FOR IMMEDIATE RELEASE
Owens-Illinois, Inc. (“O-I” or the “Company”) today announced
that the Board of Directors of the Company has authorized the
commencement of consent solicitations to amend and waive certain
provisions in the indentures governing the outstanding senior notes
issued by certain of the Company’s subsidiaries and an amendment to
the Company’s bank credit agreement. The purpose of the consent
solicitations and bank credit agreement amendment is to facilitate
the implementation of the Corporate Modernization (as defined
below), which, if implemented, would be expected to be completed by
the end of 2019.
The Company believes that the Corporate Modernization would
improve the Company’s operating efficiency and cost structure,
while ensuring the Company remains well-positioned to address its
legacy liabilities.
It is not expected that the Corporate Modernization would result
in any change in the public company’s directors, executive
officers, management or business, impact the timing of the
declaration and payment of regular quarterly dividends, nor, from a
credit perspective, affect cash flow support from subsidiaries or
change the credit group for purposes of the senior notes issued by
the Company's subsidiaries or the bank credit agreement. It is
intended that the Corporate Modernization, if implemented, should
be a tax-free transaction for U.S. federal income tax purposes for
O-I and O-I’s stockholders.
The Corporate Modernization, if implemented, would include the
creation of a new holding company, O-I Glass, Inc. (“O-I Glass”),
which would become the new parent company of O-I, replacing O-I as
the public company trading on the New York Stock Exchange under
O-I’s current ticker symbol, “OI,” and the automatic conversion of
each outstanding share of O-I’s common stock into the right to
receive a share of common stock of O-I Glass on a one-for-one basis
(the “Reorganization”). Following the Reorganization, the old
parent company would distribute the capital stock of Owens-Illinois
Group, Inc. (“OI Group”) to O-I Glass, as a result of which OI
Group would be a direct wholly owned subsidiary of O-I Glass (the
“Distribution” and, together with the Reorganization and related
transactions, the “Corporate Modernization”).
Consent Solicitations
The Company announced that its wholly owned subsidiaries
Owens-Brockway Glass Container Inc. (“OBGC”) and OI European Group
B.V. (“OIEG” and, together with OBGC, the “Issuers”), commenced
consent solicitations with respect to proposed amendments and
waivers to certain provisions in the indentures governing OBGC’s
5.000% Senior Notes due 2022, OBGC’s 5.875% Senior Notes due 2023,
OBGC’s 5.375% Senior Notes due 2025, OBGC’s 6.375% Senior Notes due
2025, OIEG’s 4.875% Senior Notes due 2021, OIEG’s 4.000% Senior
Notes due 2023 and OIEG’s 3.125% Senior Notes due 2024
(collectively, the “Notes”), upon the terms and subject to the
conditions set forth in the consent solicitation statement dated
December 4, 2019 (“Consent Solicitation Statement”).
Subject to the terms and conditions set forth in the Consent
Solicitation Statement, holders of Notes on December 3, 2019 whose
consents are received (and not validly revoked) at or prior to 5:00
p.m., New York City time, on December 11, 2019 (unless extended or
earlier terminated, the “Expiration Time”) will be eligible to
receive the applicable consent fee (each, a “Consent Fee”) with
respect to such Notes set forth in the tables below.
OBGC Notes |
CUSIP/ISIN |
Consent Fee per US$1,000
Principal Amount |
Outstanding Principal Amount |
5.000% Senior Notes due 2022 |
CUSIP 690872 AA4 (144A)U6S19G AB3 (Reg S) ISIN US690872AA43 (144A)
USU6S19GAB37 (Reg S) |
US$2.50 |
US$500 million |
5.875% Senior Notes due 2023 |
CUSIP 69073T AR4 (144A)U68337 AK7 (Reg S) ISIN US69073TAR41
(144A)USU68337AK75 (Reg S) |
US$2.50 |
US$700 million |
5.375% Senior Notes due 2025 |
CUSIP 690872 AB2 (144A)U6S19G AC1 (Reg S) ISIN US690872AB26
(144A)USU6S19GAC10 (Reg S) |
US$2.50 |
US$300 million |
6.375% Senior Notes due 2025 |
CUSIP 69073T AS2 (144A)U68337 AL5 (Reg S) ISIN US69073TAS24
(144A)USU68337AL58 (Reg S) |
US$2.50 |
US$300 million |
OIEG Notes |
CUSIP/ISIN |
Consent Fee per
€1,000 or US$1,000
Principal Amount (as
applicable) |
Outstanding Principal Amount |
4.875% Senior Notes due 2021 |
ISIN XS0908232134 (144A)XS0908230781 (Reg S) |
€2.50 |
€1181 million |
4.000% Senior Notes due 2023 |
CUSIP 67777L AC7 (144A)N6704R AH4 (Reg S) ISIN US67777LAC72
(144A)USN6704RAH41 (Reg S) |
US$2.50 |
US$310 million |
3.125% Senior Notes due 2024 |
ISIN XS1405766038 (144A)XS1405765907 (Reg S) |
€2.50 |
€725 million |
The proposed amendments and waivers relate to, but are not
conditioned upon, the implementation of the Corporate Modernization
discussed above. The Issuers are soliciting consents to amend and
waive certain provisions in the indentures governing the Notes in
order to facilitate the implementation of the Corporate
Modernization.
