Capex S.A. Announces the Commencement of an Exchange Offer Relating to its 6.875% Notes due 2024.

BUENOS AIRES, Argentina, July 24, 2023 /PRNewswire/ --

Capex S.A.
Offer to Exchange, Any and All of its Outstanding
6.875% Notes due 2024
(CUSIP Nos.: 139612AE5 and P20058AC0 ISIN Nos. US139612AE59 and USP20058AC08) 

Capex S.A. ("Capex" or the "Company") hereby announces the commencement of its offer to exchange (the "Exchange Offer") any and all of its outstanding 6.875% Notes due 2024 (the "Old Notes") for newly issued 9.250% Notes due 2028 (the "New Notes") and cash, as applicable, each upon the terms and subject to the conditions set forth in the exchange offer memorandum (the "Exchange Offer Memorandum"), dated July 24, 2023 and the related eligibility letter (the "Eligibility Letter" and, together with the Exchange Offer Memorandum, the "Exchange Offer Documents").

Only holders who have electronically submitted a duly completed Eligibility Letter certifying that they are (1) "qualified institutional buyers" ("QIBs") as defined in Rule 144A under the Securities Act of 1933, as amended (the "Securities Act"), or (2) holders of Old Notes other than "U.S. persons" (as defined in Rule 902 under the Securities Act) who are located outside of the United States, who are qualified offerees in other jurisdictions, are authorized to receive the Exchange Offer Memorandum and to participate in the Exchange Offer (such holders, "Eligible Holders").

Exchange Consideration

Upon the terms and subject to the conditions set forth in the Exchange Offer Documents, Eligible Holders who validly tender Old Notes, and whose Old Notes are accepted for exchange by us may choose between two, mutually exclusive, consideration options, detailed in the table below, in the columns under the headings "Option A" and "Option B."

Eligible Holders whose Old Notes are accepted for exchange in the Exchange Offer will also receive accrued and unpaid interest in respect of such exchanged Old Notes from the last interest payment date to, but excluding, the Settlement Date (as defined below) (such payment, the "Accrued Interest Payment"). 

Tenders of Old Notes under Option A

Upon the terms and subject to the conditions set forth in the Exchange Offer Documents, tenders of Old Notes submitted under Option A at or prior to the Early Participation Date (as defined below) will receive a combination of the Early A Pro-Rata Cash Consideration (as defined below) and the applicable Early A New Notes Consideration (as defined below) (together, the "Early A Consideration"), or solely the Early A Pro-Rata Cash Consideration depending on the amount of Old Notes tendered pursuant to Option A at or prior to the Early Participation Date. Tenders of Old Notes submitted under Option A after the Early Participation Date but at or prior to the Expiration Date (as defined below) will receive U.S.$1,000 principal amount of New Notes per U.S.$1,000 principal amount of Old Notes validly tendered and accepted for exchange (the "Late Exchange Consideration"). For the avoidance of doubt, Eligible Holders submitting tenders after the Early Participation Date will not receive any cash consideration.

The Early A Consideration and the Early B Consideration (as defined below) together are referred to as the "Early Exchange Consideration." The Early Exchange Consideration and the Late Exchange Consideration together are referred to as the "Exchange Consideration."

The aggregate cash consideration payable to all Eligible Holders whose Old Notes are tendered under Option A at or prior to the Early Participation Date and accepted for exchange will be an amount equal to the lesser of (i) the aggregate principal amount of Old Notes that are validly tendered  for exchange under Option A at or prior to the Early Participation Date and accepted for exchange, (ii)  21% of the aggregate principal amount of Old Notes validly tendered and accepted for exchange in the Exchange Offer, and (iii) U.S.$50 million (the "Aggregate Early A Cash Consideration"), payable on a pro rata basis to Eligible Holders of Old Notes, validly submitting tender orders in exchange for Early A Consideration (the "Early A Pro-Rata Cash Consideration").

The Early A New Notes Consideration for each Eligible Holder whose Old Notes are accepted for exchange under Option A at or prior to the Early Participation Date will be New Notes in a principal amount equal to the difference between U.S.$1,000 and the Early A Pro-Rata Cash Consideration received by each such Eligible Holder (the "Early A New Notes Consideration").

