Chile’s Automotores Gildemeister offers to exchange 2021, 2023 notes for new notes, warrants

By Marisa Wong

Los Angeles, Oct. 1 – Automotores Gildemeister SpA said it has begun an exchange offer and consent solicitation for any and all of its outstanding 8¼% senior unsecured notes due 2021, 6¾% senior unsecured notes due 2023 and 7½% senior secured notes due 2021.

The company is offering to exchange the existing notes for up to $544,566,522 of new 7½% senior secured notes, which will be secured by the collateral that secures the existing secured notes as well as additional collateral; up to 336,599 new series A warrants that, if 100% of the existing senior secured notes are tendered in the exchange offer, will be exercisable for voting common stock equal to 13.16% of the company’s common stock on a fully diluted basis; and up to 501,651 new series B warrants that, if 100% of the existing senior secured notes are tendered in the offer, will be exercisable for non-voting common stock equal to 19.61% of the company’s common stock on a fully diluted basis.

Specifically, holders who tender their existing notes at or prior to 5 p.m. ET on Oct. 14, the early tender date, will be eligible to receive in exchange for each $1,000 principal amount of existing notes the following total exchange considerations:

• For the existing senior secured notes, $1,000 principal amount of new notes, consisting of $950 principal amount of new notes plus and early tender consideration of $50 principal amount of new notes, plus accrued interest on the existing notes through and including the settlement date to be paid in cash, 0.653 new series A warrants and 0.974 new series B warrants;

• For the 2021 unsecured notes, $1,000 principal amount of new notes, consisting of $950 principal amount of new notes plus and early tender consideration of $50 principal amount of new notes, plus accrued interest on the existing notes through and including the settlement date to be paid in cash; and

• For the 2023 notes, $1,000 principal amount of new notes, consisting of $950 principal amount of new notes plus and early tender consideration of $50 principal amount of new notes, plus accrued interest on the existing notes through and including the settlement date to be paid in cash.

Holders who tender their notes after the early tender deadline will be eligible to receive the applicable total consideration less the early tender consideration.

In addition, the company is seeking consents from holders of the existing senior secured notes to amend or waive provisions of the indenture governing those notes. The purpose of the solicitation is to eliminate most restrictive covenants, some affirmative covenants and some events of default and modify some conditions on acceleration and rescissions of acceleration applicable to the existing senior secured notes and to release the liens on assets that currently secure the notes.

The exchange offer and consent solicitation will expire at 5 p.m. ET on Oct. 29.

Holders representing more than 75% of the aggregate outstanding principal amount of the existing senior secured notes have entered into a support agreement committing to tender their notes in the exchange offer and consent solicitation, the company said.

In the event the support agreement is terminated prior to completion of the offer and solicitation, holders may withdraw their tenders up to the expiration date.

The exchange offer and consent solicitation are conditioned on the company receiving tenders of at least 99% of the aggregate outstanding principal amount of the existing senior secured notes.

The Rule 144A, Regulation S and Regulation D exchange offer and consent solicitation are being launched in advance of the Dec. 31 expiration of the company’s distribution agreement with Hyundai Motor Co. Closing of the exchange offer and solicitation is conditioned on Hyundai indicating its intention to renew the distribution agreement on terms no less favorable to the company than the current distribution agreement.

Automotores Gildemeister is a Santiago, Chile-based vehicle importer and distributor primarily in Chile and Peru.

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