Teksid amends consent solicitation to amend 11 3/8% notes

By Jennifer Chiou

New York, Aug. 3 - Teksid Aluminum Luxembourg Sarl, SCA announced amendments to a consent solicitation for its 11 3/8% senior notes due 2011.

The changes reflect alterations to its sale agreement with Fiat Powertrain Technologies SpA.

The solicitation expires at 10 a.m. ET on Aug. 8. It began on Aug. 2.

As already announced, the company is seeking consents from holders of a majority of notes for the following:

• To allow the sale of Teksid Aluminum Srl and, indirectly, its subsidiary Teksid Aluminum Getti Speciali Srl to Fiat Powertrain Technologies SpA under an agreement dated July 25;

• To allow the repayment or settlement of certain intercompany obligations, including the obligations owed by the company and TK Aluminum-Luxembourg Finance Sarl to Teksid Aluminum and Teksid Aluminum Getti, and the obligations owed by Teksid Aluminum Getti to certain of the company's indirect subsidiaries organized under the laws of France;

• To permit the transfer of the quotas held by the company in Teksid Aluminum Getti to Teksid Aluminum;

• To extend the time by which an offer to purchase 11 3/8% notes with the proceeds of the sales of each of Teksid Aluminum Poland Sp zoo, the company's indirectly held minority equity interest in Nanjing Teksid Aluminum Foundry and the company's equity interest in Cevher Dokum Sanayi AS is to be made to no later than Oct. 15; and

• To extend the time by which an offer to purchase 11 3/8% notes with the proceeds of each of the Fiat payment and the escrow amount is to be made to no later than 10 business days after receipt of such payments, but in no event prior to Oct. 15.

The company said it executed the escrow agreement, which provides that the escrow Fiat payments shall be held in escrow for a period of up to 18 months from the closing of the Fiat sale.

The amendment to the agreement reduces the amount of the escrow payments to €2 million from €5 million to be paid by, or on behalf of, Teksid SpA, a Fiat affiliate to the company at closing.

The amendment also provides that if the Fiat sale does note occur, the company's rights, interests and claims with respect to unpaid portions of the Fiat payments, including amounts that would have been paid by Teksid to the escrow agent shall remain in full force and effect as against Teksid, Fiat and any other party.

In addition, the escrow payment may be released prior to 18 months from the closing date of the Fiat sale upon certain events of release, the company said.

The amendments add that the sale agreement may be terminated if it has note closed on or prior to Aug. 10.

On July 19, Teksid announced the receipt of the necessary consents to amend the 11 3/8% notes in a previous solicitation.

That amendment allowed the company to waive default claims arising from the company's failure to comply with a specified provision in the indenture; to extend the time by which it must make offers to purchase the notes after the sale of Teksid Aluminum Poland Sp zoo and the company's equity interests in Nanjing Teksid Aluminum Foundry and Cevher Dokum Sanayi AS to Aug. 15; to extend the time by which it must use the Fiat payment and escrow amount to no later than 10 business days after receipt of the payment, but not before Aug. 15; and to allow payment of the interest due on July 15 to be deducted from the proceeds used to fund the tender offers.

Teksid Aluminum Luxembourg, a maker of aluminum engine castings for the automotive industry, is a subsidiary of Carmagnola, Italy-based TK Aluminum.

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