At the Expiration Date, the Early A Pro-Rata Cash Consideration and Early A New Notes Consideration will be determined based on the aggregate principal amount of Old Notes validly tendered and accepted for exchange.

Accordingly, the actual amounts of Early A New Notes Consideration and Early A Pro-Rata Cash Consideration comprising the Early A Consideration to be received by each Eligible Holder whose Old Notes are accepted in the Exchange Offer under Option A at or prior to the Early Participation Date will depend on the actual participation by Eligible Holders in the Exchange Offer.

Tenders of Old Notes under Option B

Upon the terms and subject to the conditions set forth in the Exchange Offer Documents, tenders of Old Notes submitted under Option B at or prior to the Early Participation Date will receive U.S.$1,040 principal amount of New Notes per U.S.$1,000 principal amount of Old Notes validly tendered and accepted for exchange. The consideration received by holders of Old Notes under this paragraph is referred to as "Early B Consideration." For the avoidance of doubt, no cash consideration will be paid to Eligible Holders whose Old Notes are accepted for exchange under Option B.

Upon the terms and subject to the conditions set forth in the Exchange Offer Documents, tenders of Old Notes submitted under Option B after the Early Participation Date but at or prior to the Expiration Date will receive the Late Exchange Consideration, which is U.S.$1,000 principal amount of New Notes per U.S.$1,000 principal amount of Old Notes validly tendered and accepted for exchange. Consideration for Old Notes, either under Option A or Option B, submitted after the Early Participation Date but at or prior to the Expiration Date, is the same.

The following table sets forth certain material terms of the Exchange Offer:

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(1)       Per U.S.$1,000 principal amount of Old Notes validly tendered and accepted for exchange. The Exchange Consideration does not include the Accrued Interest Payment (as defined below), which shall be paid together with the applicable Exchange Consideration as described herein.
(2)       Eligible Holders of Old Notes validly submitting tenders at or prior to the Early Participation Date (as defined below) in exchange for the Early A Consideration will receive a combination of the Early A Pro-Rata Cash Consideration and Early A New Notes Consideration, or solely the Early A Pro-Rata Cash Consideration depending on the principal aggregate amount of Old Notes tendered in the Exchange Offer pursuant to Option A at or prior to the Early Participation Date and accepted for exchange. The aggregate cash consideration payable to all Eligible Holders whose Old Notes are tendered under Option A at or prior to the Early Participation Date and accepted for exchange will be an amount equal to the lesser of (i) the aggregate principal amount of Old Notes that are validly tendered  for exchange under Option A at or prior to the Early Participation Date and accepted for exchange, (ii)  21% of the aggregate principal amount of Old Notes validly tendered and accepted for exchange in the Exchange Offer, and (iii) U.S.$50 million, payable on a pro rata basis to Eligible Holders of Old Notes, validly submitting tender orders in exchange for Early A Consideration. At the Expiration Date, the Early A Pro-Rata Cash Consideration and Early A New Notes Consideration will be determined based on the aggregate principal amount of Old Notes validly tendered and accepted for exchange. For the avoidance of doubt, Eligible Holders submitting tenders after the Early Participation Date will not receive any cash consideration.
(3)       The Late Exchange Consideration will be U.S.$1,000 principal amount of New Notes per U.S.$1,000 principal amount of Old Notes validly tendered after the Early Participation Date but at or prior to the Expiration Date and accepted for exchange. The Late Exchange Consideration will only consist of New Notes, and will be the same either under Option A or Option B, as described herein.
(4)       For the avoidance of doubt, no cash consideration will be paid to Eligible Holders whose Old Notes are accepted for exchange under Option B.
(5)       The Old Notes are currently listed on the Luxembourg Stock Exchange and traded on its Euro MTF Market and are listed on Bolsas y Mercados Argentinos S.A. and are traded on Mercado Abierto Electrónico S.A.

