Metaldyne gets required consents for 10%, 11% notes; acquisition by Asahi Tec expected Jan. 10

By Jennifer Chiou

New York, Dec. 4 - Metaldyne Corp. said it obtained consents from holders of a majority of its 10% senior notes due 2014 and 11% senior subordinated notes due 2012, allowing the company to proceed with its acquisition by Asahi Tech Corp, according to an 8-K filing with the Securities and Exchange Commission.

In result, the company executed supplemental indentures that will become operative with the completed acquisition.

Metaldyne said it mailed a definitive information statement/proxy statement to its common stockholders for the merger, adding that the merger is expected to be effected on Jan. 10.

On Dec. 4, the company received written consents form a majority of noteholders and thus launched a consent solicitation to allow holders to consent and receive consent payments.

Metaldyne said 10% noteholders will be paid a consent fee of $80.00 per $1,000 principal amount and 11% noteholders will receive $127.50 per $1,000 principal amount, without interest.

Metaldyne previously said it expects to pay roughly $48 million of consent fees to noteholders to obtain their consents.

On Nov. 28, the company announced Asahi Tec had reached an agreement in principal with committees representing noteholders.

As already reported, the company was seeking consents from holders of a majority of each series of notes to allow its acquisition by Asahi Tec and related transactions, to allow a distribution of shares of the common stock of subsidiary TriMas Corp. and to waive the change-of-control provisions and the obligation that the company offer to purchase the notes at 101% after the merger.

Other changes include making provisions for the pledge of collateral to secure the notes, provisions requiring that Metaldyne make an offer to purchase up to $25 million of senior notes at par following the merger and a requirement to reduce debt with up to $50 million of proceeds of equity issuances by Asahi Tec, which would be contributed to Metaldyne.

In addition, the anticipated interest rate on the new term loans to be incurred with the merger is expected to be below the maximum level in the agreement. Accordingly, the condition relating to corporate debt ratings and the new term loan costs is expected to be satisfied without a change in expected ratings or interest rate.

According to the filing, it is also expected that the new term loan will be increased by $15 million and that, consequently, revolver borrowings at closing will be reduced by a corresponding amount.

The original merger agreement was modified to delete the condition that a minimum amount of Metaldyne's 10% senior subordinated notes and 11% senior subordinated notes be tendered. Funds that were to be used for a tender offer are instead being used to reduce senior bank debt.

As previously announced, the modified merger agreement requires that bondholder consents be obtained on specified terms reflecting Asahi Tec's most recent position with the noteholder committees. In addition, an intercreditor agreement among a collateral agent for noteholders and an intercreditor agent for the senior bank lenders must be entered into on terms required by the senior lenders.

Metaldyne is a Plymouth, Mich., supplier of powertrain and chassis systems and components.

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