Andrade Gutierrez International S.A. Announces Commencement of Offer to Exchange Any and All of its 11.000% Senior Secured PIK Toggle Notes due 2021 for Newly Issued 9.500% Senior Secured Notes due 2024 and related Consent Solicitation

BELO HORIZONTE, Brazil, Nov. 20, 2019 /PRNewswire/ -- Andrade Gutierrez International S.A., having its registered office at 12c, rue Guillaume Kroll, L-1882 Luxembourg, Grand Duchy of Luxembourg, and listed with the Luxembourg Trade and Companies' Register under the number B 176492,  ("AG International", or the "Issuer"), today announced the commencement of an offer by the Issuer to Eligible Holders (as defined below) to exchange (the "Exchange Offer") any and all of the U.S.$356,348,680 aggregate principal amount outstanding of the 11.000% Senior Secured PIK Toggle Notes due 2021 (the "Old Notes") of the Issuer for the newly issued 9.500% Senior Secured Notes due 2024 of the Issuer (the "New Notes"). The New Notes will be unconditionally guaranteed (the "Guarantees") by Andrade Gutierrez Engenharia S.A. ("AG Engenharia"), Andrade Gutierrez Investimentos em Engenharia S.A. ("AGIE"), AG Construções e Serviços S.A. ("AGCS") and Zagope SGPS, S.A. ("Zagope" and, together with AG Engenharia, AGIE and AGCS, the "Guarantors") (provided that Zagope's guarantee is limited to U.S.$.50 million). The Exchange Offer is being made on the terms and subject to the conditions set forth in the exchange offering memorandum and consent solicitation statement dated November 19, 2019, including Annexes A, B and C attached thereto (the "Exchange Offering Memorandum and Consent Solicitation Statement"). The Issuer concurrently announced that it is soliciting consents (the "Consent Solicitation" and, together with the Exchange Offer, the "Exchange Offer and Consent Solicitation") from holders of the Old Notes ("Eligible Holders") to amend the indenture governing the Old Notes (the "Old Notes Indenture"), to release certain collateral securing the Old Notes and to make modifications in respect of the remaining collateral securing the Old Notes. The principal purpose of the Exchange Offer and Consent Solicitation is to reprofile the AGE Group's indebtedness and improve its capital structure.

The table below summarizes certain payment terms for the Old Notes:

THE EXCHANGE OFFERING MEMORANDUM AND CONSENT SOLICITATION STATEMENT CONTAINS CERTAIN IMPORTANT INFORMATION THAT SHOULD BE READ BEFORE ANY DECISION IS MADE WITH RESPECT TO THE EXCHANGE OFFER AND CONSENT SOLICITATION, IN PARTICULAR, SEE "RISK FACTORS" IN THE EXCHANGE OFFERING MEMORANDUM AND CONSENT SOLICITATION STATEMENT. THIS ANNOUNCEMENT MUST BE READ IN CONJUNCTION WITH THE EXCHANGE OFFERING MEMORANDUM AND CONSENT SOLICITATION STATEMENT.

Subject to the satisfaction of certain conditions precedent, the obligations of the Issuer under the New Notes and the obligations of the Guarantors under the Guarantee will be secured by a security interest (alienação fiduciária) in 1,932,688,526 outstanding common shares of AG Engenharia owned by AGIE, representing 99.99% of AG Engenharia's capital stock and its related economic rights (the "AGE Collateral"), which will be shared on a pari passu basis between the Old Notes and the New Notes pursuant to the terms of a pari passu intercreditor agreement.

