World Kitchen completes tender offer for 12% notes, gets over 92%

New York, June 18 - WKI Holding Co. Inc. said it successfully completed its tender offer for its 12% senior subordinated notes due 2010 and the related consent solicitation and repaid $113.5 million of the notes, or more than 92% of the more than $123 million previously outstanding.

With the completion of the tender offer, WKI's World Kitchen Inc. subsidiary has now eliminated more than 60% of its funded debt since January 2003, reducing it to $140 million from about $365 million.

Due to its debt reduction, World Kitchen has lowered its annual interest expense by more than $19 million and has no borrowings outstanding under its $75 million revolving credit facility. World Kitchen's financial leverage as of the completion of the tender offer is expected to be slightly above 50%, as measured by debt to total capitalization and adjusted to reflect the reduction in funded debt.

The tender offer was funded using the proceeds of World Kitchen's recently completed sale of its OXO International business.

As previously announced, WKI/World Kitchen, a Reston, Va.-based maker of kitchenware under such popular trademarked brand names as CorningWare, Pyrex, Corelle, Revere, EKCO and Baker's Secret, said on May 18 that it had begun a tender offer for any and all of its $123.15 million of outstanding 12% notes. It was also soliciting noteholder consents to proposed changes in the notes' indenture that would eliminate all restrictive covenants and certain default provisions and make other amendments necessary to release all the collateral securing the notes. The company also said that if the tender offer and consent solicitation were completed, World Kitchen would no longer be obligated to file periodic and other reports with the Securities and Exchange Commission.

The company set a consent deadline of 5 p.m. ET on June 2 and said the offer would expire at 5 p.m. ET on June 16, with both deadlines subject to possible extension.

WKI said the total purchase price for validly tendered notes not subsequently withdrawn would be their $1,000 par value plus, as applicable, a consent payment equal to 3% of the principal amount of notes outstanding, paid pro rata based on the principal amount of notes tendered prior to the consent date.

The company said that a holder could not tender notes without also delivering consents or deliver consents without also tendering notes.

It said completion of the tender offer would be conditioned on the closing of the sale of World Kitchen's OXO International business - now completed - the valid tender of at least 70% of the outstanding principal amount of notes, approval of the tender offer by World Kitchen's senior revolving and term loan lenders, and certain other customary conditions.

On June 2, the company said that as of the consent deadline, which expired as scheduled at 5 p.m. ET on June 2 without extension, it had received the necessary noteholder consents to amend the 12% notes' indenture.

WKI, the trustee under the indenture and the subsidiary guarantors executed a supplemental indenture amending the notes, but the company said the amendments would not become operative until WKI completed the tender offer. It said it expected that more than 90% of the notes would be tendered.

J.P. Morgan Securities Inc. was the dealer-manager for the tender offer and consent solicitation (call Jacob Steinberg at 212 270-1814), and Bondholder Communications Group was the information agent (contact Urtha Pantri at 888 385-2663).

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