Warrior Met Coal, Inc. (NYSE:HCC) (“Warrior” or the “Company”)
today announced the commencement of its offer to purchase (the
“Restricted Payment Offer”), in cash, up to $150,000,000 principal
amount of the Company’s outstanding 7.875% Senior Secured Notes due
2028 (the “Notes”), at a repurchase price of 103% of the aggregate
principal amount of such Notes, plus accrued and unpaid interest
with respect to such Notes to, but not including, the date of
repurchase (the “Restricted Payment Repurchase Price”).
Concurrently with, but separate from, the Restricted Payment
Offer, the Company announced the commencement of a cash tender
offer (the “Tender Offer” and, together with the Restricted Payment
Offer, the “Offers”) to purchase up to $150,000,000 principal
amount of the Notes at a repurchase price of 104.25% of the
aggregate principal amount of such Notes, plus accrued and unpaid
interest to, but not including, the date of repurchase (the “Tender
Offer Repurchase Price”).
The Restricted Payment Offer and Tender Offer are two
separate offers. Notes validly tendered in the Restricted Payment
Offer (and not validly withdrawn) may not be tendered in the Tender
Offer, and Notes validly tendered in the Tender Offer (and not
validly withdrawn) may not be tendered in the Restricted Payment
Offer.
The Restricted Payment Offer
The Restricted Payment Offer will expire at 5:00 P.M. New York
City time, on September 7, 2023 (such date and time, the
“Expiration Date”), and the date of repurchase will be September 8,
2023 (the “RP Repurchase Date”).
Summary of Restricted Payment
Offer:
CUSIPs
Title of Security
Principal Amount Outstanding
Automatic Pro Ration Factor
Applied to Principal Amount of Notes Tendered(1)
Maximum Face Amount of RP Pro-
Rated Tendered Notes to be Repurchased(1)
Restricted Payment Repurchase
Price(2)
93627C AB7 (144A);
U93537 AC9 (Reg S)
7.875% Senior Secured Notes due
2028
$302,618,000
49.5674%
$150,000,000
$1,030.00
(1) For each $1,000 principal amount of Notes tendered in the
Restricted Payment Offer, an automatic pro ration factor of
49.5674% shall apply regardless of the principal amount of Notes
tendered by Holders (as defined below) in the aggregate in the
Restricted Payment Offer. If the aggregate principal amount of
Notes tendered in the Restricted Payment Offer is less than
$302,618,000, then the Company will repurchase less than
$150,000,000 aggregate principal amount of Notes in the Restricted
Payment Offer. (2) For each $1,000 principal amount of RP Pro-Rated
Tendered Notes (as defined below), excluding accrued but unpaid
interest, which interest will be paid in addition to the Restricted
Payment Repurchase Price.
The Company is making the Restricted Payment Offer pursuant to
the indenture governing the Notes (the “Indenture”), which provides
that, prior to declaring or making any Restricted Payment (as
defined in the Indenture), in reliance on the definition of
Cumulative Credit (as defined in the Indenture) or in reliance on
the Company’s pro forma Total Indebtedness Leverage Ratio (as
defined in the Indenture), the Company shall commence an offer to
repurchase an aggregate principal amount of the Notes equal to the
amount of such proposed Restricted Payment. The Company is
therefore making the Restricted Payment Offer in accordance with
the terms of the Indenture prior to declaring or making the
Proposed Restricted Payment (as defined below).
Under the Restricted Payment Offer, the Company is offering to
repurchase from holders of the Notes (each a “Holder” and,
collectively, the “Holders”) their pro rata portion of up to
$150,000,000 principal amount of Notes. As of the date hereof, the
aggregate principal amount of Notes outstanding is $302,618,000. As
a result:
(1) an automatic pro ration factor of
49.5674% shall apply to the principal amount of Notes tendered
(rounded down to avoid the purchase of Notes in a principal amount
other than in integrals of $1,000) (the “RP Pro-Rated Tendered
Notes”), and the Company will accept the RP Pro-Rated Tendered
Notes for payment of the Restricted Payment Repurchase Price in
cash; and
(2) the remaining balance of the principal
amount of the Notes tendered that are not RP Pro-Rated Tendered
Notes will not be accepted for payment by the Company and will be
returned to the tendering Holder on the RP Repurchase Date.
Upon the terms and subject to the conditions of the Restricted
Payment Offer and subject to applicable law, the Company will
accept for payment all RP Pro-Rated Tendered Notes validly tendered
(and not validly withdrawn) on or prior to the Expiration Date in
the Restricted Payment Offer at the Restricted Payment Repurchase
Price.