Adoption of the proposed amendments and waivers with respect to
each indenture governing the Notes is conditioned upon receipt of
valid consents from the holders of at least a majority in aggregate
principal amount of holders under each applicable indenture (the
“Requisite Consents”) at or prior to the Expiration Time, as
described in the Consent Solicitation Statement.
A supplemental indenture to each applicable indenture
implementing the proposed amendments and waivers will be executed
promptly upon receipt of the Requisite Consents under each
applicable indenture, at which time such supplemental indenture
will become effective. Upon the proposed amendments and waivers
becoming effective and operative, all the holders of the applicable
series of Notes and their respective transferees will be bound by
the terms thereof, even if they did not deliver consents to the
proposed amendments and waivers.
The consent solicitations are being made solely on the terms and
subject to the conditions set forth in the Consent Solicitation
Statement. The Issuers may terminate, extend or amend the consent
solicitation with respect to any applicable indenture, as described
in the Consent Solicitation Statement, which is available on the
consent website: https://sites.dfkingltd.com/oi. Each of the
consent solicitations is conditioned, among other things, on the
consummation of the other consent solicitations (except to the
extent any other consent solicitation has been terminated or
abandoned by the relevant Issuer) and the consummation of the
amendment to the bank credit agreement.
The Issuers have retained Wells Fargo Securities, LLC as the
solicitation agent (the “Solicitation Agent”) with respect to the
Consent Solicitations. Questions may be directed to Wells Fargo
Securities at (866) 309-6316 (toll free) or (704) 410-4759
(collect). The Issuers have also appointed D.F. King as information
and tabulation agent (the “Information and Tabulation Agent”) with
respect to the Consent Solicitations. Questions and requests for
additional documents may be directed to D.F. King at (866) 342-1635
(US toll free), or +1 (212) 269-5550 (bankers and brokers), in the
United States, +44 20 7920 9700 in the United Kingdom, or via email
at oi@dfking.com.
Beneficial owners of an interest in the Notes whose Notes are
held through a broker, dealer, commercial bank, trust company or
other nominee should note that their nominee may establish a
deadline earlier than the applicable Expiration Time by which
instructions must be received by them in relation to the applicable
consent solicitation and, accordingly, such beneficial owners are
urged to contact their nominees as soon as possible to learn of any
deadlines established by their nominees in relation to the
applicable consent solicitation.
None of O-I, OI Group, the Issuers, the Solicitation Agent or
the Information and Tabulation Agent makes any recommendations as
to whether or not holders should consent to the proposed amendments
and waivers pursuant to the consent solicitations. Each holder must
make its own decision as to whether to consent to the proposed
amendments and waivers.
This announcement is neither an offer to purchase nor a
solicitation of an offer to sell the Notes and is not a
solicitation of consents to the proposed amendments and waivers
with respect to the relevant indentures. The consent solicitations
are being made solely on the terms and subject to the conditions
set forth in the Consent Solicitation Statement. The solicitation
of consents is not being made in any jurisdiction in which, or to,
or from any person to or from whom, it is unlawful to make such
solicitation under applicable state or foreign securities or “blue
sky” laws.
This announcement contains inside information by
the Company and OI European Group B.V. under Regulation (EU)
596/2014 (16 April 2014).
