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Gerdau Ameristeel launches tender for Chaparral Steel's 10% notes
By Jennifer Chiou
New York, Aug. 30 - Gerdau Ameristeel Corp. announced the start of a cash tender offer for any and all of Chaparral Steel Co.'s 10% senior notes due 2013.
The company also is soliciting consents to amend the note indenture to eliminate substantially all of the restrictive covenants and certain of the events of default, as well as modify certain other provisions.
On July 11, Chaparral agreed to be acquired by Gerdau Ameristeel for $86.00 per share in cash in a deal valued at $4.22 billion.
The consent deadline is 5 p.m. ET on Sept. 14. The offer expires at 5 p.m. ET on Sept. 28.
For each $1,000 principal amount of notes, the company will pay the present value of $1,050, the redemption amount on the notes' first call date of July 15, 2009, plus accrued interest to the same date, discounted using the 3.625% Treasury due July 15, 2009 and a fixed spread of 50 basis points as well as any accrued interest to the settlement date.
Those who tender by the early deadline will receive an included payment of $30.00.
Pricing will be determined at 2 p.m. ET on Sept. 14.
J.P. Morgan Securities Inc. is the dealer manager (call collect 212 270-1477). Global Bondholder Services Corp. is the information agent and depositary (call collect 212 430-3774 or 866 952-220).
Chaparral is a Midlothian, Texas-based company that produces structural steel beams and supplies steel bar products.
Gerdau Ameristeel, a subsidiary of Gerdau SA, is based in Tampa, Fla., and operates as a minimill steel producer through its subsidiaries.
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