outstanding floating interest rate notes due 2003; had begun a concurrent cash tender off for those three series of notes; and had begun a related solicitation of noteholder consents to proposed changes in the indentures governing those notes. Doe Run said it was also offering noteholders choosing to participate in the exchange offer the option of also participating in its new senior credit facility as co-lenders. It outlined terms of the offers that were the same as those which Doe Run had already outlined in a previous SEC filing. In its latest filing, the company also said that the exchange offer, the cash tender offer and the right of participation in the senior loan would each expire at 5 p.m. ET on July 9, subject to possible extension. Tendered notes could be withdrawn at any time prior to the expiration date.

On July 9, Doe Run extended the pending exchange offer, the cash tender offer and the consent solicitation to 5 p.m. ET on July 19, and said that it was providing updated projected financial information. The company further reported that it had been engaged in "constructive discussions" with holders of a "significant amount" of its notes, and said it was extending the expiration time of the offers and providing the updated projected financial information "as an aid to further discussion of the Offers."

On July 19, Doe Run said that it had further extended its exchange offer for its 11¼% senior and senior secured notes due 2005 and its Series B floating interest rate notes due 2003, its concurrent cash tender off for those three series of notes and solicitation of noteholder consents to 5 p.m. ET on Aug. 2, subject to possible further extension, from the previous July 19 deadline. The company also amended the terms of the aforementioned offers to - among other things - allow its noteholders the ability to elect to participate in a third offer, "the Exchange/Loan Offer," in addition to participating in the previously described cash tender offer or exchange offer. It said that holders who participate in this "Exchange/Loan Offer" will be able to exchange their notes for a participation interest in the Initial Senior Loan which the company, as previously announced, is entering into as part of its overall recapitalization. Doe Run said that it was extending the expiration time of the offers to allow noteholders to consider participating in such an additional offer. Doe Run also said it was amending the terms of the exchange notes which noteholders could elect to receive as part of either the exchange offer or the newly announced "Exchange/Loan Offer" to include, among other things, the provision of a required 1% per annum cash interest payment on each of the first two interest payment dates (as opposed to the previously outlined provision contained in the "Description of Exchange Notes" found in the official Offering Memorandum, which indicated that such interest payments could be paid in full "in kind" (i.e., through the issuance of additional notes, with no cash component). Doe Run further announced that in addition to the inclusion of the new "Exchange/Loan Offer," it has amended the previously outlined terms of its "New Senior Credit Facility" (including the "Subsequent Senior Loan Participation") and its exchange notes to be issued to holders of its current notes successfully participating in the exchange offer. Doe Run said that as amended, the New Senior Credit Facility will consist of the "Initial Senior Loan" in the amount of $35.7 million and a Subsequent Senior Loan in the amount of $25 million, $10 million of which will be committed by Regiment Capital Advisors, LLC at closing to provide Doe Run with additional working capital under certain circumstances in the future. The balance of the Subsequent Senior Loan is to be funded at the request of Doe Run subject to the consent of the lenders. The Renco Group, Inc., ultimate parent of Doe Run, has agreed to take a participation interest in $5 million of the aforementioned $10 million "Regiment Credit Support." Holders of Doe Run's currently outstanding notes who participate in the Initial Senior Loan will have the option - but not the obligation - to participate in the Subsequent Senior Loan. Noteholders who have already tendered their notes into the cash tender offer or the exchange offer will have the right to withdraw or amend such tenders; noteholders who wish to tender their notes into the new "Exchange/Loan Offer" must transmit a completed Letter of Transmittal for such offer to the depositary and exchange agent for the offers.

On Aug. 2, Doe Run said that it had extended the exchange offer, the concurrent cash tender offer and the related consent solicitation to 5 p.m. ET on Aug. 6 from the previous Aug. 2 deadline. Doe Run also said that it has received "overwhelming support" for the offers from holders of all three categories of notes. Doe Run said that although, to the best of its knowledge, holders of approximately 95% of Doe Run's aggregate principal amount of notes outstanding had chosen to participate in the offers, as of the old deadline, approximately 86% of the floating rate notes had been tendered for participation in the offers, still less than the 90% minimum tender required for consummation of the offers; therefore, the company said it was extending the expiration time of the offers in order to continue discussions with John Hancock Funds, Triton Partners LLC and Hawkeye Capital, LP concerning the participation by those entities with respect to the floating-rate notes which those companies hold. Doe Run cautioned that there could be "no assurance that [it] will be able to consummate the Offers successfully."

On Aug. 7, Doe Run said that it had extended its exchange offer, the concurrent cash tender offer and the related consent solicitation to 5 p.m. ET on Aug. 14 from the previous Aug. 6 deadline. Doe Run also said that it was amending the minimum tender condition with respect to the 2003 floating-rate notes, reducing it to 86% from 90% previously. The minimum tender conditions for the other two series of notes - which had previously been achieved-remains 90%. With the amendment regarding the floating-rate notes, Doe Run said the minimum tender required for the consummation of the offers had now been achieved. State Street Bank and Trust Co. in Boston (call 617 662-1548 or fax documents to 617 662-1452) is the exchange agent and the depositary for the offers. MacKenzie Partners, Inc. (call 212 929-5500 or, toll-free, 800 322-2885) is the information agent.

© 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.