Brazil’s USJ amends exchange terms for 9 7/8% notes; offer extended

By Susanna Moon

Chicago, May 3 – Brazil’s USJ – Acucar e Alcool SA said it again amended its private exchange in which it is offering newly issued 9 7/8%/12% senior secured pay-in-kind toggle notes due 2021 for its 9 7/8% senior notes due 2019.

This time, the change was made as a result of a request by holders who “own a substantial portion” of the notes, according to a company notice.

As a result, if holders tender between 60% and 90% of the notes, and the company receives corporate approvals and bankruptcy court authorization of the plan, then holders will now receive $750 principal amount of new notes per $1,000 principal amount. In this case, holders will only receive the new notes after the plan is granted by the bankruptcy courts. Originally, they would have received $700 of new notes per $1,000 par amount.

If holders tender for exchange more than 90% of the notes and the offer is completed, they will receive $750 principal amount of newly issued 9 7/8%/12% senior secured PIK notes due 2021 for each $1,000 principal amount. That amount remains unchanged.

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

The exchange offer also was extended to 11:59 p.m. ET on May 13 from May 6 “in order to comply with applicable laws and regulations,” the company said. The exchange was previously set to end on May 2 and, before that, April 18.

As of 5 p.m. ET on May 2, holders had tendered and given consents for $59,653,000 principal amount of the existing notes, compared with $59,453,000 of the notes as of April 25.

On April 12 the company extended the offer from its original expiration of 11:59 p.m. ET on April 11.

Holders had tendered $59,453,000 of notes by the April 18 deadline, up from $57,653,000 as of April 11.

The company amended the terms of the exchange on April 26, saying that it also is seeking approval for an extrajudicial restructuring plan under a potential recuperacao extrajudicial proceeding under the provisions of Brazilian federal law, which subsequently may be submitted to a U.S. bankruptcy court under Chapter 15, as previously reported.

In connection with that, the consent solicitation also includes a limited waiver of the bankruptcy event of default provision in the existing notes indenture, solely to permit the company to start proceedings before the bankruptcy courts for confirmation and implementation of the plan by Oct. 31, 2016.

More details

When the offer was announced on March 15, the company said that holders who tendered their notes and delivered their consents before 5 p.m. ET on March 28, the early date, would receive $650 for each $1,000 principal amount of notes accepted for exchange. Those who tendered their notes for exchange after the early deadline would receive $600 per $1,000 principal amount.

The amount of new notes will be issued in minimum denominations of $200,000 and in integral multiples of $1,000 after that and will be rounded down to the nearest $1,000.

In addition to the exchange, the company is also soliciting consents to amend the notes to eliminate substantially all of the restrictive covenants and some events of default.

Holders who tender their notes for exchange must also deliver consents to the proposed amendments.

Tendered notes may not be withdrawn and consents may not be revoked after execution of the supplemental indenture containing the proposed amendments to the notes indenture.

The exchange offer is conditioned on the tenders of at least 90% of the outstanding notes. The offer and solicitation are also subject to the perfection of the mortgage on the collateral securing the new notes and the receipt of required waivers from some creditors to permit the company to issue the new notes and perfect the mortgage on the collateral securing the new notes, the release noted.

The exchange offer is being made, and the new notes offered, only in the United States to holders who are qualified institutional buyers under Rule 144A or outside the United States to holders who are not U.S. persons under Regulation S.

D.F. King & Co., Inc. (212 269-5550 or 877 283-0318) is the information agent and the exchange agent.

USJ is a Sao Paulo-based producer of sugar and ethanol.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.