Pequiven Launches Tender Offer for All Outstanding 8.29% Secured Bonds Due 2020 Issued by FertiNitro Finance Inc.

CARACAS, Venezuela, Nov. 22, 2011 /PRNewswire/ -- Petroquimica de Venezuela, S.A. (Pequiven) ("Pequiven") today announced that it has launched a tender offer and consent solicitation for any and all of the outstanding 8.29% Secured Bonds due 2020 issued by FertiNitro Finance Inc. (the "Issuer") in connection with the FertiNitro fertilizer project (the "Bonds").  Pursuant to the tender offer, Pequiven is offering to purchase any and all of the Bonds for cash and is also soliciting consents to amend and terminate certain agreements entered into at the time of the issuance of the Bonds (the "Proposed Amendments") and to release and discharge all of the security interests created under the agreements, including the collateral securing the Bonds (the "Security Release").  The Proposed Amendments and the Security Release require the consent of holders of more than 75% of the outstanding aggregate principal amount of the Bonds (the "Requisite Consents").  The aggregate outstanding principal amount of the Bonds as of the date hereof is $238 million.

The tender offer and consent solicitation are scheduled to expire immediately after 11:59 p.m., New York City time, on December 20, 2011 (the "Original Expiration Date"), subject to extension or earlier termination at Pequiven's option (as it may be extended, the "Expiration Date").  Tendered Bonds may be withdrawn until the withdrawal deadline, which will be 5:00 p.m., New York City time, on December 6, 2011 (the "Early Tender Date"), subject to extension or earlier termination at Pequiven's option.  Tendered Bonds may not be withdrawn thereafter unless required by law or as otherwise provided pursuant to the Lock-Up Agreement.

Holders that tender their Bonds and deliver their consents prior to the Early Tender Date will receive total consideration of $1,049.70 per $1,000 original principal amount of Bonds accepted for purchase, plus accrued and unpaid interest.  Holders of Bonds that tender their Bonds and deliver their consents after the Early Tender Date but on or prior to the Expiration Date will receive $1,000 per $1,000 original principal amount of Bonds accepted for purchase, plus accrued and unpaid interest.  Due to scheduled amortization payments, as of the date of this Offer there is $952.00 in principal amount of the Notes outstanding for each $1,000 original principal amount of the Notes. 

The settlement date for Bonds validly tendered and not validly withdrawn prior to the Early Tender Date will occur no later than three business days after the Early Tender Date (the "Initial Settlement Date").  Pequiven currently anticipates that the Initial Settlement Date will occur on or about December 9, 2011. For Bonds validly tendered after the Early Tender Date and prior to the Original Expiration Date, the settlement date will occur promptly after the Original Expiration Date.  If Pequiven determines to extend the Original Expiration Date, Pequiven may have an additional settlement date with respect to Bonds accepted for purchase after the Original Expiration Date but on or prior to the Expiration Date.

As previously announced, holders of approximately 79% in aggregate principal amount of the Bonds (the "Lock-Up Holders") have entered into a Lock-Up Agreement with Pequiven (the "Lock-Up Agreement"), pursuant to which the Lock-Up Holders have agreed to tender all of their Bonds on or prior to the Early Tender Date, including Bonds they subsequently acquire.  

Holders may not tender their Bonds in the tender offer without delivering their consent to the Proposed Amendments and the Security Release, and holders may not deliver their consent to the Proposed Amendments and the Security Release without tendering their Bonds pursuant to the tender offer.  If the Requisite Consents are obtained and the Proposed Amendments are adopted and the Security Release occurs, substantially all of the restrictive covenants and certain events of default governing the Bonds will be eliminated, and all of the collateral securing the Bonds will be released.

Pequiven or its affiliate's obligation to consummate the tender offer will be subject to the satisfaction of certain conditions, including the condition that Bonds representing more than seventy-five percent (75%) of the principal amount of all Bonds outstanding have been tendered in the tender offer. 

Notice to Investors

This press release is not an offer to purchase or a solicitation of consents with respect to the Bonds.  The tender offer and consent solicitation is being made solely by the Offer to Purchase and Consent Solicitation Statement, dated November 22, 2011 (the "Offer to Purchase"), and the related Consent and Letter of Transmittal (the "Letter of Transmittal"), which set forth the complete terms of the tender offer and consent solicitation.

For a complete statement of the terms and conditions of the tender offer and consent solicitation, the Proposed Amendments and the Security Release, holders of the Bonds should refer to the Offer to Purchase, which is being sent to all holders of record of the Bonds.  Questions concerning the terms of the tender offer and consent solicitation should be directed to the Information Agent at (800) 829-6554.

Holders of Bonds may obtain copies of the Offer to Purchase and the related Letter of Transmittal from the Information Agent.

None of Pequiven, the Issuer, the Information Agent or the trustee under the indenture governing the Bonds, or any of their affiliates, nor any other party, makes any recommendation as to whether holders of the Bonds should tender them or deliver the related consents or refrain from doing so, and no one has been authorized to make such a recommendation.

About Pequiven

Pequiven is a corporation (sociedad anonima) organized under the laws of Venezuela and is wholly-owned by Venezuela.  Pequiven and its predecessor entity have operated for over 30 years in many aspects of the petrochemical business.  Pequiven is organized into three business units: (i) fertilizers, (ii) olefins and plastics, and (iii) industrial products.  Pequiven's fertilizer group is responsible for the production, marketing and distribution of various fertilizer products, with a current overall installed capacity of nitrogen-based fertilizers of approximately 1.97 million metric tons per year and an expected overall installed capacity of nitrogen-based fertilizers for 2013 of approximately 2.6 million metric tons per year. 

Forward-Looking Statements

This press release contains forward-looking statements.  Pequiven may also make forward-looking statements orally from time to time.  Other than statements of historical facts, all statements that address activities, events or developments that are intended, expected, projected, believed or anticipated or that will or may occur in the future are forward-looking statements.  The expressions "will," "may," "designed to," "outlook," "foresees," "believes," "will continue," "should," "anticipates," "plans," "expects," "intends," "estimates," "projects," "positioned," "strategy," and similar expressions or the negatives thereof or other variations on these expressions, or similar terminology, or discussions of strategy, plans or intentions identify these forward-looking statements.  Because these forward-looking statements are also subject to risks and uncertainties, actual results may differ materially from the expectations expressed in the forward-looking statements.  Pequiven undertakes no obligation to update or revise these forward-looking statements to reflect subsequent events or circumstances.

These statements are based on assumptions and assessments made by Pequiven's management in light of their experience and their perception of historical trends, current conditions, expected future developments and other factors they believe to be appropriate.  These forward-looking statements are subject to a number of inherent risks and uncertainties, including factors that Pequiven's management has not yet identified.  Any such forward-looking statements are not guarantees of future performance or actual results.  A number of important factors could cause actual results to differ materially from those contained in any forward-looking statements.  Forward-looking statements speak only as of the date they are made, and Pequiven does not undertake, and specifically disclaims, any obligation to revise any forward-looking statements to reflect the occurrence of anticipated or unanticipated events or circumstances after the date such forward-looking statements are made.  Holders of Bonds should evaluate any statements made by or on behalf of Pequiven or its representatives in light of these important considerations and the factors contained in the section entitled "Certain Significant Considerations" in the Offer to Purchase.

SOURCE Pequiven