Also subject to the satisfaction of certain conditions precedent, the obligations of the Issuer under the New Notes and the obligations of the Guarantors under the Guarantees will be secured by a fiduciary sale (alienação fiduciária) of (i) 38,579,300 outstanding common shares of CCR S.A. owned by Andrade Gutierrez Participações S.A. and its related economic rights (which amount is expected to be increased to 80,777,927 common shares of CCR S.A. ("CCR") owned by Andrade Gutierrez Participações S.A. ("AGPAR") before the issue date of the New Notes, as described in the Exchange Offering Memorandum and Consent Solicitation Statement); and (ii) a number of common shares of CCR owned by AGPAR and its related economic rights, that are expected to (1) be released from time to time from the lien currently securing certain existing local secured obligations of certain of our affiliates, and (2) not to be subject to the lien to be established to secure certain debentures of AGPAR, all subject to a collateral coverage ratio of 130% (the "Initial CCR Collateral") Moreover, also subject to the satisfaction of certain conditions precedent, the obligations of the Issuer under the New Notes and the obligations of the Guarantors under the Guarantees will also be secured by a security interest (alienação fiduciária) in all common shares of CCR owned by AGPAR which are released from time to time by virtue of an event of release from the existing lien established to secure certain existing local secured obligations or from the lien to be established to secure certain debentures of AGPAR, and any and all economic rights related thereto, all subject to a collateral coverage ratio of 130% (the "Additional CCR Collateral" and, together with the Initial CCR Collateral, the "CCR Collateral" and, together with the AGE Collateral, the "Collateral"). Please refer to the Exchange Offering Memorandum and Consent Solicitation Statement, dated as of November 19, 2019, for further information on the creation and perfection of the Collateral.

The Exchange Offer will expire at 11:59 p.m. (New York City time) on December 17, 2019, unless extended (such time and date, as it may be extended, the "Expiration Date"). Eligible Holders who validly tender (and do not validly withdraw) their Old Notes for exchange and deliver their consents to the Proposed Amendments (as defined in the Exchange Offering Memorandum and Consent Solicitation Statement) at or prior to 5:00 p.m. (New York City time) on December 3, 2019, unless extended (such date and time, including as extended, the "Early Participation Date"), will be eligible to receive the Total Exchange Consideration (as defined below), which includes the Early Participation Premium (as defined below), plus Accrued Interest (as defined in the Exchange Offering Memorandum and Consent Solicitation Statement). Eligible Holders who validly tender Old Notes after the Early Participation Date but at or prior to the Expiration Date in the manner described herein will not be eligible to receive the Early Participation Premium and will therefore only be eligible to receive the Exchange Offer Consideration (as defined below), plus Accrued Interest. Any Old Notes that have been validly tendered pursuant to the Exchange Offer may be validly withdrawn and consents for the Proposed Amendments delivered may be revoked prior to the Early Participation Date but not thereafter, except as may be required by applicable law.

The "Total Exchange Consideration" for each U.S.$1,000 principal amount of Old Notes validly tendered (and not validly withdrawn) at or prior to the Early Participation Date pursuant to the Exchange Offer will be U.S.$1,025.00 in New Notes, which includes an early participation premium equal to U.S.$50.00 in New Notes (the "Early Participation Premium") per U.S.$1,000 principal amount of Old Notes validly tendered (and not validly withdrawn).  Any Eligible Holders who validly tender Old Notes after the Early Participation Date but at or prior to the Expiration Date will not be entitled to receive the Early Participation Premium and will therefore be entitled to receive, for each U.S.$1,000 principal amount of Old Notes validly tendered, U.S.$975.00 (the "Exchange Consideration"). 