The Exchange Offer will expire at 11:59 p.m. (New York City time) on Friday, August 18, 2023 (such date and time with respect to the Exchange Offer, as the same may be extended with respect to such Exchange Offer, the "Expiration Date"). In order to be eligible to receive the Early Exchange Consideration, eligible holders of Old Notes must validly tender and not validly withdraw their Old Notes, on or prior to 5:00 p.m., New York City time, on Friday, August 4, 2023, unless extended (such date and time, as the same may be extended, the "Early Participation Date"). Eligible Holders of Old Notes who validly tender their Old Notes after the Early Participation Date, but on or prior to the Expiration Date, will be eligible to receive only the Late Exchange Consideration. Old Notes validly tendered may be validly withdrawn at any time prior to 5:00 p.m., New York City time on Friday, August 4, 2023, unless extended by the Company in its sole discretion (such date and time, as the same may be extended, the "Withdrawal Date"), but not thereafter. Unless the Exchange Offer is extended, the Settlement Date for the Exchange Offer is expected to be on Friday August 25, 2023, in line with the authorization received from the Argentine Central Bank related thereto.

The consummation of the Exchange Offer is conditioned upon, (i) the valid tender of at least U.S.$167,192,200 aggregate principal amount of Old Notes in the Exchange Offer (the "Minimum Participation Condition"), which represents 70% of the aggregate principal amount of Old Notes outstanding, (ii) the valid tender of at least U.S.$85,000,000 aggregate principal amount of Old Notes in the Exchange Offer under Option B (the "Minimum Option B Participation Condition"), (iii) the satisfaction of the Financing Condition (as defined below) and (iv) the other conditions described in the section of the Exchange Offer Memorandum entitled "Description of the Exchange Offer—Conditions to the Exchange Offer". We may waive, in our sole discretion, any of the conditions to the consummation of the Exchange Offer subject to applicable law; provided that we may not waive the Minimum Option B Participation Condition.

For illustrative purposes only, we have prepared the hypothetical scenarios below.

The scenarios below assume in each case that the Minimum Participation Condition (equal to an aggregate participation in the Exchange Offer of at least U.S.$167,192,200 principal amount of Old Notes) and the Minimum Option B Participation Condition (equal to a participation under Option B of at least U.S.$85,000,000 principal amount of Old Notes) are, at least, met.

The Early A Pro-Rata Cash Consideration per U.S.$1,000 principal amount of Old Notes will be equal to:

• U.S.$325.00, assuming a participation of 100% of the principal amount of Old Notes in the Exchange Offer and that U.S.$153,846,000 aggregate principal amount of Old Notes (i.e., all tenders other than the U.S.$85,000,000 Minimum Option B Participation) are tendered and accepted under the Early A Consideration;
• U.S.$427.00, assuming a participation of 70% of the principal amount of Old Notes in the Exchange Offer (Minimum Participation Condition) and that U.S.$82,192,000 aggregate principal amount of Old Notes (i.e., all tenders other than the U.S.$85,000,000 Minimum Option B Participation) are tendered and accepted under the Early A Consideration; and
• U.S.$610.00, assuming a participation of 70% of the principal amount of Old Notes in the Exchange Offer (Minimum Participation Condition) and that U.S.$57,534,540 aggregate principal amount of Old Notes (i.e., 70% of tenders, other than the U.S.$85,000,000 Minimum Option B Participation) are tendered and accepted under the Early A Consideration.

Consequently, the Early A Pro-Rata Cash Consideration cannot be less than U.S.$325.00 per U.S.$1,000 principal amount of Old Notes if the Minimum Option B Participation Condition is met.  We may waive, in our sole discretion, any of the Offer Conditions (as defined below) subject to applicable law; provided that we may not waive the Minimum Option B Participation Condition.

In order to fund the Aggregate Early A Cash Consideration, the Company has entered into certain pre-export facility agreements.  The entering into such pre-export facility agreements by the Company, on terms and conditions satisfactory to the Company, and the receipt by the Company of the net cash proceeds from such pre-export facilities on or prior to the Settlement Date, sufficient to pay the Aggregate Early A Cash Consideration is herein referred to as the "Financing Condition".

