Exchange Offer and Consent
Solicitation
Ferroglobe PLC (the “Parent”), Ferroglobe
Finance Company, PLC (the “UK Issuer”) and Globe Specialty Metals,
Inc. (“Globe” and, together with the UK Issuer, the “Issuers”) are
offering to qualifying noteholders the opportunity to exchange (the
“Exchange Offer”) any and all of the 9⅜% Senior Notes due 2022
issued by the Parent and Globe (the “Old Notes”) for a total
consideration per $1,000 principal amount of Old Notes comprising
(i) $1,000 aggregate principal amount of new 9⅜% senior secured
notes due 2025 to be issued by the Issuers (the “New Notes”) plus
(ii) a cash fee, which the Parent will, at the direction of the
qualifying noteholders (which direction shall be deemed to be given
by such qualifying noteholders participating in the Exchange Offer
and Consent Solicitation), apply as cash consideration for a
subscription of new ordinary shares of the Parent (the “Equity
Fee”), as set forth in the table below, or in any other manner that
the Ad Hoc Group (as defined below) may agree with the Parent.
Old Notes to be Exchanged |
Outstanding PrincipalAmount |
CUSIP Numbers and ISINs |
Total
ExchangeConsideration(1)(2) |
9⅜% Senior Notes due 2022 |
$350,000,000 |
144A: 315419 AA9 / US315419AA96Reg S: G33858 AA2 /
USG33858AA20 |
$1,000 principal amount of New Notes and the Equity Fee |
______________________________
(1) For each $1,000 principal
amount of Old Notes.
(2) The Equity Fee represents
the cash fee for each $1,000 principal amount of Old Notes, which
the Parent will, at the direction of the qualifying noteholders
(which direction shall be deemed to be given by such qualifying
noteholders participating in the Exchange Offer and Consent
Solicitation), apply as cash consideration for a subscription of
new ordinary shares of the Parent, to amount in aggregate to 1.75%
of the ordinary shares in the Parent after giving effect to the
Restructuring (as defined below), to be allotted proportionally
among the participating qualifying noteholders.
The Exchange Offer is being made pursuant to the
Offering and Consent Solicitation Memorandum dated June 23, 2021
(the “Offering and Consent Solicitation Memorandum”). The Exchange
Offer is scheduled to expire at 11:59 p.m., New York City time, on
July 21, 2021, unless extended (such time and date, as the same may
be extended, the “Expiration Date”). Qualifying noteholders who
validly tender and do not validly withdraw their Old Notes by the
Expiration Date will be eligible to receive the total exchange
consideration set forth in the table above. Qualifying noteholders
may withdraw tendered Old Notes at any time prior to the Expiration
Date but not thereafter. Qualifying noteholders who validly tender
their Old Notes will be deemed to have consented to the Proposed
Amendments (as defined below).
Concurrently with the Exchange Offer, the
Issuers are soliciting consents (the “Consents”) to certain
proposed amendments (the “Proposed Amendments”) to the indenture
governing the Old Notes (the “Old Notes Indenture”). The Proposed
Amendments will eliminate substantially all of the restrictive
covenants, all of the reporting covenants and certain of the events
of default in the Old Notes Indenture, if adopted. The Proposed
Amendments to the Old Notes will become effective upon execution of
a supplemental indenture to the Old Notes Indenture (the
“Supplemental Indenture”). Qualifying noteholders who validly
tender their Old Notes (and do not validly withdraw such tendered
Old Notes prior to the Expiration Date) will be deemed to have
delivered Consents to the Proposed Amendments with respect to the
entire principal amount of Old Notes tendered by such holders.
Holders may not deliver Consents without tendering their Old Notes
and holders may not tender their Old Notes without delivering
Consents. The consent solicitation with respect to the Proposed
Amendments to the Old Notes Indenture is referred to herein as the
“Consent Solicitation.”