Pursuant to the Indenture, each Holder will have the right to
decline the purchase of its pro rata portion of Notes in the
Restricted Payment Offer (the aggregate principal amount of such
Notes that decline, the “Declined Amounts”). Any Declined Amounts
may be retained by the Company and used for any purpose not
otherwise prohibited by the Indenture, including the making of
Restricted Payments (as defined in the Indenture) with such
Declined Amounts, at any time and from time to time, without having
to make another offer to repurchase an aggregate principal amount
of the Notes equal to the amount of such proposed Restricted
Payment.
In no event will the Company repurchase any amount of Notes from
any Holder in excess of the RP Pro-Rated Tendered Notes tendered by
such Holder. The automatic pro ration factor of 49.5674% shall
apply to the principal amount of Notes tendered by each Holder
regardless of the principal amount of Notes tendered by Holders in
the aggregate in the Restricted Payment Offer. If the aggregate
principal amount of Notes tendered in the Restricted Payment Offer
is less than $302,618,000, then the Company will repurchase less
than $150,000,000 aggregate principal amount of Notes in the
Restricted Payment Offer. Additionally, in such event, there will
be Declined Amounts equal to the difference between $150,000,000
and the amount of RP Pro-Rated Tendered Notes repurchased in the
Restricted Payment Offer.
For example, if the principal amount of Notes tendered is
$302,618,000, the Company will repurchase $150,000,000 of principal
amount of RP Pro-Rated Tendered Notes in the Restricted Payment
Offer and there will be no Declined Amounts. If the principal
amount of Notes tendered is $200 million, the Company will
repurchase approximately $99 million of principal amount of RP
Pro-Rated Tendered Notes in the Restricted Payment Offer and
approximately $51 million will be the Declined Amounts.
Notes that are tendered in the Restricted Payment Offer may be
withdrawn at any time prior to the Expiration Date.
Holders should note that the Tender Offer Repurchase Price is
higher than the Restricted Payment Repurchase Price. The
procedures for tendering Notes in the Tender Offer and the
Restricted Payment Offer are separate. Notes validly tendered (and
not validly withdrawn) in the Tender Offer may not be tendered in
the Restricted Payment Offer, and Notes validly tendered (and not
validly withdrawn) in the Restricted Payment Offer may not be
tendered in the Tender Offer. The Restricted Payment Offer is not
conditioned upon the Tender Offer and the Tender Offer is not
conditioned on the Restricted Payment Offer. The Company may
determine, in its sole discretion, to terminate, abandon, fail to
consummate, postpone or amend the Tender Offer without terminating,
postponing or amending the Restricted Payment Offer.
This announcement does not constitute an offer to buy or the
solicitation of an offer to sell Notes in any circumstances in
which such offer or solicitation is unlawful, and does not
constitute an offer, solicitation or sale in any state or
jurisdiction in which such offer, solicitation or sale is unlawful.
The Restricted Payment Offer is being made only by means of the
Restricted Payment Notice and Offer to Purchase (the “Restricted
Payment Offer Document”), which contains the complete terms and
conditions of the Restricted Payment Offer. The Restricted Payment
Offer is subject to the satisfaction or waiver of certain
conditions, as set forth in the Restricted Payment Offer Document.
Holders should carefully read the Restricted Payment Offer Document
before any decision is made with respect to the Restricted Payment
Offer.
D.F. King & Co., Inc. has been appointed as the Tender Agent
and Information Agent (the “RP Tender Agent”) with respect to the
Restricted Payment Offer. Any questions or requests for assistance
or copies of the Restricted Payment Offer Documents may be directed
to the RP Tender Agent at (212) 269-5550 (collect) or (800)
431-9645 (toll free), or email at hcc@dfking.com. Any beneficial
owner owning interests in Notes may contact such beneficial owner’s
broker, dealer, commercial bank, trust company or other nominee for
assistance concerning the Restricted Payment Offer. Neither Goldman
Sachs & Co. LLC nor any other investment bank has been engaged
or will act as dealer manager (or any equivalent role or function)
for the Restricted Payment Offer.
No recommendation is made by the Company or the RP Tender Agent
as to whether or not Holders should tender their Notes pursuant to
the Restricted Payment Offer. Holders must make their own decision
as to whether to tender any of their Notes in the Restricted
Payment Offer and, if so, the principal amount of Notes to
tender.
The Company is making the Restricted Payment Offer so that upon
consummation of the Restricted Payment Offer the Company will have
the ability from time to time in the future to make one or more
restricted payments (the “Proposed Restricted Payment”) in the form
of special dividends to holders of the Company’s common stock
and/or repurchases of the Company’s common stock in the aggregate
amount of $150,000,000 (subject to increase for the amount of any
Declined Amounts), consistent with the terms of the Capital
Allocation Policy adopted by board of directors of the Company. Any
future Proposed Restricted Payments will be at the discretion of
the board of directors of the Company and subject to a number of
factors and there can be no assurance that the Company will make
any Proposed Restricted Payments in the future.
