UAP, United Agri amend consideration for 10¾% notes, extend consent deadline for both issues

New York, May 7 - UAP Holding Corp. and its wholly owned United Agri Products Inc. subsidiary said they extended the consent deadline on their tender offers for UAP's 10¾% senior discount notes due 2012 and United Agri Products' 8¼% senior notes due 2011, and the related respective consent solicitations.

That consent deadline was extended to 5 p.m. ET on May 10, subject to possible further extension, from the originally announced 5 p.m. ET on May 7.

The companies said that as of 5 p.m. ET on May 6, $171.695 million principal amount of the 8¼% notes and $26.67 million principal amount at maturity of the 10¾% notes had been validly tendered and not withdrawn.

The underlying tender offers for the notes meanwhile continue and are scheduled to expire on May 24, subject to possible extension.

UAP Holding also said that it amended the total consideration it is offering to the holders of the 10¾% notes; such consideration will now be the product of (x) the accreted value of the 10¾% notes on the date that is 30 days immediately following the payment date for the 10¾% notes' tender offer and (y) 116.125%, of which $20 is the consent payment. The originally announced total consideration to be paid for the 10¾% notes was to have been $819.04 per $1,000 principal amount at maturity, of which $20 was the consent payment.

The consideration that United Agri Products is offering to the holders of its 8¼% notes meanwhile is unchanged from the original offer.

As previously announced, UAP and United Agri Products - a Greeley, Colo.-based distributor of seeds and agricultural chemicals said - on April 27 that UAP was offering to purchase for cash any and all of its outstanding $125 million principal amount at maturity of 10¾% notes, while United Agri Products would purchase for cash any and all of its outstanding $225 million of 8¼% notes. The companies said they were also soliciting noteholder consents to proposed indenture changes that would eliminate most of the restrictive covenants in the respective indentures, and would eliminate the registration rights and liquidated damages provided for in the registration rights agreements applicable to the notes.

The companies initially set a consent deadline of May 7, which has since been extended, and said the tender offers would expire at 9 a.m. ET on May 24, subject to possible extension.

UAP initially said the total consideration to be paid for tendered and accepted 10¾% notes would be $819.04 per $1,000 principal amount at maturity, including a $20 per $1,000 consent payment payable only to holders who validly tender their notes by the consent deadline. That consideration was subsequently amended.

United Agri Products said that total consideration to be paid for tendered and accepted 8¼% notes will be a blended price, based upon the $1,082.50 per $1,000 principal amount price at which United Agri Products could redeem a portion of the notes with the proceeds of an equity offering, and the present value of future cash flows up to and including Dec. 15, 2007 - the first date on which the notes may be redeemed - on the notes, based on the assumption that the notes will be redeemed in full at $1,041.25 per $1,000 principal amount on such date, discounted at a rate equal to 137.5 basis points over the yield to maturity on the 3 % U.S. Treasury note due Nov. 15, 2007.

United Agri Products said the total consideration on the 8¼% notes will include a $20 per $1,000 principal amount consent payment for holders tendering their notes by the consent deadline, and it will also include accrued but unpaid interest on the notes up to, but not including, the payment date.

Holders who tender either series of notes will be required to consent to the proposed indenture amendments and the registration rights agreement changes. Tenders of notes prior to the consent deadline may be validly withdrawn and consents may be validly revoked at any time before 5 p.m. ET on the consent deadline, but not after that, unless the tender offers and the consent solicitations are terminated without any notes being purchased. Holders tendering their notes after the consent deadline but before the offer expires will not receive the consent payment as part of their consideration.

UAP Holdings and United Agri Products both expect to pay for any of their respective notes purchased in same-day funds on a date promptly following the expiration of its tender offer and consent solicitation.

The tender offers are each conditioned on, among other things, the receipt by the company by the consent deadline of consents from the holders of at least a majority of the outstanding principal amount of the 8¼% notes and a majority of the outstanding principal amount at maturity of the 10¾% notes. "Majority" excludes any of the notes already owned by the companies or their affiliates.

They are also conditioned upon United Agri Products amending its existing revolving credit facility and entering into a new senior secured second lien term loan facility, the net proceeds of which will be used to pay for the notes in the tender, and upon consummation of UAP Holdings' offering of Income Deposit Securities, the net proceeds of which will be used, among other things, to pay the consideration for the notes purchased in the tender offers.

The companies have retained UBS Investment Bank to act as dealer manager in connection with the tender offers and consent solicitations (call the UBS Liability Management Group at 888 722-9555 x4210 or collect at 203 719-4210).

MacKenzie Partners Inc. is the information agent (call collect at 212 929-5500 or 800 322-2885).

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