A.M. Castle & Co. (NYSE:CAS) (the “Company” or “Castle”), a global
distributor of specialty metal and plastic products, value-added
services and supply chain solutions, announced today that the
minimum participation condition has been satisfied in the Company’s
previously announced, private exchange offer and consent solicitation to
certain eligible holders (the “Exchange Offer”) relating to the exchange
of new 12.75% Senior Secured Notes due 2018 (the “New Notes”) for the
Company’s outstanding 12.75% Senior Secured Notes due 2016 (the
“Existing Notes”). According to D.F. King & Co., Inc., the exchange
agent for the Exchange Offer, as of 5:00 p.m. New York City time,
Friday, January 29, 2016, the early tender date and withdrawal deadline
(the “Early Tender Date”), holders of $122,193,000 aggregate principal
amount (or 66.96%) of the $182,500,000 aggregate principal amount of
Existing Notes eligible to participate in the consent solicitation
portion of the Exchange Offer have validly tendered and not withdrawn
consents with respect to certain amendments (the “Amendments”) to the
indenture governing the Existing Notes (the “Existing Indenture”).
An additional $27,500,000 aggregate principal amount of Existing Notes
presently owned by an affiliate of the Company, which were excluded from
the calculation of the results of the consent solicitation, have also
been validly tendered and not withdrawn in the Exchange Offer. In total,
holders of an aggregate of 70.42% of the outstanding Existing Notes have
validly tendered and not withdrawn their Existing Notes as of the Early
Tender Date. The Company has accepted for exchange all of the Existing
Notes that were validly tendered in the Exchange Offer as of the Early
Tender Date and expects to pay the Total Exchange Consideration (as
defined in the confidential offering memorandum and consent solicitation
statement dated January 15, 2016 (the “Confidential Offering
Memorandum”)) with respect to such Existing Notes on or about February
8, 2016 (the “Early Settlement Date”). Holders of Existing Notes may no
longer validly withdraw tenders of Existing Notes.
As a result of the Company receiving consents in excess of the 66 2/3%
of the outstanding Existing Notes eligible to participate in the consent
solicitation that were required to approve the Amendments, the Company
expects to promptly execute and deliver a supplemental indenture that
gives effect to the Amendments and will become operative upon the Early
Settlement Date. The Amendments provide for, among other things,
elimination of substantially all restrictive covenants and certain
events of default in the Existing Indenture and release of all the
collateral securing the Existing Notes.
President and CEO Steve Scheinkman commented, “We are pleased with the
results of the Exchange Offer to date and the strong support of our
refinancing plans evidenced by the noteholders electing to participate
as of the Early Tender Date. To ensure the fullest participation in the
Exchange Offer, we have decided to extend the deadline for noteholders
to receive the consent payment in connection with the Exchange Offer to
February 2, 2016.”
Scheinkman continued, “We believe completion of the Exchange Offer will
help us build on the momentum our operational restructuring progress has
produced to date. With the implementation of our operational
restructuring plan during the fourth quarter, our liquidity improved
with the benefit of planned inventory reductions and assets sales.
We believe that the Exchange Offer, when coupled with our
previously-announced plan to exchange our convertible notes in a
transaction that will immediately de-lever our balance sheet by up to
$17.25 million, and further reductions in our indebtedness through the
previously announced planned strategic sales of our Total Plastics, Inc.
subsidiary, as well as certain underperforming assets relating to the
energy sector, is a significant step in our comprehensive refinancing
plan.”
The Company also announced today that it has elected to extend the
deadline for eligible holders of Existing Notes to receive the consent
payment in connection with the Exchange Offer, and participate in the
early settlement, until 5:00 p.m., New York City time, on February 2,
2016 (the “Additional Consent Deadline”). The withdrawal deadline of the
Exchange Offer has not been extended. Holders who validly tender and do
not validly withdraw Existing Notes and deliver a valid consent on or
prior to the Additional Consent Deadline, unless further extended, are
now entitled to receive the Total Exchange Consideration. Holders of
Existing Notes validly tendered and not withdrawn prior to the
Additional Consent Deadline will receive the Total Exchange
Consideration on the Early Settlement Date. In addition, the Company has
extended the deadline for noteholders who are ineligible to participate
in the Exchange Offer to receive the consent payment in connection with
the separate consent solicitation to the same Additional Consent
Deadline. Holders who validly deliver a consent prior to the Additional
Consent Deadline will receive the consent payment on the Early
Settlement Date.
In furtherance of the Exchange Offer, the Company also announced that it
has now entered into additional Transaction Support Agreements (the
“Support Agreements”) such that holders of $142,510,000 aggregate
principal amount of its Existing Notes and $51,600,000 aggregate
principal amount, or 89.74%, of its 7.00% Convertible Senior Notes due
2017 (collectively, the “Supporting Holders”), are now party to Support
Agreements. As previously disclosed, the Support Agreements provide for
the terms of certain transactions to refinance the Company’s outstanding
public debt, including participation in the Exchange Offer.