The consummation of the Exchange Offer is
subject to satisfaction or waiver of certain conditions (the
“Exchange Offer Conditions”), including, among others, the receipt
of valid tenders of Old Notes, not withdrawn, and Consents, not
revoked, of not less than $335.72 million (or 95.92%) in principal
amount outstanding of the Old Notes in the Exchange Offer (the
“Minimum Participation Condition”). For the avoidance of doubt, the
Requisite Consents must be received from holders holding not less
than a majority of the then outstanding (as determined in
accordance with the Old Notes Indenture) aggregate principal amount
of the Old Notes in order to effect the Proposed Amendments in the
manner contemplated by the Consent Solicitation. The Exchange Offer
Conditions also include (i) the receipt of at least $40 million in
gross proceeds from the issuance and sale of new ordinary shares of
the Parent to investors (the “Equity Placement”) and (ii) the
receipt of at least $20 million in gross proceeds from the Super
Senior Notes Offer or from the backstop arrangement thereof
(together, the “Transaction Effective Date Condition”). The
Transaction Effective Date Condition may not be waived.
The Parent and the Issuers reserve the right,
subject to applicable law, at their option and in their sole
discretion to extend, reopen, amend or terminate the Exchange Offer
and the Consent Solicitation at any time as provided in the
Offering and Consent Solicitation Memorandum. Details of any such
extension, amendment or termination will be announced as provided
in the Offering and Consent Solicitation Memorandum as soon as
reasonably practicable after the relevant decision is made.
Super Senior Notes Offer
Concurrently with the Exchange Offer and Consent
Solicitation, the UK Issuer is offering to the existing holders of
the Old Notes the opportunity to subscribe to additional senior
secured notes due 2025 ($40 million of which in principal amount
was issued on May 17, 2021) (the “Super Senior Notes”) that is
equal to its pro rata share of the principal amount of all Old
Notes beneficially held by such noteholder as at July 7, 2021 (the
“Record Time”) (“Super Senior Notes Entitlement”). Pursuant to the
purchase agreement for the Super Senior Notes Offer available from
the Information Agent (the “Super Senior Notes Offer Purchase
Agreement”), a qualifying noteholder must, (A) by no later than
July 7, 2021 (the “Super Senior Notes Offer Subscription
Deadline”), (i) participate in the Exchange Offer and Consent
Solicitation with respect to all of its holdings by submitting
Custody Instructions on the Exchange Offer and the Consent
Solicitation; (ii) return to the information agent a duly executed
and completed account holder letter; (iii) and provide all relevant
KYC documentation required of it to the escrow agent; and (B) by no
later than July 22, 2021 (the “Super Senior Notes Escrow Funding
Deadline”), deposit the funds necessary for its proposed purchase
of Super Senior Notes with the Escrow Agent.
Series |
Offer Price |
Temporary ISIN andCommon
Codes(1) |
Permanent ISIN andCommon Codes |
9.0% Senior Secured Notes due 2025 |
100.0% |
To be provided by announcement subsequent to the date of the
Offering and Consent Solicitation Memorandum |
IAI: XS2344588509 / 234458850144A: XS2343568874 / 234356887Reg S:
XS2343568528 / 234356852 |
______________________________
(1) After one business day
following the settlement date, the ISINs and common codes will be
the permanent ISINs and common codes assigned for the $40 million
of Super Senior Notes issued on May 17, 2021.
Background and Rationale
Beginning in 2020, we engaged in discussions
with an ad hoc group of noteholders (the “Ad Hoc Group” and each
member of the Ad Hoc Group shall be an “Ad Hoc Group Member”) to
put forward a plan to refinance the Old Notes which mature in March
2022 and restructure our balance sheet. On March 27, 2021, the
Parent and Globe and certain other members of the group entered
into a lock-up agreement (the “Lock-Up Agreement”) with the Ad Hoc
Group, Grupo VM and Tyrus Capital that set forth a plan to
implement the restructuring. The plan to implement the
restructuring comprises the following three inter-conditional
transactions (together, the “Restructuring”):
- the issuance of
the Super Senior Notes;
- the issuance of
at least $40 million in new equity of Ferroglobe, which Ferroglobe
intends to accomplish pursuant to the Equity Placement; and
- the exchange by
way of this Exchange Offer of certain of the Old Notes for New
Notes with an extended maturity of December 31, 2025 and other
amended terms, and the amendment of any remaining Old Notes in
accordance with the Proposed Amendments through the Consent
Solicitation.
Neither the Exchange Offer, the Super Senior
Notes Offer nor the Equity Placement will be completed unless they
are all completed as part of the Transaction Effective Date steps.