The Tender Offer
The Tender Offer will expire at the Expiration Date, and the
date of repurchase is expected to be September 11, 2023 (the “TO
Repurchase Date”).
Summary of Tender Offer:
CUSIPs
Title of Security
Principal Amount Outstanding
Automatic Pro Ration Factor
Applied to Principal Amount of Notes Tendered(1)
Maximum Face Amount of TO Pro-
Rated Tendered Notes to be Repurchased(1)
Tender Offer Repurchase
Price(2)
93627C AB7 (144A);
U93537 AC9 (Reg S)
7.875% Senior Secured Notes due
2028
$302,618,000
49.5674%
$150,000,000
$1,042.50
(1) For each $1,000 principal amount of
Notes tendered in the Tender Offer, an automatic pro ration factor
of 49.5674% shall apply regardless of the principal amount of Notes
tendered by Holders in the aggregate in the Tender Offer. If the
aggregate principal amount of Notes tendered in the Tender Offer is
less than $302,618,000, then the Company will repurchase less than
$150,000,000 aggregate principal amount of Notes in the Tender
Offer.
(2) For each $1,000 principal amount of TO
Pro-Rated Tendered Notes (as defined below), excluding accrued but
unpaid interest, which interest will be paid in addition to the
Tender Offer Repurchase Price.
Under the Tender Offer, the Company is offering to repurchase
from Holders their pro rata portion of up to $150,000,000 principal
amount of Notes. As of the date hereof, the aggregate principal
amount of Notes outstanding is $302,618,000. As a result:
(1) an automatic pro ration factor of
49.5674% shall apply to the principal amount of Notes tendered in
the Tender Offer (rounded down to avoid the purchase of Notes in a
principal amount other than in integrals of $1,000) (the “TO
Pro-Rated Tendered Notes”), and the Company will accept the TO
Pro-Rated Tendered Notes for payment of the Tender Offer Repurchase
Price in cash; and
(2) the remaining balance of the principal
amount of the Notes tendered that are not TO Pro-Rated Tendered
Notes will not be accepted for payment by the Company and will be
returned to the tendering Holder on or promptly after the TO
Repurchase Date.
Upon the terms and subject to the conditions of the Tender Offer
and subject to applicable law, the Company will accept for payment
all TO Pro-Rated Tendered Notes validly tendered (and not validly
withdrawn) on or prior to the Expiration Date in the Tender Offer
at the Tender Offer Repurchase Price.
For example, if the principal amount of Notes tendered is
$302,618,000, the Company will repurchase $150,000,000 of principal
amount of TO Pro-Rated Tendered Notes in the Tender Offer. If the
principal amount of Notes tendered is $200 million, the Company
will repurchase approximately $99 million of principal amount of TO
Pro-Rated Tendered Notes in the Tender Offer. The aggregate
principal amount of TO Pro-Rated Tendered Notes will, by virtue of
the fact that they are not being tendered into the Restricted
Payment Offer, constitute Declined Amounts under the Indenture.
Notes that are tendered in the Tender Offer may be withdrawn at
any time prior to the Expiration Date. The Company reserves the
right to terminate, withdraw or amend the Tender Offer at any time,
subject to applicable law.
In no event will the Company repurchase any amount of Notes from
any Holder in excess of the TO Pro-Rated Tendered Notes tendered by
such Holder. The automatic pro ration factor of 49.5674% shall
apply to the principal amount of Notes tendered by each Holder
regardless of the principal amount of Notes tendered by Holders in
the aggregate in the Tender Offer. If the aggregate principal
amount of Notes tendered in the Tender Offer is less than
$302,618,000, then the Company will repurchase less than
$150,000,000 aggregate principal amount of Notes in the Tender
Offer.
Holders should note that the Tender Offer Repurchase Price is
higher than the Restricted Payment Repurchase Price. The
procedures for tendering Notes in the Tender Offer and the
Restricted Payment Offer are separate. Notes validly tendered in
the Tender Offer (and not validly withdrawn) may not be tendered in
the Restricted Payment Offer, and Notes validly tendered in the
Restricted Payment Offer (and not validly withdrawn) may not be
tendered in the Tender Offer. The Tender Offer is not conditioned
upon the Restricted Payment Offer and the Restricted Payment Offer
is not conditioned on the Tender Offer. Subject to applicable law,
the Company reserves the right, in its sole discretion, to (a)
terminate, postpone or extend the Tender Offer if the Restricted
Payment Offer is terminated, abandoned, postponed, extended or
amended for any reason and (b) terminate, postpone or amend the
Tender Offer without terminating, postponing or amending the
Restricted Payment Offer.
