Energuate Trust (a Cayman Islands Trust) Announces Commencement Of Consent Solicitation For Its 5.875% Senior Notes Due 2027

GUATEMALA CITY, Nov. 28, 2017 /PRNewswire/ -- Intertrust SPV (Cayman) Limited, an ordinary company incorporated with limited liability under the laws of the Cayman Islands, acting solely in its capacity as trustee (the "Issuer") of the Energuate Trust (the "Trust"), established pursuant to a Trust Deed dated December 24, 2016, announced today that it has commenced a solicitation (the "Solicitation") of consents (the "Consents") from the holders of its outstanding 5.875% Senior Notes due 2027 (the "Notes"), upon the terms and subject to the conditions set forth in a Consent Solicitation Statement (as it may be amended or supplemented from time to time, the "Statement") and an accompanying Consent Form (as it may be amended or supplemented from time to time, the "Consent Form"), each dated as of November 28, 2017, to certain proposed amendments (the "Proposed Amendments") to the Loan Agreement, dated as of May 3, 2017 (the "Loan Agreement"), by and among Distribuidora de Electricidad de Occidente, S.A. ("DEOCSA") and Distribuidora de Electricidad de Oriente, S.A. ("DEORSA" and, together with DEOCSA, the "Parent Guarantors"), as borrowers, Credit Suisse AG, Cayman Islands Branch (the "Lender") and The Bank of New York Mellon, as administrative agent.

The Notes were issued pursuant to an indenture, dated as of May 3, 2017 (the "Indenture"), by and among the Issuer, the Parent Guarantors and The Bank of New York Mellon, as trustee (the "Trustee").

The Proposed Amendments will amend the Loan Agreement in connection with the sale by Inkia Energy Limited ("Inkia"), an exempted company organized under the laws of Bermuda with operations in Latin America and the Caribbean, and one of Inkia's subsidiaries of substantially all of their assets, including approximately 91% of the equity interests in DEOCSA and approximately 93% of the equity interests in DEORSA, to holding companies indirectly owned by certain funds managed by I Squared Capital Advisors (US) LLC and one or more minority co-investors (the "Acquisition").

The Proposed Amendments will be effected by an amendment to the Loan Agreement (the "Loan Agreement Amendment") as described in more detail in the Statement.

The Solicitation will expire at 5:00 p.m., New York City time, on December 7, 2017, unless extended or earlier terminated (such time on such date, as the same may be extended or earlier terminated, the "Expiration Time").  The Solicitation is subject to customary conditions, including, among other things, the receipt of valid Consents with respect to a majority in aggregate principal amount of the outstanding Notes (the "Requisite Consents") at or prior to the Expiration Time (which Consents have not been revoked prior to the earlier to occur of the date on which the Loan Agreement Amendment is executed and the Expiration Time (the "Revocation Time")).

In the event that each of the conditions to the Solicitation described in the Statement is satisfied or waived by the Issuer, including, but not limited to, the receipt of the Requisite Consents, the Issuer will pay to each holder of record (each such holder, a "Holder") of the Notes as of 5:00 p.m., New York City time, on November 27, 2017 who has delivered a valid Consent in respect of such Notes at or prior to the Expiration Time (and has not revoked such Consent prior to the Revocation Time), $2.50 in cash for each $1,000 principal amount of Notes (the "Consent Fee").  Upon satisfaction or waiver of the conditions to the Solicitation, the Issuer will pay the Consent Fee as promptly as practicable on the closing date of the Acquisition and immediately prior to such closing.  Holders of Notes who deliver Consents but validly revoke and do not redeliver their Consents in accordance with the Statement or deliver their Consents after the Expiration Time will not receive the Consent Fee.  Subject to applicable law, the Solicitation may be abandoned or terminated for any reason at any time, including after the Expiration Time and prior to the Proposed Amendments becoming operative, in which case any Consents received will be voided and no Consent Fee will be paid to any Holders.

