Foster Wheeler starts offer to exchange stock for $150 million of 10.359% notes

New York, Oct. 12 - Foster Wheeler Ltd. said it has begun its previously announced exchange in which it is offering stock for up to $150 million of its outstanding $261.5 million 10.359% senior secured notes due 2011.

The consent solicitation included in the offer ends at 5 p.m. ET on Oct. 27 and the exchange ends at 5 p.m. ET on Nov. 10.

As announced on Oct. 10, the Clinton, N.J.-based engineering and construction firm has entered into a lock-up agreement with holders of $133.5 million or 51.1% of the notes to participate in the exchange.

Under the terms of the offer, Foster Wheeler will exchange 40.179 shares for each $1,000 principal amount of the notes, including accrued interest.

The notes are currently callable at 113.1% of par plus accrued interest, Foster Wheeler noted. On Friday the notes were quoted at 112.5 and Foster Wheeler stock closed at $30.03.

Foster Wheeler also is soliciting consents to amend the note indenture to eliminate the restrictive covenants - but to leave the security and guarantees for the notes unchanged.

Holders who consent will receive a fee of $10 per $1,000 principal amount.

The consent solicitation is intended to give Foster Wheeler more financial and operating flexibility.

If the tender offer is oversubscribed, Foster Wheeler will first exchange notes tendered under the lock-up agreement and then others on a pro rata basis up to the $150 million limit.

Settlement of the exchange will be in two stages. For participants in the lock-up agreement, closing will be "promptly" after Oct. 27 with settlement four business days later, while for others it will be "promptly" after Nov. 10 with settlement four business days later. Any consent fees will be paid will be on the second settlement.

Foster Wheeler said the exchange will be accretive to earnings in 2006 and reduce the company's debt to its lowest level in more than 15 years.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.