Andrade Gutierrez International S.A. Announces Consent Solicitation for Senior Secured Notes due 2024

RIO DE JANEIRO, Dec. 15, 2020 /PRNewswire/ -- Andrade Gutierrez International S.A. (the "Issuer") announced today that it is soliciting (the "Consent Solicitation") consents (the "Consents") from each holder (each a "Holder" and, together, the "Holders") of record as of 5:00 p.m. New York City time, on December 14, 2020 (the "Record Date") of the U.S.$480,000,000 aggregate principal amount of 9.500% Senior Notes due 2024 (the "Notes"), issued by the Issuer and guaranteed by Andrade Gutierrez Engenharia S.A. (the "Company") and certain of its subsidiaries, to effect amendments to the indenture governing the Notes (the "Indenture"), as described below, upon the terms and subject to the conditions set forth in the Consent Solicitation Statement, dated December 15, 2020 (as may be amended or supplemented from time to time, the "Consent Solicitation Statement"). The Consent Solicitation will expire at 5:00 p.m. New York City time, on December 22, 2020 (such time and date, as the same may be extended from time to time, the "Expiration Date").

Certain details regarding the Notes and the Consent Solicitation are set forth in the table below.

A number of the Company's projects have been halted or delayed, and revenues and cash flow from operations have declined, as a result of the impacts of the restrictive measures implemented in connection with the COVID-19 pandemic. While the Company has implemented certain measures to manage the effects of the pandemic, it is dependent on the cash generation of its projects to continue making cash available to the Issuer to make interest payments on the Notes. The Issuer is soliciting Consents to provide it with the operational flexibility to make the interest payment due on the Notes once it has sufficient cash on hand. Specifically, the Issuer is soliciting Consents in order to amend Section 6.01(1) in the Indenture (and paragraph 15(a) in the Global Securities (as defined in the Indenture) representing the Notes) to:

• extend the grace period set forth therein as it relates to the payment of interest due on the Notes on December 30, 2020, from 30 to 120 days, through (and including) April 29, 2021 (the "First Proposed Amendment"); and
• solely in connection with the Additional Consent Fee Trigger (as defined below), further extend the grace period set forth therein as it relates to the payment of interest due on the Notes on December 30, 2020 for an additional 62 days, through (and including) June 30, 2021 (the "Second Proposed Amendment" and, together with the First Proposed Amendment, the "Proposed Amendments").

Thereafter the grace period shall revert to 30 days for any interest payments on and after June 30, 2021. For the actual text of the Proposed Amendments, see "The Proposed Amendments" in the Consent Solicitation Statement. Except for the Proposed Amendments, all of the existing terms of the Indenture and the Notes will remain unchanged. The Issuer is seeking Consents to the Proposed Amendments as a single proposal and the delivery of a valid and unrevoked Consent by a Holder shall be deemed consent to the Proposed Amendments in their entirety and each valid and unrevoked Consent shall constitute an instruction to the Trustee to direct the Collateral Agent (each as defined in the Indenture) to execute the Supplemental Indenture (as defined below).  For the avoidance of doubt, the Proposed Amendments shall not impair the contractual right of any Holder to receive any principal payment (on or after the Stated Maturity thereof) or interest payment on such Holder's Notes or to institute suit for the enforcement of any such payment, and amounts payable on the Notes that are not paid when due shall continue to accrue interest at the rate of 2.00% per annum in addition to the stated interest rate per annum payable in cash to, but excluding, the date such amounts are paid in accordance with the Notes.

The obligation to pay (or cause to be paid) the Consent Fee for valid and unrevoked Consents to the Proposed Amendments is subject to and conditioned upon (i) the receipt of the Requisite Consents (as defined below) on or prior to the earlier of the Consent Time (as defined below) and the Expiration Date and (ii) the absence of any law or regulation, and the absence of any injunction or action or other proceeding (pending or threatened), that (in the case of any action or proceeding if adversely determined) would make unlawful or invalid or enjoin or delay the implementation of the applicable Proposed Amendment, the entering into of the Supplemental Indenture (as defined below) or the payment of the Consent Fee to the Holders or that would question the legality or validity thereof (collectively, the "Consent Conditions").

