Accuride settles fight over warrant exercise price, notes redemption

By Caroline Salls

Pittsburgh, Jan. 25 - Accuride Corp. requested court approval of a settlement agreement with its plan of reorganization supporting noteholders and backstop investors that would resolve disputes surrounding the exercise price of new warrants to be issued to equity holders under the plan and a new convertible notes redemption feature, according to a Friday filing with the U.S. Bankruptcy Court for the District of Delaware.

Specifically, Accuride said the plan term sheet stated that the warrants would be exercisable at a price of 110% of par. However, the company said the noteholders and backstop investors were not able to agree on language for calculating the exercise price.

In addition, the company said it asked the parties to allow the new notes to be issued under the plan to be redeemable by Accuride at any time on or after the third anniversary of the issuance at a price equal to 100% of the principal amount of the notes, plus interest accrued up to the redemption date.

In addition, Accuride said it asked the parties to set conditions on redemption, including that the company's new common stock be listed on a national security exchange, that the average weekly trading price during the four-week period before conversion of the notes be at least 3% of the total number of outstanding shares immediately before conversion and that the stock closing price be at least 2.25 times the conversion price for 20 of the preceding 30 consecutive trading days.

The company said the optional redemption provision would allow it to redeem the notes in full and would free it from restrictive covenants that would limit the reorganized company's ability to grow and realize greater market value during the 10-year life of the notes.

Accuride said the supporting noteholders and backstop investors did not agree to the redemption provision.

Under the settlement, the exercise price of the warrants has been set at $2.15, and the noteholders and investors have agreed to the proposed notes redemption provision.

Accuride, an Evansville, Ind.-based manufacturer and supplier of commercial vehicle components, filed for bankruptcy on Oct. 8. Its Chapter 11 case number is 09-13449.

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