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14 Jan 2011 07:00
Consent Solicitation of OAO TMK in relation toTMK Capital S.A.'s outstanding U.S.$600,000,000 10.00% Loan Participation Notesdue 2011 (ISIN: XS0373732063)(of which U.S.$186,700,000 is currently outstanding)
14 January 2011
On 13 January 2011 OAO TMK ("TMK") announced its invitation to Noteholders of TMK Capital S.A.'s U.S.$600,000,000 10.00% Loan Participation Notes due 2011 (the "Notes") issued by TMK Capital S.A. (the "Issuer") and unconditionally and irrevocably guaranteed by OAO Volzhsky Pipe Plant, ZAO TMK Trade House, OAO Seversky Tube Works, OAO Sinarsky Pipe Plant, OAO Taganrog Metallurgical Works and IPSCO Tubulars Inc. to vote in respect of an Extraordinary Resolution in respect of their Notes (the "Consent Solicitation"), subject to the terms and conditions set out in the Consent Solicitation Memorandum dated 13 January 2011 (the "Consent Solicitation Memorandum").
Background
The Consent Solicitation is being undertaken to modify certain covenants contained in the Loan Agreement as set out below under "Proposals relating to the Notes" to continue TMK's current growth strategy and further enhance its flexibility to implement its refinancing plan in respect of TMK's existing indebtedness.
Proposals relating to the Notes
The Issuer is seeking approval by way of Extraordinary Resolution of the Noteholders to amend the definitions of Permitted Indebtedness and Refinancing Indebtedness (each as defined in the Loan Agreement) in Clause 1.1 of the Loan Agreement.
Amendment to Permitted Indebtedness
To allow TMK to continue to execute its previously announced capital improvement plan (including purchasing and installing equipment for use in the business of the Group), TMK is seeking to increase the aggregate principal amount of indebtedness permitted under paragraph (i) of the definition of Permitted Indebtedness (as defined in the Loan Agreement) that may be incurred by the Borrower or a Subsidiary of the Borrower from U.S.$100 million to U.S.$270 million.
Amendment to Refinancing Indebtedness
In order to give it greater refinancing flexibility, TMK wishes to lengthen the period of time for "Refinancing Indebtedness" (as defined in the Loan Agreement) to be incurred either before or after the existing indebtedness being refinanced is retired. TMK is seeking to extend the refinancing period from 5 to 30 Business Days (as defined in the Loan Agreement).
Assuming the passing of the Extraordinary Resolution, the Proposal will be binding on all Noteholders, including those Noteholders who do not consent to the Proposal.
Consent Solicitation
The Consent Solicitation will provide that Noteholders may vote in respect of the Extraordinary Resolution by submitting a valid Consent Instruction at any time during the Offer Period.
Subject to the passing of the Extraordinary Resolution, (i) Noteholders who deliver a Consent Instruction voting in favour of the Extraordinary Resolution (and do not validly withdraw or revoke it on or prior to the Expiration Time and ensure that it remains in full force and effect until the conclusion of the Meeting) on or prior to the Early Consent Deadline of 4.00 p.m. (London Time) on 21 January 2011, will receive the Early Consent Fee of U.S.$250 per U.S.$ 100,000 principal amount of Notes on the Payment Date and (ii) Noteholders who deliver a Consent Instruction voting in favour of the Extraordinary Resolution (and do not validly withdraw or revoke it on or prior to the Expiration Time and ensure that it remains in full force and effect until the conclusion of the Meeting) after the Early Consent Deadline and on or prior to the Expiration Time of 4.00 p.m. (London Time) on 2 February 2011, will receive the Late Consent Fee of U.S.$100 per U.S.$ 100,000 principal amount of Notes on the Payment Date.
It is a condition to TMK's obligation to pay or procure the payment of the Early Consent Fee or the Late Consent Fee, as the case may be, in respect of Notes subject to a Consent Instruction that the Extraordinary Resolution is passed and becomes effective in accordance with its terms. Such condition is waivable at the discretion of TMK.
