Metalsa, S.A. de C.V. Announces Commencement Of Consent Solicitation For Its 4.90% Senior Notes Due 2023

MONTERREY, Mexico, June 14, 2019 /PRNewswire/ -- Metalsa, S.A. de C.V. (the "Company") announced today that it has commenced a solicitation (the "Solicitation") of consents (the "Consents") 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"), dated as of June 14, 2019, to the Proposed Amendments (the "Proposed Amendments") to the Indenture, dated as of April 24, 2013 among the Company, the Note Guarantors party thereto, as guarantors (the "Note Guarantors"), Wilmington Trust, National Association, as trustee, registrar, paying agent and transfer agent (the "Trustee"), and Wilmington Trust SP Services (Luxembourg) S.A., as Luxembourg paying agent and Luxembourg transfer agent (as amended, supplemented and modified, the "Indenture"), governing its 4.90% Senior Notes due 2023 (the "Notes"). 

The Proposed Amendments would (i) amend the Indenture to provide an exception from  the merger and sale covenant (Section 5.01) for Metalsa Beteiligungs GmbH and Metalsa Automotive GmbH (as successors in interest of Metalsa Germany GMBH and Metalsa Zweite Beteiligungs GmbH) (collectively, the "German Note Guarantors") and (ii) amend the covenant in the Indenture providing for additional note guarantees (Section 10.06) so that the Company will only be required to add any future significant subsidiary as a subsidiary guarantor to the extent necessary to satisfy the guarantee requirement (the "Guarantee Requirement"), which will consist of the Company and the subsidiary guarantors representing at least 80% of the Company's consolidated EBITDA after giving effect to the acquisition, creation or capitalization of such future significant subsidiary.  These changes would offer the Company greater flexibility in exploring strategic options with regard to its body and chassis division and in managing its overall product portfolio.  The Proposed Amendments will be effected by a supplemental indenture to the Indenture (the "Second Supplemental Indenture") that is described in more detail in the Statement.

The Solicitation will expire at 5:00 p.m., New York City time, on June 27, 2019, 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") prior to the Expiration Time (which Consents have not been properly revoked prior to the earlier of (i) the date on which the Second Supplemental Indenture is executed and (ii) the Expiration Time (the "Consent Date")).

In the event that each of the conditions to the Solicitation described in the Statement is satisfied or waived by the Company, including, but not limited to, the receipt of the Requisite Consents, the Company will pay to each holder of record of Notes as of 5:00 p.m., New York City time, on June 13, 2019 (each such holder, a "Holder"), who has delivered a valid Consent in respect of such Notes prior to the Expiration Time (and has not properly revoked such Consent prior to the Consent Date), US$2.50 in cash for each US$1,000 principal amount of such Notes in respect of which a valid Consent was so delivered (and was not properly revoked) (the "Consent Fee").  The Company will pay the Consent Fee promptly, which is expected to be no later than two business days following the Expiration Time as described in the Statement.  The Proposed Amendments will not become operative unless and until the Company has (i) consummated the Consent Solicitation, (ii) paid the Consent Fee to each Holder entitled thereto, and (iii) confirmed to the Trustee in writing that the Consent Fee has so been paid.  Holders of Notes for which no Consent is delivered prior to the Expiration Time (or Notes for which a valid Consent is delivered, but such Consent is validly revoked prior to the Consent Date), will not receive a Consent Fee, even though the Second Supplemental Indenture and the Proposed Amendments, once operative, will bind all Holders and their transferees.  The Solicitation may be abandoned or terminated after the Expiration Time and prior to the Proposed Amendments becoming operative, in the Company's sole discretion, whether or not the Requisite Consents have been received.

If the Requisite Consents are received on or prior to the Expiration Time, the Company intends to promptly execute the Second Supplemental Indenture.  If the Proposed Amendments are approved, the Second Supplemental Indenture is entered into by the Company, the Note Guarantors and the Trustee, and all of the conditions to the Solicitation are satisfied or waived by the Company, the Second Supplemental Indenture will become operative and will bind all Holders of the Notes, including those that did not give their Consent.  If the Requisite Consents are not received prior to the Expiration Time, the Proposed Amendments will not be adopted and the Consent Fee will not be paid.

The Company has engaged BofA Securities, Inc. 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 BofA Securities, Inc. at (888) 292-0070  (toll-free) or (646) 855-8998  (collect).  Requests for documents relating to the Solicitation may be directed to D.F. King & Co., Inc. at (877) 536-1559 (toll free), (212) 269-5550 (banks and brokers) or email: [email protected].

This press release is for informational purposes only and the Solicitation is only being made pursuant to the terms of the Statement.  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 Consent.  None of the Company, 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 its Consent.

Neither the Statement nor any documents related to the Solicitation have been filed with, and have not been approved or reviewed by any federal or state securities commission or regulatory authority of any country. No authority has passed upon the accuracy or adequacy of the Statement or any documents related to the Solicitation, and it is unlawful and may be a criminal offense to make any representation to the contrary.

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

Forward-Looking Statements

Some of the statements in this press release constitute forward-looking statements within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995.  Words such as "believe", "anticipate", "plan", "expect", "intend", "target", "estimate", "project", "forecast", "guideline", "should" and similar expressions are intended to identify forward-looking statements but are not the exclusive means of identifying those statements.  Specific forward-looking statements include, among others, statements as to the Proposed Amendments and the expected payment of the Consent Fee. 

You should not place undue reliance on forward-looking statements, which are based on current expectations. Forward-looking statements are not guarantees of performance.  No assurance can be given that the transactions described herein will be consummated or as to the ultimate terms of any such transactions.  They involve risks, uncertainties and assumptions. All forward-looking statements in this press release are made as of the date hereof, based on information available to us as of such date, and we assume no obligation to update any forward-looking statement.

SOURCE Metalsa, S.A. de C.V.