Kemet meets minimum tender condition for 2.25% convertibles

By Susanna Moon

Chicago, June 29 - Kemet Corp. said it received $93,919,000 principal amount, or 53.67%, of its 2.25% convertible senior notes due 2026 in the tender offer for the notes.

On June 22, the company reduced the minimum tender condition to $87.5 million principal amount, or 50%, of the notes from $122.5 million, or 70%, of the outstanding notes. Before that, Kemet decreased the minimum tender condition from $166.25 million, or 95%, of the notes on June 8.

The offer expired at 11:59 p.m. ET on June 26.

"We have these last 12 months, like many businesses throughout the world, been presented with a series of financial challenges," Per Loof, the company's chief executive officer, said in a press release. "However, even during these unprecedented times, we have been able to secure a number of definite steps to improve our operations, decrease our cost structure, preserve cash, restructure our short-term debt and now with the anticipated closing of our tender offer, decrease our long term-debt as well. We are confident that these improvements have enhanced our financial stability."

"The completion of our tender offer, which we expect to close tomorrow, June 30, adds further credence to our efforts. The access to credit that this transaction secures will, among other things, provide funding for us to better participate in the economic recovery as it happens. This year we have significantly reduced our break-even point for all our businesses. These actions, the financial resources now available to us, along with a strengthened balance sheet, position Kemet favorably as we return to more normal economic activity levels," Loof said.

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 the term loan was changed to $60.25 million from $52.5 million.

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.

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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