If the Holders of at least a majority of the aggregate outstanding principal amount Notes deliver valid and unrevoked Consents to the Proposed Amendments (the "Requisite Consents"), the Issuer and the Guarantors, the collateral agent and, upon receipt of an officers' certificate and an opinion of counsel, the trustee shall execute a supplemental indenture (the "Supplemental Indenture") to the Indenture effecting the Proposed Amendments.  The time and date on which the Supplemental Indenture is executed is hereinafter referred to as the "Consent Time." Consents to the Proposed Amendments may not be revoked at any time after the Consent Time, even if the Expiration Date is later than the Consent Time.  Although the Supplemental Indenture will become effective immediately upon execution at the applicable Consent Time, (i) the First Proposed Amendment will not be operative until the aggregate Consent Fee is paid to The Depository Trust Company ("DTC") for the benefit of the applicable Holders on the Settlement Date (as defined below) and (ii) the Second Proposed Amendment will not be operative until the date that the aggregate Additional Consent Fee is paid (if at all) to DTC for the benefit of the applicable Holders. The Issuer expects to pay, or cause to be paid, the Consent Fee to DTC for the benefit of the Holders within two business days of the Expiration Date and the satisfaction or waiver of all Consent Conditions (such date, the "Settlement Date"). To the extent the Issuer has not paid all amounts due (including default interest) to Holders in respect of interest originally due on the Notes on December 30, 2020 by April 29, 2021 (the "Additional Consent Fee Trigger"), the Issuer expects to pay (or cause to be paid) the aggregate Additional Consent Fee to DTC for the benefit of Holders. Once the Supplemental Indenture is effective, any Consents given may not be revoked. If the Consent Conditions are not satisfied or waived (to the extent permitted), no Consent Fee or Additional Consent Fee will be paid to any Holder. If the Consent Conditions are satisfied or waived (to the extent permitted) in connection with the payment of the Consent Fee, the Consent Conditions shall be deemed satisfied for purposes of the Additional Consent Fee (if paid).

The Consent Solicitation is being made solely by the Consent Solicitation Statement and on the terms and subject to the conditions set forth in the Consent Solicitation Statement. The Issuer may, in its sole discretion, terminate, extend or amend the Consent Solicitation at any time as described in the Consent Solicitation Statement. This announcement is for information purposes only and is neither an offer to sell nor a solicitation of an offer to buy any security and is not a solicitation of consents with respect to the Proposed Amendments or any securities. The Consent Solicitation is not being made in any jurisdiction in which, or to or from any person to or from whom, it is unlawful to make such solicitation under applicable state or foreign securities or blue sky laws.

Neither the Consent Solicitation Statement nor any documents related to the Consent Solicitation have been filed with, or reviewed or approved by, any federal or state securities commission or regulatory authority of any country.  No authority has passed upon the accuracy or adequacy of the Consent Solicitation Statement or any documents related to the Consent Solicitation, and it is unlawful and may be a criminal offense to make any representation to the contrary.

Citigroup Global Markets Inc. ("Citi") is acting as the Solicitation Agent for the Consent Solicitation. Global Bondholder Services Corporation will act as the Information and Tabulation Agent for the Consent Solicitation. Questions or requests for assistance related to the Consent Solicitation or for additional copies of the Consent Solicitation Statement may be directed to Citi at +1 (212) 723-6106 (banks and brokers) and +1 (800) 558-3745 (all others, toll free) or by email at [email protected], or to Global Bondholder Services Corporation at +1 (212) 430-3774 (banks and brokers), +1 (866) 470-3700 (all others, toll free) or by email at [email protected]. The Consent Solicitation Statement is available at: https://www.gbsc-usa.com/andrade/. Holders may also contact their broker, dealer, commercial bank, trust company or other nominee for assistance concerning the Consent Solicitation. Holders are urged to review the Consent Solicitation Statement for the detailed terms of the Consent Solicitation and the procedures for consenting to the Proposed Amendments.

About the Company

The Company is a privately-owned multinational engineering and construction conglomerate headquartered in Rio de Janeiro, Brazil. The Company was founded in 1948 in Belo Horizonte, in the state of Minas Gerais by the Andrade and Gutierrez families.

Forward-Looking Statements

Disclosures in this press release contain forward-looking statements. All statements, other than statements of historical facts, included in this press release that address activities, events or developments that management expects, believes or anticipates will or may occur in the future are forward-looking statements. Without limiting the generality of the foregoing, forward-looking statements contained in this press release specifically include statements regarding the consummation of the Consent Solicitation, including the timing thereof, the Proposed Amendments and the execution of the Supplemental Indenture. These statements are based on certain assumptions made by the Company based on their management's respective experience and perception of historical trends, current conditions, anticipated future developments and other factors believed to be appropriate. Such statements are subject to a number of assumptions, risks and uncertainties, many of which are beyond the control of the Company, which may cause actual results to differ materially from those implied or expressed by the forward-looking statements. Any forward-looking statement applies only as of the date on which such statement is made and the Company does not intend to correct or update any forward-looking statement, whether as a result of new information, future events or otherwise, except as required by law.

SOURCE Andrade Gutierrez International S.A.