Automotores Gildemeister Announces Agreement in Principle with Ad Hoc Group of Noteholders on Terms of Restructuring

Nov 24, 2015, 14:47 ET from Automotores Gildemeister S.A.

SANTIAGO, Chile, Nov. 24, 2015 /PRNewswire/ -- Automotores Gildemeister S.A. (together with its subsidiaries and affiliates, the "Company") announced today that it has reached an agreement in principle (the "Agreement"), as outlined in the term sheet available at the following website http://bit.ly/1P6uAUj (the "Term Sheet"), with an ad hoc group (the "Ad Hoc Group") of holders of over 70% of the aggregate principal amount of the Company's Existing Notes (as defined below), including more than two-thirds of the principal amount of the Company's 8.250% Senior Notes due 2021 and more than two-thirds of the principal amount of the Company's 6.750% Senior Notes due 2023 (together, the "Existing Notes") to restructure the terms of the Existing Notes.  The Agreement, which is subject to, among other things, the negotiation of definitive documentation, contemplates the exchange of the Existing Notes, subject to the terms and conditions contained in the Term Sheet, for a combination of (i) new Senior Secured Notes that will be secured by liens on real estate and other assets, (ii) new preferred stock (iii) and warrants to acquire, in the aggregate, 40.0% of the Company's common stock (the "Transaction").  The Company believes that the Transaction will enhance its ability to maintain access to sources of liquidity and improve its capacity to address the macroeconomic challenges in its primary markets of Chile and Peru while providing substantial value to the Company's bondholders and other stakeholders.

A spokesperson for the Company commented, "With this agreement, the Company expects to continue operating in its primary markets and meeting its obligations to its customers, employees, suppliers and other creditors.  We continue to believe that the Company's line-up of high quality vehicles, beginning with Hyundai, provides customers in the market for a new car with an excellent range of choices across all segments."

Consistent with the Agreement, the Company did not make its scheduled interest payment due today under the indentures for the Existing Notes (the "Indentures") and has entered into a forbearance agreement with the Ad Hoc Group in the form available at the following website http://bit.ly/1XcAxnc (the "Forbearance Agreement").  Pursuant to the Forbearance Agreement, the Ad Hoc Group has agreed to forbear from pursuing any remedies under the Indentures in respect of defaults thereunder up to December 7, 2015, subject to a possible extension if mutually agreed upon by the Company and the Ad Hoc Group.  The Company and the Ad Hoc Group have agreed, during the forbearance period, to negotiate in good faith regarding definitive documentation of the terms outlined in the Term Sheet.  No assurances can be given that the parties will reach agreement on definitive documentation or that the Company will be able to successfully execute a restructuring.

Finally, in connection with the discussions with the Ad Hoc Group relating to the restructuring of the Company's obligations under the Existing Notes, the Company has, since November 19, 2015, provided the Ad Hoc Group with certain non-public information relating to the Company (the "Disclosed Information").  Pursuant to confidentiality agreements entered into by the Company with members of the Ad Hoc Group, the Company agreed to publicly disclose the Disclosed Information if certain events occurred.  This information is being disclosed on the following website http://bit.ly/1Ys7vgr and sent to reputable international wire services to comply with the Company's obligations under the confidentiality agreements.

THIS PRESS RELEASE DOES NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY ANY SECURITIES IN THE UNITED STATES, AND IT DOES NOT CONSTITUTE AN OFFER, SOLICITATION OR SALE IN ANY STATE OR JURISDICTION IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL. SECURITIES MAY NOT BE OFFERED OR SOLD IN THE UNITED STATES UNLESS THEY ARE REGISTERED OR EXEMPT FROM REGISTRATION UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"). ANY PUBLIC OFFERING OF SECURITIES IN THE UNITED STATES WILL BE MADE BY MEANS OF A PROSPECTUS THAT MAY BE OBTAINED FROM THE COMPANY AND THAT WILL CONTAIN DETAILED INFORMATION ABOUT THE COMPANY AND ITS MANAGEMENT, AS WELL AS FINANCIAL STATEMENTS. THIS PRESS RELEASE IS FORMULATED IN ACCORDANCE WITH RULE 135E OF THE SECURITIES ACT.

SOURCE Automotores Gildemeister S.A.