Grupo TMM extends exchange offers for 9½% '03, 10¼% '06 notes

Grupo TMM SA said on Thursday (April 17) that it had extended its previously announced exchange offers to exchange new longer-maturity debt for all of its outstanding 9½% senior notes due later this year and its 10¼% senior notes due 2006.

The company said the offer had been extended to 5 p.m. ET on April 25, subject to possible further extension, from the previous April 17 deadline. The company said that it was extending the offer while it considered whether to amend it that in light of the pending sale of the company's interest in its ports and terminals division.

It said that as of 5 p.m. ET on April 17, approximately $51.447 million principal amount of the 9½% notes, or 29.09% of the outstanding amount, had been tendered and not withdrawn, while $171.372 million principal amount of the 10¼% notes, or 85.69% of the outstanding amount, had been tendered and not withdrawn. That represents a decrease in the amount of both series of notes tendered versus the previously announced tendered amounts ($61.289 million principal amount of the 9½% notes, or 34.65% of the outstanding amount, and $174.216 million principal amount of the 10¼% notes, or 87.11% of the outstanding amount).

While the condition that a majority of the 10¼% notes be tendered had been fulfilled, the revised minimum tender condition of 80% of the 9½% notes remained unmet.

Citigroup Global Markets (formerly Salomon Smith Barney Inc.) is acting as the dealer manager for the exchange offers and consent solicitations. Mellon Investor Services (call toll-free at 888 689-1607; banks and brokers call 917 320-6286) is the information agent.

AS PREVIOUSLY ANNOUNCED, Grupo TMM, a Mexico-City-based provider of land and ocean transportation services, said on Aug. 29 that it intended to offer to exchange new debt securities for all of its outstanding 9½% and 10¼% notes. It said the exchange offers would be undertaken consistent with its previously announced plan to extend the company's debt maturities and obtain additional financial flexibility.

TMM said that the terms of the planned exchange, including the interest rate of the new debt securities, had not been finalized, but it expected that the securities would be senior unsecured debt of Grupo TMM maturing in 2009. In addition, it said that the new debt securities would be guaranteed on a senior unsecured basis by TMM Holdings SA de CV, a newly-formed, wholly-owned subsidiary of Grupo TMM, which would indirectly hold all of its parent's approximately 51% voting and 38.4% effective economic interest in another subsidiary, Grupo TFM SA de CV, through which Grupo TMM conducts its rail operations.

Grupo TMM further said that in connection with the exchange offers, it expected to solicit consents from the holders of the outstanding 9½% and 10¼% notes, seeking to amend or eliminate certain of the covenants contained in the notes' indentures. It said that holders who tender notes and give their consents prior to the deadline that would be established for the consent solicitation would be entitled to receive a cash consent fee. The amendments would only become effective upon completion of the exchange offers and consent solicitations, which would be described in detail in the official offering material.

Grupo TMM did not initially set down a formal timetable for the proposed exchange offers and related consent solicitations, other than that the exchange offers would begin once the company has completed its regulatory filings and obtained all necessary governmental authorizations. The company said that it expected that the exchange offers to be completed early in the fourth quarter. Grupo TMM said it had filed a registration statement relating to the exchange offers with the U.S. Securities and Exchange Commission, and was expecting to commence the offers as soon as practicable after the registration statement was declared effective and it had obtained the necessary authorizations from the Comision Nacional Bancaria y de Valores de Mexico.

On Dec. 26, Grupo TMM said that it had begun its previously announced offers to exchange new, longer-maturity debt for all of its outstanding 9½% and 10¼% notes, and said the exchange offers would expire at 5 p.m. ET on Feb. 11, 2003 (this deadline was subsequently extended).

Grupo TMM said it would offer a like principal amount of its new 10¾% percent senior notes due 2009 for the existing notes; the new notes would be issued at the time the exchange offers close. They would be guaranteed on a senior unsecured basis by TMM Holdings, SA de CV.

The company said that concurrently with the exchange offers, it was also soliciting consents from holders of the existing notes for certain amendments which would eliminate certain restrictive covenants and amend certain other provisions of the respective indentures under which the existing notes were issued. Holders tendering their notes in the exchange offers would be considered to have given their consent to the proposed amendments applicable to the series of existing notes being tendered.