###
About O-I
At Owens-Illinois, Inc. (NYSE: OI), we love
glass and we’re proud to make more of it than any other glass
bottle or jar producer in the world. We love that it’s beautiful,
pure and completely recyclable. With global headquarters in
Perrysburg, Ohio, we are the preferred partner for many of the
world’s leading food and beverage brands. Working hand and hand
with our customers, we give our passion and expertise to make their
bottles iconic and help build their brands around the world. With
more than 26,500 people at 78 plants in 23 countries, O-I has a
global impact, achieving revenues of $6.9 billion in 2018. For more
information, visit o-i.com.
### Forward-Looking Statements
This press release contains “forward-looking” statements within
the meaning of Section 21E of the Securities Exchange Act of 1934,
as amended (the “Exchange Act”) and Section 27A of the Securities
Act of 1933. These forward-looking statements relate to a variety
of matters, including, without limitation, statements regarding the
approval, consummation and potential impact of the Corporate
Modernization. Forward-looking statements reflect the Company’s
current expectations and projections about future events at the
time, and thus involve uncertainty and risk. The words “believe,”
“expect,” “anticipate,” “will,” “could,” “would,” “should,” “may,”
“plan,” “estimate,” “intend,” “predict,” “potential,” “continue,”
and the negatives of these words and other similar expressions
generally identify forward-looking statements.
It is possible that the Company’s future financial performance
may differ from expectations due to a variety of factors including,
but not limited to the following: (1) the anticipated timing of the
implementation and consummation of the Corporate Modernization, (2)
the potential impact of the Corporate Modernization on the
Company’s branding and business, (3) the potential costs of the
Corporate Modernization, (4) the Company’s ability to manage its
cost structure, including its success in implementing restructuring
or other plans aimed at improving the Company’s operating
efficiency and working capital management, achieving cost savings,
and remaining well-positioned to address the Company’s legacy
liabilities, (5) the Company’s ability to acquire or divest
businesses, acquire and expand plants, integrate operations of
acquired businesses and achieve expected benefits from
acquisitions, divestitures or expansions, (6) the Company’s ability
to achieve its strategic plan, (7) foreign currency fluctuations
relative to the U.S. dollar, (8) changes in capital availability or
cost, including interest rate fluctuations and the ability of the
Company to refinance debt at favorable terms, (9) the general
political, economic and competitive conditions in markets and
countries where the Company has operations, including uncertainties
related to Brexit, economic and social conditions, disruptions in
the supply chain, competitive pricing pressures, inflation or
deflation, and changes in tax rates and laws, (10) the Company’s
ability to generate sufficient future cash flows to ensure the
Company’s goodwill is not impaired, (11) consumer preferences for
alternative forms of packaging, (12) cost and availability of raw
materials, labor, energy and transportation, (13) consolidation
among competitors and customers, (14) unanticipated expenditures
with respect to data privacy, environmental, safety and health
laws, (15) unanticipated operational disruptions, including higher
capital spending, (16) the Company’s ability to further develop its
sales, marketing and product development capabilities, (17) the
failure of the Company’s joint venture partners to meet their
obligations or commit additional capital to the joint venture, (18)
the ability of the Company and the third parties on which it relies
for information technology system support to prevent and detect
security breaches related to cybersecurity and data privacy, (19)
changes in U.S. trade policies, and the other risk factors
discussed in the Company’s Annual Report on Form 10-K for the year
ended December 31, 2018 and any subsequently filed Quarterly
Reports on Form 10-Q or the Company’s other filings with the
Securities and Exchange Commission.
SOURCE: Owens-Illinois, Inc.
For further information, please contact:
Chris Manuel Vice President, Investor Relations 567-336-2600
chris.manuel@o-i.com
1 Represents the aggregate principal amount of outstanding OIEG
4.875% 2021 Notes as of the date hereof. On November 22, 2019, OIEG
redeemed €212 million aggregate principal amount of the €330
million aggregate principal amount of OIEG 4.875% 2021 Notes
outstanding prior to such partial redemption. As a result, a pool
factor of 35.757575759% applies to the OIEG 4.875% 2021 Notes, and
the relevant Consent Fee payable with respect to the OIEG 4.875%
2021 Notes shall be based on the amount of outstanding OIEG 4.875%
2021 Notes after giving effect to such pool factor.
- O-I Announces Commencement of Consent Solicitations and Process
to Amend Bank Credit Agreement Related to Corporate
Modernization
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