Wickes extends exchange offer for 11 5/8% '03 notes

Wickes Inc. said on Thursday (Jan. 23) that it had extended its previously announced offer to exchange new debt for its outstanding 11 5/8% senior subordinated notes due 2003 to 5 p.m. ET on Feb. 19, subject to possible further extension, from the original deadline at 5 p.m. ET on Jan. 22.

Wicks said that to date it has received tenders from the holders of approximately 67% of the outstanding aggregate principal amount of the 11 5/8% notes, an amount that includes tenders from the three largest holders, representing approximately 40% of the outstanding notes, who had previously agreed to exchange their notes under the terms of the exchange offer.

D. F. King & Co., Inc. (call 800 859-8508 toll-free in the U.S.) is the information agent for the exchange offer. The exchange agent is HSBC Bank USA (call 718 488-4475 attn: Paulette Shaw). Investors with further questions about the exchange transaction can call Wickes at 847 367-3414.

AS PREVIOUSLY ANNOUNCED, Wickes, a Vernon Hills, Ill.-based distributor of building materials and manufacturer of value-added building components, said on Dec. 20 that it had begun an offer to exchange new debt for its $63.956 million of outstanding 11 5/8% notes. Wickes said it would exchange an equal principal amount of its new senior secured notes due 2005 for any and all of the existing bonds.

The company said the new notes would initially pay interest at the same 11 5/8% rate as the existing notes from the date of issuance through Dec.15, 2003 and at 18% thereafter. Interest at 11 5/8 percent will be paid currently in cash, while the balance will be paid currently in cash to the extent the company has excess cash flow (as defined in the indenture governing the new senior secured notes), and will accrue to the extent not paid in cash.

The new Senior Secured Notes will be secured by liens on the company's owned real estate and equipment, subject to the priority of the liens to the company's senior lenders, and will rank equally with the company's revolving credit agreement; they will rank senior to the existing subordinated notes.

Wickes also said it was soliciting consents from the holders of the existing subordinated notes to amendments to the notes' indenture that would eliminate most of the covenants contained therein.

It said that the three largest noteholders, representing approximately 40% of the outstanding subordinated notes, had agreed to exchange their notes under the terms of the exchange offer and to consent to such amendments.

In order for such amendments to become effective, consents must be obtained from the holders of a majority of the outstanding subordinated notes.

The company said the exchange offer would expire at 5 p.m. ET on Jan. 22, subject to possible extension. It is not subject to any minimum amount of subordinated notes being exchanged. But the closing of the exchange offer is subject to the company obtaining the consent of its senior lenders or the refinancing of its senior debt with a new senior lender who consents to the exchange offer. Wickes warned that it could give no assurances that such consent or refinancing will be obtained, although it said that talks have begun with a potential new senior lender to refinance the senior debt.

Wickes additionally said that its exchange offer contemplates a $4.98 million mandatory redemption in cash scheduled for the new senior secured notes' first interest payment date, March 17, 2003, as a result of the previously announced Lanoga sale proceeds (on Oct. 30, Wickes said it had agreed to sell substantially all of the assets of its operations in Wisconsin and northern Michigan to Lanoga Corp., through its United Building Centers division. Completion of the sale, at a price of 55.253 million, plus an additional net amount of approximately $20 million for the value of the inventory and accounts receivable of the business operations sold, was announced on Dec. 16).

The mandatory redemption proceeds, which will be applied to the new Senior Secured Notes based upon the 85 percent applicable optional redemption price, will be shared pro-rata based on the aggregate principal amount of existing senior subordinated notes exchanged.

Cascades terminates 8 3/8% '07 notes offer

Cascades Inc. said on Thursday (Jan. 23) that it will terminate the previously announced offer to exchange newly issued Cascades debt securities for the outstanding 8 3/8% senior notes due 2007 issued by the company's subsidiary, Cascades Boxboard Group Inc.

Cascades offered no explanation for the termination decision.

AS PREVIOUSLY ANNOUNCED: Cascades, a Kingsey Falls, Quebec-based paper products manufacturer, said on Jan, 8 that it would exchange up to US$125 million of newly issued debt for the 8 3/8% notes, as part of a series of transactions it was undertaking to refinance substantially all of its and its subsidiaries outstanding credit facilities and credit lines, other than credit facilities and credit lines of its joint ventures.

Other transactions concurrently announced included the issuance of US$325 million of newly issued debt securities in a private placement, and the entering into of a new C$500 million four-year revolving credit facility. Cascades said that it expected the private placement of the new notes to close concurrently with the new revolving credit facility, and the exchange offer to close shortly thereafter. The company said it expects to complete the refinancing during the first quarter of 2003.

It said the refinancing would be contingent upon a number of factors, including market conditions and Cacades' determination as to the appropriate time, if any, for the refinancing.

On Jan. 21, Cascades announced that it would extend the consent payment deadline for its exchange offer to 5 p.m. ET last Wednesday (Jan. 22), from the previous deadline of 5 p.m. ET on Jan. 28, which had not been previously publicly announced.

Cascades said the consummation of the exchange offer would remain subject to the satisfaction or waiver, on or prior to the expiration date for the exchange offer, of certain conditions to the offer, including receipt of the requisite consents needed to approve proposed amendments to the indenture governing the notes. It further noted that except for the extension of the consent payment deadline, the terms of the exchange offer would remain the same.

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