Kemet cuts minimum tender terms for $175 million 2.25% convertibles

By Susanna Moon

Chicago, June 22 - Kemet Corp. said it again reduced the minimum tender condition for its 2.25% convertible senior notes due 2026, this time to $87.5 million principal amount, or 50%, of the outstanding notes, from $122.5 million, or 70%, of the outstanding notes.

The company decreased the minimum tender condition on June 8 from $166.25 million, or 95%, of the notes.

As of 11:59 p.m. ET on June 19, investors had tendered $90,417,000 principal amount of the notes, up from $211,000 of the convertibles on June 5.

The company also extended the tender offer deadline for its $175 million principal amount of 2.25% convertibles to 11:59 p.m. ET on June 26 from June 19.

The company said that, after these changes, it would not make any more revisions to the tender offer.

Also on June 8 the company increased the purchase price in the tender offer for the 2.25% convertibles to $400 per $1,000 principal amount of notes from $300. Noteholders will also receive accrued interest to the payment date.

The company previously said it will finance the offer with a term loan under a credit facility with K Financing, LLC, an affiliate of Platinum Equity Capital Partners II, LP.

Because of the offer changes, the potential size of this term loan has been changed to $60.25 million from $52.5 million, and Kemet is now required to use up to $9.75 million of its cash on hand to purchase convertibles under the tender offer if more than $105,625,000 principal amount is tendered.

In connection with the tender offer, Kemet said it entered into some amendments to its €60 million credit facility and €35 million credit line with UniCredit Corporate Banking SpA. The amendments will become effective on completion of the tender prior to July 20.

Deutsche Bank Securities Inc. (800 503-4611) is the dealer manager. D.F. King & Co. (800 431-9643 or 212 269-5550) is the information agent.

Kemet is a Simpsonville, S.C.-based manufacturer of tantalum, multilayer ceramic, film, electrolytic paper and solid aluminum capacitors.

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