Chile's Pampa Calichera offers higher fee in consent solicitation for 7¾% notes

By Angela McDaniels

Tacoma, Wash., Dec. 1 - Sociedad de Inversiones Pampa Calichera SA increased the consent fee payable in the consent solicitation for its $250 million 7¾% senior secured notes due 2022 to $45 per $1,000 principal amount of notes from $22.50.

The solicitation ends at 5 p.m. ET on Dec. 4.

The company is soliciting consents to modify the covenant in the indenture relating to restricted payments and to include some definitions related to increasing the amount required to fully fund the interest reserve account and increasing the amount of collateral pledged for the benefit of the noteholders.

Consents are needed from holders of a majority of the notes in order to make the changes.

The proposed amendments will increase Pampa Calichera's ability to pay dividends on its stock in cash and allow the company to make an extraordinary dividend payment equivalent to $48 million against existing retained earnings, according to a company news release.

Pampa Calichera's controlling group has advised that, conditioned upon payment of the consent fee, it intends to carry out a recapitalization plan that would reduce the $494 million of outstanding debt of the controlling group by at least $170 million.

Of the $170 million, $70 million would be raised through capital increases of the controlling group that would be made before May 31 and $100 million would be raised through additional capital increases, the sale of assets of the controlling group or a combination of the two and would be carried out during 2009, the company said.

The controlling group intends to use the roughly $40 million portion of the extraordinary dividend payment that it is entitled to receive to pay interest and further reduce debt as part of its recapitalization plan.

Global Bondholder Services Corp. (866 873-6300 or call collect 212 430-3774) is the information and tabulation agent. Deutsche Bank Securities Inc. (866 627-0391 or call collect 212 250-2955) is the solicitation agent.

Pampa Calichera is a Santiago, Chile-based company that produces specialty chemicals and fertilizers.

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