If the Requisite Consents are received at or prior to the Expiration Time, in accordance with the terms of the Indenture and the Loan Agreement, (1) the Issuer will notify the Lender that it has received the Requisite Consents to the Proposed Amendments and (2) the Trust and the Trustee will deliver an instruction to the Lender to execute the Loan Agreement Amendment with the Parent Guarantors and the other parties thereto to give effect to the Proposed Amendments.  The Proposed Amendments will not become operative unless and until all conditions have been satisfied or waived and the Consent Fee has been paid.  If the Requisite Consents are not received at or prior to the Expiration Time, the Proposed Amendments will not be adopted and the Consent Fee will not be paid.

The Acquisition

On November 24, 2017 the Parent Guarantors' indirect parent company, Inkia and one of its subsidiaries (collectively, the "Sellers"), entered into a Share Purchase Agreement pursuant to which the Sellers will, upon the satisfaction or waiver of closing conditions, sell substantially all of their Latin American and Caribbean businesses to Nautilus Inkia Holdings LLC and one or more other newly formed holding companies (each, a "Bidco") that are indirectly owned by certain funds managed by I Squared Capital Advisors (US) LLC (collectively, the "Sponsor") and one or more minority co-investors.  The sale is for cash consideration of $1,177 million plus excess proportionally consolidated group cash at closing above $49.9 million. The Sponsor intends to finance $150 million of the cash consideration for the sale with additional indebtedness that is expected to be pari passu with Inkia's 5.875% Senior Notes due 2027 (for which the Sponsor has obtained financing commitments). This indebtedness may be refinanced concurrently with or immediately following consummation of the Acquisition.  The Parent Guarantors are not expected to provide, nor will provide, a guarantee of such additional indebtedness or any refinanced indebtedness. The initial purchase price for the sale is subject to a number of adjustments, including for changes in working capital, outstanding debt and Inkia's proportionally consolidated group cash as described above.  Following consummation of the Acquisition, the Parent Guarantors will become indirect subsidiaries of a Bidco and the Sponsor intends to retain existing management. Inkia and the Parent Guarantors currently expect the Acquisition to close by the end of calendar year 2017, but no assurances can be made that such timing will occur.

Consummation of the Acquisition would constitute a Change of Control (as defined in the Loan Agreement) under the Loan Agreement and, consequently, the Indenture. The Indenture currently requires the Issuer, following a Change of Control that results in a Rating Decline (as defined in the Loan Agreement), to make an offer to repurchase all or any part of the Notes at a cash purchase price equal to 101% of the aggregate principal amount thereof, plus accrued and unpaid interest, if any, on the Notes repurchased, to the date of such repurchase.  The Loan Agreement currently requires the Parent Guarantors, following a Change of Control that results in a Rating Decline, to make an offer to prepay all or any part of the Loans (as defined in the Loan Agreement) at a cash purchase price equal to 101% of the aggregate principal amount thereof, plus accrued and unpaid interest, if any, on the Loans prepaid, to the date of such prepayment.  While the Issuer and the Parent Guarantors currently do not expect the Acquisition to cause a Rating Decline and thereby require the Issuer and the Parent Guarantors to make such offers, the Issuer is seeking Consents from Holders to amend certain provisions of the Loan Agreement to provide certainty that the Sellers will be able to consummate the Acquisition without the Issuer and the Parent Guarantors being required to make such offers.

The Issuer has engaged Credit Suisse Securities (USA) LLC to act as Solicitation Agent and D.F. King & Co., Inc. to act as Information and Tabulation Agent for the Solicitation.  Questions regarding the Solicitation may be directed to Credit Suisse Securities (USA) LLC at (800) 820-1653 (toll-free) or (212) 538-2147 (collect).  Requests for documents relating to the Solicitation may be directed to D.F. King & Co., Inc. at (866) 530-8636 (toll-free), (212) 269-5550 (banks and brokers) or email at [email protected].

