Dimon receives consents to amend 9 5/8%, 7¾% notes

New York, Nov. 1 - Dimon Inc. said it received the necessary consents from holders of its $200 million of outstanding 9 5/8% senior notes due 2011 and its $125 million of 7¾% senior notes due 2013 to amend the note indentures.

The company also received waivers from the necessary majority of its bank lenders for the cross defaults on its $150 million credit facility.

The consent solicitation for the notes expired at 5 p.m. ET on Oct. 29.

At the previous announcement on Oct. 27, Dimon said it amended and again extended the solicitation of consents from holders of its 9 5/8% notes and 7¾% notes.

Under the amended offer, Dimon will pay a consent payment of $35 per $1,000 principal amount of notes instead of the $5 per $1,000 principal amount previously on offer.

In addition, the terms are revised to confirm the company's ability to make dividend payments to holders of its common stock of up to $3.525 million in any fiscal quarter ending on or before June 30, 2005. Previously Dimon had wanted indefinite authorization to pay $14.1 million in any 12-month period.

The consent solicitation will now end at 5 p.m. ET on Oct. 29 instead of 5 p.m. ET on Oct. 27.

Dimon said the changes are based on discussions with holders of more than a majority of the principal amount of the notes.

As announced on Oct. 12, Dimon, a Danville, Va.-based dealer of leaf tobacco, is seeking a waiver of certain technical defaults under their indentures and amendments to the notes' indentures confirming the company's ability to pay future dividends at the current rate to holders of Dimon's common stock and to make additional investments in certain majority-owned subsidiaries.

The solicitation was originally to have expired on Oct. 22 and was subsequently extended in daily increments.

The consent solicitation will be conditioned upon the company's receipt of consents from holders of at least a majority of the outstanding principal amount of each series of notes, as well as other customary conditions.

Dimon said that the technical defaults for which it is seeking waivers from the noteholders relate to the company's determination of amounts available to make certain "restricted payments," as defined by the notes' indenture - specifically, four dividend payments on the company's common stock made since December 2003, and investments in a majority-owned subsidiary during the same period.

It said that it initially interpreted the indentures as permitting it to pay common stock dividends and make investments in this subsidiary, provided that there was sufficient availability in the "restricted payments basket," described in the indentures, and provided that it was able to take on additional debt under various "permitted indebtedness baskets" described in the indentures.

The company subsequently determined that the indentures actually prohibit these "restricted payments" if a more stringent consolidated interest coverage test is not satisfied.

Dimon further explained that it is undertaking the consent solicitation to waive any violations of the indentures related to these payments and to confirm its ability to pay future dividends and to make up to $2 million of additional investments in majority-owned subsidiaries before Dec. 31, 2005, in compliance with the indentures. It said that dividends exceeding the current amount and investments in non-wholly owned subsidiaries exceeding $2 million would remain conditioned on the company's ability to meet the consolidated interest coverage ratio test in the indentures of its notes.

Dimon also said that it is seeking waivers of cross-defaults under its $150 million credit facility and some of its subsidiaries' operating lines of credit. The effectiveness of the consents from the noteholders is conditioned upon Dimon getting waivers from the required lenders under the credit facility.

Wachovia Securities is the solicitation agent (contact the Liability Management Group at 704 715-8341 or at 866 309-6316). D.F. King & Co. Inc. is the information agent (call 212 269-5550).

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