The purpose of the Exchange Offer is to exchange the Old Notes for cash and the New Notes, as applicable, which will extend the maturity of the debt obligations associated with the Old Notes.

Morrow Sodali International LLC is the Information and Exchange Agent for the Exchange Offer. Questions or requests for assistance related to the Exchange Offer or for additional copies of the Exchange Offer Documents may be directed to Morrow Sodali International LLC at the following email address: [email protected]. You may also contact your broker, dealer, commercial bank, trust company or other nominee for assistance concerning the Exchange Offer. The Exchange Offer Documents are available for Eligible Holders at the following web address: https://projects.morrowsodali.com/capex.

Citigroup Global Markets Inc. and Santander US Capital Markets LLC are acting as dealer managers (the "Dealer Managers") for the Exchange Offer. Industrial and Commercial Bank of China (Argentina) S.A.U., Banco de Galicia y Buenos Aires S.A.U., Banco Santander Argentina S.A. and Banco CMF S.A. are acting as local placement agents.

Subject to applicable law, the Exchange Offer may be amended in any respect, extended or, upon failure of a condition to be satisfied or, except in connection with the Minimum Option B Participation Condition, waived prior to the Expiration Date or Settlement Date, as the case may be, terminated, at any time and for any reason. Although we have no present plans or arrangements to do so, we reserve the right to amend, at any time, the terms of the Exchange Offer (including, without limitation, the conditions thereto, other than the Minimum Option B Participation Condition) in accordance with applicable law. We will give Eligible Holders notice of any amendments and will extend the Expiration Date if required by applicable law.

Eligible Holders of Old Notes are advised to check with any bank, securities broker or other intermediary through which they hold Old Notes as to when such intermediary would need to receive instructions from an Eligible Holder in order for that Eligible Holder to be able to participate in, or withdraw their instruction to participate in, the Exchange Offer before the deadlines specified in the Exchange Offer Documents. The deadlines set by any such intermediary for the submission of instructions will be earlier than the relevant deadlines specified above.

To reimburse the time and cost of processing the tender of Old Notes in the Exchange Offer, Capex will pay a processing fee to brokers acting on behalf of certain Eligible Holders. This processing fee will be payable to brokers only with respect to individual tenders of up to U.S.$250,000 aggregate principal amount of Old Notes per each Eligible Holder and will be in an amount equal to 0.25% of the principal amount of such tendered Old Notes that are accepted for exchange. See "Description of the Exchange Offer—Processing Fee" in the Exchange Offer Memorandum for more information regarding eligibility requirements that the process brokers must follow to obtain the processing fee.

Important Notice

This announcement is not an offer of securities for sale in the United States, and none of the New Notes has been or will be registered under the Securities Act or any state securities law. They may not be offered or sold within the United States or to, or for the account or benefit of, U.S. persons except pursuant to an exemption from, or in a transaction not subject to the registration requirements of the Securities Act. This press release does not constitute an offer of the New Notes for sale, or the solicitation of an offer to buy any securities, in any state or other jurisdiction in which any offer, solicitation or sale would be unlawful. Any person considering making an investment decision relating to any securities must inform itself independently based solely on an offering memorandum to be provided to eligible investors in the future in connection with any such securities before taking any such investment decision. 

This announcement is directed only to holders of Old Notes who are (1) "qualified institutional buyers" ("QIBs") as defined in Rule 144A under the Securities Act, or (2) other than "U.S. persons" (as defined in Rule 902 under the Securities Act) who are located outside of the United States, who are qualified offerees in other jurisdictions, are authorized to receive the Exchange Offer Memorandum and to participate in the Exchange Offer. No offer of any kind is being made to any beneficial owner of Eligible Bonds who does not meet the above criteria or any other beneficial owner located in a jurisdiction where the Exchange Offer Solicitation is not permitted by law. 