Concurrently with the Exchange Offer, the Issuer is soliciting consents in order to, among other things, (i) eliminate substantially all of the restrictive covenants, (ii) reduce the minimum notice period required in connection with the redemption of the Old Notes from 30 days to three business days for any Old Notes that remain outstanding after the Exchange Offer, (iii) direct the trustee for the Old Notes to direct the collateral agent for the Old Notes to enter into (x) a pari passu intercreditor agreement (substantially in the form attached as Annex C to the Exchange Offering Memorandum and Consent Solicitation Statement) with the collateral agent for the New Notes, the authorized representative for the New Notes, the authorized representative for the Old Notes, the Issuer, AG Engenharia and AGIE that will govern the relative rights of the Old Notes, the New Notes and any other Additional First Lien Obligations (as defined in the Exchange Offering Memorandum and Consent Solicitation Statement) with respect to the AGE Collateral and (y) the Amended AGE Collateral Agreement (as defined in the Exchange Offering Memorandum and Consent Solicitation Statement) and (iv) release the CCR Collateral securing the Old Notes. Adoption of the Proposed Amendments to the Old Indenture requires the consent of the holders of at least 75% in aggregate principal amount of the Old Notes (the "Requisite Consents"). If an Eligible Holder validly tenders the Old Notes in the Exchange Offer, such Eligible Holder will be deemed to have given its consent, with respect to the principal amount of such tendered Old Notes, to the Proposed Amendments. Eligible Holders may neither deliver their consents with respect to the Consent Solicitation without tendering Old Notes in the Exchange Offer nor tender Old Notes in the Exchange Offer without delivering consents in the Consent Solicitation. The Proposed Amendments to the Old Indenture will not become operative, however, until at least 75% in aggregate principal amount outstanding of the Old Notes have validly delivered the Requisite Consents.

The Issuer's obligation to consummate the Exchange Offer and Consent Solicitation is subject to the satisfaction or waiver of certain conditions, which are more fully described in the Exchange Offering Memorandum and Consent Solicitation, including, among others, (i) the receipt by the Issuer of gross proceeds of at least $40 million in the aggregate from the issuance of the New Notes in a separate private placement and (ii) receipt of the Requisite Consents. There can be no assurance such conditions will be satisfied. 

If all conditions to the Exchange Offer and Consent Solicitation have been satisfied by the Early Participation Date, the Issuer intends to settle the Old Notes validly tendered (and not validly withdrawn) at or prior to the Early Participation Date promptly following the Early Participation Date, or December 9, 2019 (the "Early Settlement Date") unless the Early Participation Date is extended. Any subsequently validly tendered (and not validly withdrawn) Old Notes will be settled on the Final Settlement Date (as defined below).

The Issuer expects to settle the Old Notes validly tendered (and not validly withdrawn) at or prior to the Expiration Date promptly following the Expiration Date, or December 19, 2019 (the "Final Settlement Date"), unless the Expiration Date is extended.

The Issuer has the right, in its sole discretion, to amend or terminate the Exchange Offer and the Consent Solicitation at any time.

The Information and Exchange Agent for the Exchange Offer is D.F. King & Co., Inc. To contact the Information and Exchange Agent, banks and brokers may call +1-212-269-5550, and others may call U.S. toll-free: +1-866-856-3065. Additional contact information is set forth below.

This notice to the market does not represent an offer to sell securities or a solicitation to buy securities in the United States or in any other country. This notice to the market is released for disclosure purposes only, in accordance with applicable legislation. It not does not constitute marketing material, and should not be interpreted as advertising an offer to sell or soliciting any offer to buy securities issued by the Issuer. This notice to the market is not for distribution in or into or to any person located or resident in any jurisdiction where it is unlawful to release, publish or distribute this announcement.

None of the Issuer, the Information and Exchange Agent,  nor any of their respective affiliates, makes any recommendation as to whether holders should tender or refrain from tendering all or any portion of their Old Notes in response to the Exchange Offer and Consent Solicitation. None of the Issuer, the Information and Exchange Agent, nor any of their respective affiliates, has authorized any person to give any information or to make any representation in connection with the Exchange Offer and Consent Solicitation other than the information and representations contained in the Exchange Offering Memorandum and Consent Solicitation Statement.

Neither the U.S. Securities and Exchange Commission, any U.S. state securities commission nor any regulatory authority of any other country has approved or disapproved of the Exchange Offer, passed upon the merits or fairness of the Exchange Offer or passed upon the adequacy or accuracy of the disclosure in the Exchange Offering Memorandum and the Consent Solicitation Statement.

SOURCE Andrade Gutierrez International S.A.