This press release is for informational purposes only and the Solicitation is only being made pursuant to the terms of the Statement and the related Consent Form.  The Solicitation is not being made to, and Consents are not being solicited from, Holders of Notes in any jurisdiction in which it is unlawful to make such Solicitation or grant such Consents.  None of the Issuer, the Parent Guarantors, the Trustee, the Solicitation Agent or the Information and Tabulation Agent makes any recommendation as to whether or not Holders should deliver Consents.  Each Holder must make its own decision as to whether or not to deliver Consents.

This communication does not constitute an offer to sell or the solicitation of an offer to buy any securities.

Energuate

Through two corporate entities, DEOCSA and DEORSA, Energuate is one of two large energy distributors in Guatemala and the largest distribution company in Central America measured by population served. The Parent Guarantors use the trade name "Energuate" for the collective distribution businesses of DEOCSA and DEORSA, but Energuate is not a legal entity. Energuate operates in 21 of Guatemala's 22 departments, distributing energy to a service area of 101,914 km² with approximately 11.8 million inhabitants. As of December 31, 2016, Energuate's service area represented approximately 93.6% of the country's territory in which approximately 72.8% of its total population resides. As of December 31, 2016, Energuate provided services to approximately 1.7 million regulated customers in Guatemala, which Energuate estimates represent approximately 56.0% of Guatemala's population and approximately 54.3% of Guatemala's regulated distribution customers. As of December 31, 2016, Energuate operated 70,380 km of distribution lines in Guatemala, representing approximately 83.1% of Guatemala's distribution lines. Energuate holds government authorizations to provide energy distribution services within its service area until 2048.

In the years ended December 31, 2016, 2015 and 2014, Energuate sold 2,316.4 GWh, 2,315.2 GWh and 2,184.1 GWh of energy, respectively, which represented approximately 21.2%, 21.3% and 21.5% of the energy purchased in Guatemala for such periods. Energuate purchases the energy it distributes to its customers principally through long-term PPAs with generation companies.  As of December 31, 2016, Energuate was party to 73 PPAs with 31 generators with a weighted average life of 12 years.

Energuate's principal executive offices are located at Diagonal 6 10-50 zona 10, Edificio Interamericas World Center, Torre Sur, Nivel 14, Of. 1401, Guatemala City, Guatemala, and its telephone number at that address is +502-2367-9300. Energuate's website is located at www.energuate.com. Energuate's website and the information contained therein or connected thereto are not incorporated into this press release.

The Sponsor

The Sponsor is an independent global infrastructure investment manager with approximately U.S.$9.4 billion in assets under management. The Sponsor has extensive experience and expertise in developing and operating energy and utility businesses and provides managerial expertise and technical support. The Sponsor has invested, and in some cases co-invested (with third parties, including investors in certain investment funds managed by the Sponsor), assets in Latin America, Asia, Europe and the United States with greater than 4,500 MW of installed capacity from hydropower and thermal generation, 740 km of transmission lines and natural gas processing facilities.

Forward-Looking Statements

This communication and statements made from time to time, other than historical facts, by the Parent Guarantors and their respective representatives constitute forward-looking statements within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995.  Readers are cautioned not to place undue reliance on these forward-looking statements and any such forward-looking statements are qualified in their entirety by reference to the following cautionary statements.  All forward-looking statements speak only as of the date hereof and are based on current expectations and involve a number of assumptions, risks and uncertainties that could cause the actual results to differ materially from such forward-looking statements.  Such statements are inherently subject to a variety of risks and uncertainties that could cause actual results to differ materially from those reflected in such forward-looking statements.  In addition, the forward-looking statements represent the Parent Guarantors' views as of the date on which such statements were made.  The Parent Guarantors anticipate that subsequent events and developments may cause their views to change.  However, although the Parent Guarantors may elect to update these forward-looking statements at some point in the future, they specifically disclaim any obligation to do so, whether as a result of new information, future events or other occurrences.  These forward-looking statements should not be relied upon as representing the Parent Guarantors' views as of any date subsequent to the date hereof.

SOURCE Intertrust SPV (Cayman) Limited