TK to tender for 11 3/8% notes, repay bank debt

New York, Nov. 2 - TK Aluminum Ltd. said it plans to tender for its 11 3/8% senior notes due 2011 and repay its credit facility with proceeds from the sale of assets to Tenedora Nemak, SA de CV.

TK will offer a price of €950 per €1,000 principal amount for the notes, which it called a "significant premium" to their trading price before the announcement.

The tender will be subject to holders of a majority of the notes accepting.

The Carmagnola, Italy, parent of Teksid Aluminum Luxembourg, SArl, SCA also said it will use sale proceeds to redeem other debt including the €115 million of credit facilities made up of a revolver and a second lien loan.

Under the agreement, TK will sell its operations in North America, except its lost-foam operations in Alabama, and its operations and interests in South America, China and Poland.

TK will receive $496.8 million in cash, along with a synthetic equity interest in the Nemak business post-closing.

Teksid Aluminum is a maker of aluminum engine castings for the automotive industry.

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