Ferroglobe receives tenders for over 98% of notes in exchange offer

Chicago, July 22 – Ferroglobe plc announced the results of its exchange offer and consent solicitation for its 9 3/8% senior notes due 2022, according to a press release.

The company was offering to exchange each $1,000 of old 9 3/8% notes originally issued by Ferroglobe and Globe Specialty Metals Inc. (Cusips: G33858AA2, 315419AA9) for $1,000 principal amount of new notes due 2025 to be issued by Ferroglobe, Globe and Ferroglobe Finance Co. plc plus a cash fee, which will be applied as a cash consideration for a subscription of new ordinary shares of Ferroglobe plc, the parent.

The equity fee will be an aggregate 1.75% of the ordinary shares of the parent after giving effect to the restructuring, to be allotted proportionally among the participating qualifying noteholders.

Additionally, Ferroglobe Finance was offering existing noteholders an opportunity to subscribe to an add-on to senior secured notes due 2025, of which $40 million of original notes were issued on May 17.

As of the deadline at 11:59 p.m. ET on July 21, Ferroglobe received tenders from holders of $345,057,000 of the old notes, or 98.588% of the total outstanding.

Consent solicitation

With the exchange offer, the issuers were soliciting consents to certain proposed amendments for the old notes.

The proposed amendments will eliminate substantially all of the restrictive covenants, all of the reporting covenants and certain of the events of default in the old notes indenture, if adopted.

The proposed amendments to the old notes will become effective upon execution of a supplemental indenture to the old notes indenture.

Tendering noteholders were deemed to have given consent. Consents could not be delivered without tenders and vice versa.

The company received consents sufficient to approve the proposed amendments.

New notes offer

Existing noteholders could also subscribe to an add-on offering of new super senior notes in a pro rata amount to their share of the old notes.

The 9% senior secured add-on notes due 2025 will be issued at par.

Interested noteholders had to participate in the exchange offer and consent solicitation by July 7 and by no later than July 22 deposit the funds necessary for the proposed purchase of super senior notes to the escrow agent.

Ferroglobe received offers from qualifying noteholders for $22,017,916 in principal amount of additional senior secured notes due 2025.

Background

The offers are the result of discussions with an ad hoc group that started in 2020.

The super senior notes offering and the equity placement are backstopped by the ad hoc group and Tyrus Capital, respectively.

Noteholders holding approximately 97% in aggregate principal amount of notes signed the lock-up agreement to support the restructuring.

Conditions

The exchange offer was subject to the satisfaction or waiver of certain conditions, including the receipt of consents for at least 95.92%, or $335.72 million, of the old notes.

The conditions also include the receipt of at least $40 million in proceeds from the issuance and sale of new ordinary shares of the parent company to investors and the receipt of at least $20 million in proceeds from the super senior notes offer or from the backstop arrangement.

As of the exchange deadline, the company had received $5 million so far for the equity placement and the full $20 million in gross proceeds from the super senior notes offering.

Details

Settlement is planned for July 29.

GLAS Trust Co. LLC is the information agent for the exchange offer (tes@glas.agency).

Ferroglobe is a London-based supplier of silicon metal, silicon-based specialty alloys and ferroalloys.

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