The Company also announced that it has agreed to amend the Support
Agreements to add a covenant to the indenture governing the New Notes
for the benefit of holders of the New Notes that prohibits the Company,
following consummation of the Exchange Offer and the issuance of the New
Notes, from repaying or prepaying any remaining Existing Notes using
more than $10.0 million of borrowings under its senior credit facility
or any indebtedness that is secured by a lien that ranks higher in
priority than the liens securing the New Notes and the guarantees
thereof.
Except to the extent amended by this press release, the complete terms
and conditions of the Exchange Offer are set forth in the Confidential
Offering Memorandum. The Exchange Offer will expire at 11:59 p.m. New
York City time on February 12, 2016, unless extended.
The Exchange Offer is being made, and the New Notes will be issued, only
to holders of Existing Notes that are (i) “qualified institutional
buyers” as that term is defined in Rule 144A under the Securities Act,
or QIBs, in a private transaction in reliance upon an exemption from the
registration requirements of the Securities Act, (ii) institutional
investors which are “accredited investors” as defined in Rule 501(a)(1),
(2), (3), (7) or (8) under the Securities Act or (iii) not a “U.S.
Person” as that term is defined in Rule 902 under the Securities Act, in
offshore transactions in reliance upon Regulation S under the Securities
Act. Documents relating to the Exchange Offer will only be distributed
to holders of outstanding Existing Notes that have returned a
certification letter to us that they are eligible to participate in the
Exchange Offer.
Holders of outstanding Existing Notes who wish to receive a copy of the
eligibility letter for the Exchange Offer may contact D.F. King & Co.,
Inc. toll free at (800) 591-8269, (212) 269-5550 (banks and brokerage
firms), e-mail at cas@dfking.com or
via the following website: www.dfking.com/cas.
The New Notes will be subject to restrictions on transferability and
resale and may not be transferred or resold except in compliance with
the registration requirements of the Securities Act or pursuant to an
exemption therefrom and in compliance with other applicable securities
laws.
This press release is not an offer to sell, nor a solicitation of an
offer to buy, the New Notes in the United States or elsewhere. The New
Notes have not been registered under the Securities Act and may not be
offered or sold in the United States absent registration or an
applicable exemption from the registration requirements of the
Securities Act. The Exchange Offer is made only by, and pursuant to, the
terms set forth in the related offering memorandum and consent
solicitation. The Exchange Offer is not being made to persons in any
jurisdiction in which the making or acceptance thereof would not be in
compliance with the securities, blue sky or other laws of such
jurisdiction.
About A. M. Castle & Co.
Founded in 1890, A. M. Castle & Co. is a global distributor of specialty
metal and plastic products and supply chain services, principally
serving the producer durable equipment, oil and gas, commercial
aircraft, heavy equipment, industrial goods, construction equipment,
retail, marine and automotive sectors of the global economy. Its
customer base includes many Fortune 500 companies as well as thousands
of medium and smaller-sized firms spread across a variety of industries.
Within its metals business, it specializes in the distribution of alloy
and stainless steels; nickel alloys; aluminum and carbon. Through its
wholly-owned subsidiary, Total Plastics, Inc., the Company also
distributes a broad range of value-added industrial plastics. Together,
Castle and its affiliated companies operate out of 42 service centers
located throughout North America, Europe and Asia. Its common stock is
traded on the New York Stock Exchange under the ticker symbol “CAS”.
Cautionary Statements Regarding Forward-Looking Information
Information provided and statements contained in this release that are
not purely historical are forward-looking statements within the meaning
of Section 27A of the Securities Act, Section 21E of the Securities
Exchange Act of 1934, as amended (“Exchange Act”), and the Private
Securities Litigation Reform Act of 1995. Such forward-looking
statements only speak as of the date of this release and the Company
assumes no obligation to update the information included in this
release. Such forward-looking statements include information concerning
our possible or assumed future results of operations, including
descriptions of our business strategy, and the cost savings and other
benefits that we expect to achieve from our facility closures and
organizational changes. These statements often include words such as
“believe,” “expect,” “anticipate,” “intend,” “predict,” “plan,”
“should,” or similar expressions. These statements are not guarantees of
performance or results, and they involve risks, uncertainties, and
assumptions. Although we believe that these forward-looking statements
are based on reasonable assumptions, there are many factors that could
affect our actual financial results or results of operations and could
cause actual results to differ materially from those in the
forward-looking statements, including our ability to effectively manage
our operational initiatives and restructuring activities, the impact of
volatility of metals and plastics prices, the cyclical and seasonal
aspects of our business, our ability to effectively manage inventory
levels, our ability to successfully complete our strategic refinancing
process, and the impact of our substantial level of indebtedness, as
well as including those risk factors identified in Item 1A “Risk
Factors” of our Annual Report on Form 10-K for the fiscal year ended
December 31, 2014. All future written and oral forward-looking
statements by us or persons acting on our behalf are expressly qualified
in their entirety by the cautionary statements contained or referred to
above. Except as required by the federal securities laws, we do not have
any obligations or intention to release publicly any revisions to any
forward-looking statements to reflect events or circumstances in the
future, to reflect the occurrence of unanticipated events or for any
other reason.
View source version on businesswire.com: http://www.businesswire.com/news/home/20160201005394/en/
Copyright Business Wire 2016