Noteholders who submit Consent Instructions after the Early Consent Deadline will not be eligible to receive the Early Consent Fee and Noteholders will not be eligible to receive either the Early Consent Fee or the Late Consent Fee if they vote against the Extraordinary Resolution, vote other than by delivery of a valid Consent Instruction, if they do not vote at all or if they revoke their instructions or unblock their Notes.
Noteholders may submit a Consent Instruction with respect to their Notes in accordance with the terms and conditions set out herein. TMK reserves the right to reject, in its sole discretion, any votes in favour received in breach of the conditions. Noteholders wishing to vote at the meeting outside the terms of the Consent Solicitation must do so by 4.00 p.m. on 2 February 2011 in accordance with the procedures set out in the Trust Deed and the Notice of Meeting. Meeting of Noteholders
The Noteholders Meeting shall take place at the offices of Linklaters LLP, One Silk Street, London, EC2Y 8HQ at 4.00 p.m. (London Time) on 4 February 2011.
Indicative Timetable
Event | Date |
Launch Date Early Consent Deadline | 13 January 2011 4.00 p.m. (London time), 21 January 2011 |
Expiration Time | 4.00 p.m. (London time), 2 February 2011 |
Noteholders Meeting | 4.00 p.m. (London time), 4 February 2011 |
Announcement of results | 7 February 2011 (or as soon as reasonably practicable after the Noteholder Meeting) |
Payment Date | Expected to be no later than five Business Days following the announcement of the results of the Noteholder Meeting |
Capitalised terms used in this announcement have the meanings ascribed to them in the Consent Solicitation Memorandum.
For further information:
A complete description of the terms and conditions of the Proposals will be set out in the Consent Solicitation Memorandum. Further details on the transaction can be obtained from:
The Joint Solicitation Agents
Barclays Bank PLC5 The North ColonnadeCanary WharfLondon E14 4BBUnited Kingdom | Deutsche Bank AG, London BranchWinchester House1 Great Winchester StreetLondon EC2N 2DBUnited Kingdom | UBS Limited1 Finsbury AvenueLondon EC2M 2PPUnited Kingdom |
For information by telephone: +44 20 7773 8990Attention: Liability Management GroupEmail: eu.lm@barcap.com | For information by telephone: +44 20 7545 8011Attention: Liability Management GroupEmail: liability.management@db.com | For information by telephone: +44 20 7567 0525Attention: Liability Management GroupEmail: mark-t.watkins@ubs.com |
The Tabulation Agent
Lucid Issuer Services Limited |
Attention: Lee PellicciTel: +44 20 7704 0880tmk@lucid-is.com |
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DISCLAIMER
None of TMK, the Issuer, the Joint Solicitation Agents or the Tabulation Agent or the Trustee or any of their respective directors, employees or affiliates takes any responsibility for the contents of this announcement. This announcement must be read in conjunction with the Consent Solicitation Memorandum. This announcement and the Consent Solicitation Memorandum contain important information which should be read carefully before any decision is made in connection with the Proposals. If you are in any doubt as to the action you should take, you are recommended to seek your own financial advice immediately including as to any tax consequences, from your stockbroker, bank manager, solicitor, accountant or other independent financial adviser authorised under the Financial Services and Markets Act 2000 (if in the United Kingdom) or other appropriately authorised financial advisor. Any individual or company whose Notes are held on its behalf by a broker, dealer, bank, custodian, trust company or other nominee must contact such entity if it wishes to vote in respect of the Proposals.
This Announcement does not constitute an offer to purchase Notes. This Announcement does not constitute a solicitation of an offer to sell Notes in any jurisdiction.
The distribution of this Announcement in certain jurisdictions is restricted by law. Persons into whose possession this Announcement comes are required by TMK, the Issuer, the Joint Solicitation Agents and the Tabulation Agent to inform themselves about, and to observe, any such restrictions.
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