Jack Cooper extends offers to buy toggle notes, exchange 9¼% notes

By Angela McDaniels

Tacoma, Wash., May 1 – Jack Cooper Enterprises, Inc. extended the tender offer for its $58,640,415 of 10½%/11¼% senior PIK toggle notes due 2019, and Jack Cooper Holdings Corp. extended the exchange offer for its $375 million of 9¼% senior secured notes due 2020, according to a news release from the companies.

Both offers were extended to 5 p.m. ET on May 15 from 12:01 a.m. ET on May 2.

As of 5 p.m. ET on April 28, holders had tendered 51.37% of the PIK toggle notes and none of the 9¼% notes.

The company said it is engaged in discussions with representatives of an ad hoc group of holders of the 9¼% notes about the terms of the offers and potential alternative deleveraging transactions. The ad hoc group represents that its members own about 85% of the 9¼% notes and about 33% of the PIK toggle notes, or about 68% of the PIK toggle notes not previously tendered.

The company said it can give no assurance that it will complete the offers or reach an agreement about a potential alternative deleveraging transaction with the ad hoc group.

As previously reported, each company is also soliciting consents to proposed amendments that would, among other things, eliminate substantially all of the restrictive covenants and eliminate some events of default contained in the note indentures. Jack Cooper Holdings is also soliciting consents to the release of the collateral securing its notes.

Jack Cooper Enterprises needs consents from the holders of a majority of its notes, and Jack Cooper Holdings needs consents from the holders of two-thirds of its notes.

Eligible holders may not deliver consents without tendering their notes, and eligible holders may not tender their notes without delivering consents.

The consent deadline was 5 p.m. ET on April 17.

For each $1,000 principal amount of PIK toggle notes tendered by the consent deadline, holders will receive $150.00 of cash, which includes an $11.50 consent payment.

For each $1,000 principal amount of 9¼ notes tendered by the consent deadline, holders will receive $350.00 of cash, which includes a $50.00 consent payment, and 2.47 warrants to purchase class B common stock of Jack Cooper Enterprises.

No accrued interest will be paid for either series of notes.

No fractional warrants will be issued. If an exchange would yield a fractional warrant, the company will round down to the nearest whole warrant.

The offers are conditioned on the receipt of the requisite consents and the receipt by Jack Cooper Holdings of enough net proceeds from an offering of new secured notes to fund the cash portion of the offers.

The companies plan to issue a new series of 13¾% senior secured notes due 2023 through one or more private placements and use the proceeds to fund the tender offer and the exchange offer.

On March 9, the companies entered into a term sheet related to the proposed private notes offering with Solus Alternative Asset Management LP. However, Solus did not commit to purchase the new notes.

The information agent and the tender and exchange agent is D.F. King & Co., Inc. (212 269-5550, 800 755-7250 or jc@dfking.com).

Jack Cooper is a specialty transportation and other logistics provider based in Kansas City, Mo.

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