The distribution of materials relating to the Exchange Offer may be restricted by law in certain jurisdictions. The Exchange Offer is void in all jurisdictions where it is prohibited. If materials relating to the Exchange Offer come into your possession, you are required by the Company to inform yourself of and to observe all of these restrictions. The materials relating to the Exchange Offer, including this communication, do not constitute, and may not be used in connection with, an offer or solicitation in any place where offers or solicitations are not permitted by law. If a jurisdiction requires that the Exchange Offer be made by a licensed broker or dealer and a dealer manager or any affiliate of a dealer manager is a licensed broker or dealer in that jurisdiction, the Exchange Offer shall be deemed to be made by the dealer manager or such affiliate on behalf of the Company in that jurisdiction.

Forward-Looking Statements

All statements in this press release, other than statements of historical fact, are forward-looking statements. These statements are based on expectations and assumptions on the date of this press release and are subject to numerous risks and uncertainties which could cause actual results to differ materially from those described in the forward-looking statements. Risks and uncertainties include, but are not limited to, market conditions, and factors over which the Company has no control. The Company assumes no obligation to update these forward-looking statements, and does not intend to do so, unless otherwise required by law.

Notice to Investors in the European Economic Area and the United Kingdom

The New Notes are not intended to be offered, sold or otherwise made available to and should not be offered, sold or otherwise made available to any retail investor in the European Economic Area ("EEA"). For these purposes, (a) a retail investor means a person who is one (or more) of: (i) a retail client as defined in point (11) of Article 4(1) of Directive 2014/65/EU (as amended, "MiFID II"); or (ii) a customer within the meaning of Directive (EU) 2016/97 (the "Insurance Distribution Directive"), where that customer would not qualify as a professional client as defined in point (10) of Article 4(1) of MiFID II; or (iii) not a qualified investor as defined in Regulation (EU) 2017/1129 (the "Prospectus Regulation"); and (b) the expression "offer" includes the communication in any form and by any means of sufficient information on the terms of the offer and the New Notes to be offered so as to enable an investor to decide to subscribe for the New Notes. Consequently, no key information document required by Regulation (EU) 1286/2014 (as amended, the "PRIIPs Regulation") for offering or selling the New Notes or otherwise making them available to retail investors in the EEA has been prepared and therefore otherwise offering or selling the New Notes or otherwise making them available to any retail investor in the EEA may be unlawful under the PRIIPs Regulation.

The New Notes are not intended to be offered, sold or otherwise made available to and should not be offered, sold or otherwise made available to any retail investor in the United Kingdom. For these purposes: (a) the expression retail investor means a person who is one (or more) of the following: (i) a retail client, as defined in point (8) of Article 2 of Regulation (EU) No 2017/565 as it forms part of domestic law by virtue of the European Union (Withdrawal) Act 2018 (EUWA); or (ii) a customer within the meaning of the provisions of the Financial Services and Markets Act 2000 (as amended, the "FSMA") and any rules or regulations made under the FSMA to implement Directive (EU) 2016/97, where that customer would not qualify as a professional client, as defined in point (8) of Article 2(1) of Regulation (EU) No 600/2014 as it forms part of domestic law by virtue of the EUWA and (iii) not a qualified investor as defined in Article 2 of Regulation (EU) 2017/1129 as it forms part of domestic law by virtue of the EUWA; and (b) the expression an offer includes the communication in any form and by any means of sufficient information on the terms of the offer and the New Notes to be offered so as to enable an investor to decide to subscribe for the New Notes. Consequently, no key information document required by Regulation (EU) No 1286/2014 as it forms part of domestic law by virtue of the EUWA (the "UK PRIIPs Regulation") for offering or selling the New Notes or otherwise making them available to retail investors in the UK has been prepared and therefore offering or selling the New Notes or otherwise making them available to any retail investor in the UK may be unlawful under the UK PRIIPs Regulation.

The Information and Exchange Agent for the Exchange Offer Solicitation is:

Any question regarding the terms of the Exchange Offer should be directed to the Dealer Managers.
The Dealer Managers for the Exchange Offer are: 

The Exchange Offer Memorandum shall be available online at https://projects.morrowsodali.com/capex until the consummation or termination of the Exchange Offer.

SOURCE Capex S.A.