This announcement does not constitute an offer to buy or the
solicitation of an offer to sell Notes in any circumstances in
which such offer or solicitation is unlawful, and does not
constitute an offer, solicitation or sale in any state or
jurisdiction in which such offer, solicitation or sale is unlawful.
The Tender Offer is being made only by means of the Offer to
Purchase (the “Tender Offer Document”) which contains the complete
terms and conditions of the Tender Offer. The Tender Offer is
subject to the satisfaction or waiver of certain conditions, as set
forth in the Tender Offer Document. Holders should carefully read
the Tender Offer Document before any decision is made with respect
to the Tender Offer.
D.F. King & Co., Inc. has been appointed as the Tender Agent
and Information Agent (the “TO Tender Agent”) with respect to the
Tender Offer. Any questions or requests for assistance or copies of
the Tender Offer Documents may be directed to the TO Tender Agent
at (212) 269-5550 (collect) or (800) 431-9645 (toll free), or email
at hcc@dfking.com. Any beneficial owner owning interests in Notes
may contact such beneficial owner’s broker, dealer, commercial
bank, trust company or other nominee for assistance concerning the
Tender Offer. Goldman Sachs & Co. LLC will act as Dealer
Manager for the Tender Offer. Questions regarding the Tender Offer
may be directed to Goldman Sachs & Co. LLC at (212) 902-5962
(collect) or (800) 828-3182 (toll free), or email at
GS-LM-NYC@gs.com.
No recommendation is made by the Company, the TO Tender Agent or
the Dealer Manager as to whether or not Holders should tender their
Notes pursuant to the Tender Offer. Holders must make their own
decision as to whether to tender any of their Notes in the Tender
Offer and, if so, the principal amount of Notes to tender.
About Warrior Met Coal
Warrior is a U.S.-based, environmentally and socially minded
supplier to the global steel industry. It is dedicated entirely to
mining non-thermal met coal used as a critical component of steel
production by metal manufacturers in Europe, South America and
Asia. Warrior is a large-scale, low-cost producer and exporter of
premium met coal, also known as hard-coking coal (HCC), operating
highly efficient longwall operations in its underground mines based
in Alabama. The HCC that Warrior produces from the Blue Creek coal
seam contains very low sulfur, has strong coking properties and is
of a similar quality to coal referred to as the premium HCC
produced in Australia. The premium nature of Warrior’s HCC makes it
ideally suited as a base feed coal for steel makers and results in
price realizations near the Platts Index price. For more
information, please visit www.warriormetcoal.com.
Forward-Looking Statements
This press release contains forward-looking statements within
the meaning of within the meaning of U.S. federal securities laws.
All statements, other than statements of historical facts, included
in this press release that address activities, events or
developments that the Company expects, believes or anticipates will
or may occur in the future are forward-looking statements. The
words “believe,” “expect,” “anticipate,” “plan,” “intend,”
“estimate,” “project,” “target,” “foresee,” “should,” “would,”
“could,” “potential,” or other similar expressions are intended to
identify forward-looking statements. However, the absence of these
words does not mean that the statements are not forward-looking.
These forward-looking statements represent management’s good faith
expectations, projections, guidance or beliefs concerning future
events, and it is possible that the results described in this press
release will not be achieved. Specifically, the Company cannot
assure you that the proposed transactions described above,
including the successful completion of the Offers or that any
Restricted Payments, whether in the form of special dividends
and/or repurchases of the Company’s common stock, will be
consummated or, in the case of the Tender Offer, made on the terms
the Company currently contemplates, if at all. Information
concerning these and other factors can be found in the Company’s
filings with the U.S. Securities and Exchange Commission (“SEC”),
including its Annual Report on Form 10-K for the year ended
December 31, 2022, Quarterly Reports on Form 10-Q for the quarterly
periods ended March 31, 2023 and June 30, 2023 and other reports
filed from time to time with the SEC. The Company’s filings with
the SEC are available on the SEC’s website at www.sec.gov.
Any forward-looking statement speaks only as of the date on
which it is made, and, except as required by law, the Company does
not undertake any obligation to update or revise any
forward-looking statement, whether as a result of new information,
future events or otherwise. New factors emerge from time to time,
and it is not possible for the Company to predict all such
factors.
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version on businesswire.com: https://www.businesswire.com/news/home/20230809344943/en/
For Investors: Dale W. Boyles, 205-554-6129
dale.boyles@warriormetcoal.com
For Media: D’Andre Wright, 205-554-6131
dandre.wright@warriormetcoal.com
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