While the Super Senior Notes Offer and the Equity Placement are
backstopped by the Ad Hoc Group and Tyrus, respectively, such
issuances are subject to certain conditions, and there can be no
assurance that the proposed Restructuring will be completed. To the
extent Ferroglobe does not achieve the threshold of Noteholder
acceptances of 95.92% in principal amount of the Old Notes required
for the Exchange Offer, it may extend the Exchange Offer in its
sole discretion. Noteholders holding approximately 97% in aggregate
principal amount of Old Notes have signed the Lock-Up Agreement to
support the Restructuring, but there can be no assurance that such
support will not be withdrawn or the Lock-Up Agreement terminated
prior to the implementation of the Restructuring or that, if
withdrawn or terminated, additional consents required to implement
the Restructuring will be obtained.
Indicative Timetable
Date |
Calendar Date |
Commencement Date |
June 23, 2021 |
Super Senior Notes Offer Subscription
Deadline |
July 7, 2021 |
Expiration Date |
11:59 p.m., New York City time, on July 21, 2021, unless
extended. |
Settlement Date |
July 29, 2021, unless extended, assuming all conditions to the
Exchange Offer, the Consent Solicitation and the Super Senior Notes
Offer have been satisfied or waived. |
The complete terms and conditions of the
Exchange Offer and the Consent Solicitation are described in the
Offering and Consent Solicitation Memorandum, copies of which may
be obtained by qualifying noteholders by contacting GLAS Trust
Company LLC, the information agent for the Exchange Offer, at: GLAS
Specialist Services Limited , 45 Ludgate Hill, London EC4M 7JU,
United Kingdom, email: tes@glas.agency
The New Notes and the New Notes guarantees and
the Super Senior Notes and the Super Senior Notes guarantees have
not been, and will not be, registered under the U.S. Securities Act
of 1933, as amended (the “Securities Act”) or the securities laws
of any other jurisdiction. The New Notes and the Super Senior Notes
may not be offered or sold within the United States except to an
institutional “Accredited Investor” within the meaning of Rule
501(a)(1), (2), (3), (7), (8), (9), (12) or (13) of Regulation D
under the Securities Act or a “qualified institutional buyer” as
defined in Rule 144A under the Securities Act in reliance on one or
more exemptions from the registration requirement under the
Securities Act or in offshore transactions in reliance on
Regulation S under the Securities Act.
Forward-Looking Statements
This release contains “forward-looking
statements” within the meaning of U.S. securities laws.
Forward-looking statements are not historical facts but are based
on certain assumptions of management and describe Issuers’ future
plans, strategies and expectations. Forward-looking statements
often use forward-looking terminology, including words such as
“anticipate”, “believe”, “could”, “estimate”, “expect”, “forecast”,
“guidance”, “intends”, “likely”, “may”, “plan”, “potential”,
“predicts”, “seek”, “will” and words of similar meaning or the
negative thereof.
Forward-looking statements contained in this
press release are based on information currently available to
Issuers and assumptions that management believe to be reasonable
but are inherently uncertain. As a result, Issuers’ actual results,
performance or achievements may differ materially from those
expressed or implied by these forward-looking statements, which are
not guarantees of future performance and involve known and unknown
risks, uncertainties and other factors that are, in some cases,
beyond Ferroglobe’s control.
All information in this press release is as of
the date of its release. Issuers do not undertake any obligation to
update publicly any of the forward-looking statements contained
herein to reflect new information, events or circumstances arising
after the date of this press release. You should not place undue
reliance on any forward-looking statements, which are made only as
of the date of this press release.
No offer
This press release is not an offer to sell or a
solicitation of an offer to buy or exchange or acquire securities
in the United States or in any other jurisdiction. The securities
referenced in this press release may not be offered, sold,
exchanged or delivered in the United States absent registration or
an applicable exemption from the registration requirement under the
Securities Act. This press release is not directed at, or intended
for distribution, publication, availability to or use by, any
person or entity that is a citizen or resident or located in any
locality, state, country or other jurisdiction, where such
distribution, publication, availability or use would be contrary to
law or regulation, or which would require any registration or
licensing within such jurisdiction.
INVESTOR CONTACT:
Gaurav Mehta
Executive Vice President - Investor
Relations
investor.relations@ferroglobe.com
MEDIA CONTACT:
Cristina Feliu Roig
Executive Director – Communications & Public
Affairs
corporate.comms@ferroglobe.com
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