Brazil’s Votorantim offers to swap out $500 million of 7¼% notes

By Susanna Moon

Chicago, Jan. 11 – Votorantim Cimentos SA (VCSA)’s wholly owned subsidiary, Votorantim Cimentos International SA (VCI), is offering to exchange up to $500 million principal amount of its $1,150,500,000 of outstanding 7¼% senior notes due 2041.

In exchange, the company is offering 7¼% senior notes due April 5, 2041 to be newly issued by St. Mary’s Cement Inc. (Canada), a wholly owned, direct subsidiary of VCI, and guaranteed by VCSA.

Votorantim is also soliciting consents to amend the notes indenture to eliminate substantially all of the restrictive covenants, as well as various events of default and related provisions.

The exchange offer and the consent solicitation will remain open until 11:59 p.m. ET on Feb. 7.

The existing notes are guaranteed by Votorantim SA and VCSA.

The exchange and the concurrent cash tender offer are being held as part of VCSA's internationalization strategy and corporate reorganization that advances VCSA's international expansion, in addition to enabling a more efficient capital management, according to a company announcement.

The total exchange value will be $1,000 principal amount of new St. Mary’s notes and a cash payment of $2.50 for each $1,000 principal amount tendered by 5 p.m. ET on Jan. 24, the early deadline.

The total exchange amount includes an early premium of $30 principal amount of new notes and the cash payment of $2.50 per each $1,000 principal amount.

Holders who tender after the early deadline will receive $970 principal amount of new notes.

The company will also pay accrued interest up to but excluding the settlement date.

The offer is conditioned on the Fibria sale, the receipt of notes in the purchase offer of at least $500 million and the issue of at least $300 million principal amount of new St. Mary’s notes.

Tendered notes may not be withdrawn after the early deadline.

Concurrently with the exchange, VCI is offering to purchase for cash up to $650 million of the VCI notes, its 3½% notes due 2022 and its 3¼% notes due 2021.

The exchange offer and consent solicitation is being made to holders of VCI notes who are either non-U.S. persons under Regulation S or qualified institutional buyers under Rule 144A.

D.F. King (212 269-5550, 800 735-3591, +44 20 7920 9700, VotoCim@dfking.com or https://sites.dfkingltd.com/VotoCim) is the information and exchange agent.

Citigroup Global Markets Inc. (212 723-6106 or 800 558-3745), Morgan Stanley & Co. LLC (212 761-1057 or 800 624-1808), BB Securities Ltd. (+44 20 7367 5832), Banco Bradesco BBI SA (212 888-9145), Itau BBA USA Securities, Inc. (888 770-4828) and Santander Investment Securities Inc. (212 940-1442 or 855 404-3636) are the dealer managers.

Votorantim Cimentos is a cement company based in Sao Paulo.

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