Subject to the terms and conditions contained in the prospectus and letter of transmittal related to the exchange offers and consent solicitations, Grupo TMM said it would pay a cash consent fee in an amount of US$5 per US$1,000 principal amount of existing notes validly tendered and not subsequently revoked by the consent payment deadline of 5 p.m. ET on Jan. 28, subject to possible extension.

The company said the obligation of Grupo TMM to consummate either exchange offer would be conditioned upon, among other things, receipt of valid and unrevoked tenders representing at least 85% of the outstanding principal amount of the 9½% notes and at least a majority of the outstanding principal amount of the 10¼% notes.

It said tenders and the related consents could not be withdrawn at any time after the consent payment deadline, unless that deadline were to be extended by Grupo TMM with respect to one or both series of existing notes.

On Feb. 12, Grupo TMM said that it had extended the expiration date of the offers to 5 p.m. ET on Feb. 18, subject to possible further extension, from the original Feb. 11 deadline. As of 5 p.m. ET on Feb. 11, $54.198 million of the 9½% notes, or approximately 30.64% of the outstanding amount, and $109.164 million of the 10¼% notes, or 54.58% of the outstanding amount, had been tendered and not withdrawn.

While that fulfilled the minimum tender condition of at least a majority of the 10¼% notes, the 85% minimum tender condition for the 9½% notes remained unmet at that time.

The company subsequently extended the expiration date of the offers several times; however, at each new expiration date, the minimum tender condition for the 9½% notes remained unmet, even after TMM had announced on Feb. 18 that it had reduced the minimum tender level for the 9½% notes to 80% from the original 85%.

Grupo TMM also said on Feb. 18 that it had amended the terms of the offers to include warrants to purchase American Depositary Shares of Grupo TMM as part of the consideration being offered to holders of the 9½% notes, and to offer all holders of the 9½% notes a consent fee of $5 per $1,000 principal amount of notes (rather than just those who had tendered by the now-expired Jan. 28 consent deadline). All other terms and conditions of the exchange offers and the consent solicitations would remain the same.

On Feb. 24, Grupo TMM, besides again extending the exchange offers, also supplied additional specific details of its previously announced proposed amendment to the economic terms of the offer for the 9½% notes, which were contained in a registration statement filed with the Securities and Exchange Commission. It said that it planned to offer 55 warrants (to purchase the company's American Depositary Shares) per $1,000 principal amount of the 9½% notes tendered and accepted for payment, in addition to the previously announced compensation.

It said that each warrant would be exercisable to purchase one ADS, representing one of the company's Series A Shares, at an exercise price of $9.00 per warrant, subject to certain adjustments, payable only by surrender of the new notes offered in the exchange offers (subject to limitations). If all of the 2003 notes were tendered and exchanged, the company would issue approximately 9.7 million ADSs. Unless exercised, the warrants will expire in 2010.

Grupo TMM said that the changes described in the new registration statement and the amendment would not be offered to holders and would not become a part of the existing exchange offers pending further action by Grupo TMM and the SEC to complete the new registration statement and have it declared effective by the commission.

On March 6, Grupo TMM, besides again extending the exchange offers (to 5 p.m. ET on March 20, subject to possible further extension), also said that the registration filed with the SEC amending the terms of the exchange offers and consent solicitations had become effective. The amendments allow the company to add warrants for its common stock to the compensation package it is offering to the 9½% noteholders to encourage their participation.

Grupo TMM again announced on March 21 that it had extended the exchange offers, setting 5 p.m ET on April 3 as the date, subject to possible further extension. As of the previous deadline on March 20, approximately $60.745 million principal amount of the 9½% notes, or 34.34% of the outstanding amount - still well under the 80% minimum tender threshhold - had been tendered and not withdrawn, while $172.141 million principal amount of the 10¼%, or 86.07% of the outstanding amount, representing a majority of the notes and meeting the minimum tender requirement, had been tendered and not withdrawn.

On April 4, TMM announced further extension of the offer, to 5 p.m. ET on April 17, subject to possible further extension. As of the old April 3 deadline, approximately $61.289 million principal amount of the 9½% notes, or 34.65% of the outstanding amount, had been tendered and not withdrawn - well below the required 80% minimum - while $174.216 million principal amount of the 10 ¼% notes, or 87.11% of the outstanding amount, had been tendered and not withdrawn, meeting the minimum tender requirement.

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