Great Lakes Dredge & Dock buyer gets 11¼% noteholder consents

New York, Dec. 15 - GLDD Merger Sub Inc. said that it had received the necessary consents to proposed indenture changes from the holders of the 11¼% senior subordinated notes due 2008 issued by Great Lakes Dredge & Dock Corp (B3/B-) by the now-expired 5 p.m. ET consent deadline of GLDD's previously announced tender offer and related consent solicitation for the notes.

GLDD said that as of the consent deadline it had received tenders of notes and deliveries of related consents from holders of 82.6% of the $155 million principal amount of notes outstanding. The supplemental indenture incorporating the desired amendments has been executed by Great Lakes and the notes' trustee but will not become operative until after the notes are accepted for purchase and payment for them has been made following the expiration of the tender offer. The tender offer is slated to expire on Dec. 29.

As previously announced, GLDD Merger Sub, an affiliate of Chicago-based equity firm Madison Dearborn Partners (which is in the process of purchasing Great Lakes, an Oak Park, Ill.-based provider of marine dredging services), said on Dec. 1 that it had begun a cash tender offer for all $155 million of outstanding 11¼% notes issued by Great Lakes and was also soliciting consents to adopt proposed amendments to the notes' indenture that would eliminate substantially all restrictive covenants and certain event of default provisions.

GLDD set a now-expired consent deadline of 5 p.m. ET on Dec. 11 and said the offer would expire at midnight ET on Dec. 29, subject to possible extension.

It said that tender offer consideration would be $1,031.25 per $1,000 principal amount of notes tendered and accepted for purchase. Holders tendering by the consent deadline will also receive a consent payment of $30 per $1,000 principal amount, while holders tending after the consent deadline would not receive the consent payment.

GLDD said it currently intends to cause Great Lakes to redeem under the terms of the indenture any notes that are not tendered in the tender offer on completion of its acquisition of the company. The current redemption price for the notes is $1,056.25 per $1,000 principal amount of notes, plus accrued and unpaid interest.

GLDD expects to finance the tender offer and acquisition from borrowings by Great Lakes under a new credit facility, a private placement of new notes by Great Lakes and the issuance of equity securities by Great Lakes' parent corporation (high yield syndicate sources said that Great Lakes sold $175 million of new 7¾% senior subordinated notes due 2013 on Dec. 12).

It said completion of the tender offer would be subject to the satisfaction of certain conditions including, among other things, the consummation of the acquisition of the company by Madison Dearborn and its affiliates and acceptance by GLDD of the notes for purchase under the terms of the tender offer.

Lehman Brothers Inc. is dealer-manager and solicitation agent (contact Liability Management Group at 800 438-3242 or collect at 212 528-7581). D.F. King & Co., Inc. is the information agent (888 567-1626 or collect at 212 269-5550).

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