Milacron completes tender for 7 5/8% eurobonds; shareholders approve related transactions

New York, June 9 - Milacron Inc. (Caa2) announced the successful conclusion of its cash tender offer for all of the outstanding 7 5/8% guaranteed eurobonds due 2005 issued by its Milacron Capital Holdings BV subsidiary, which expired as scheduled at 1 p.m. Central European Time (12 p.m. London time) on June 7. As of that deadline, holders had tendered more than 99.99% of the outstanding principal amount.

The company also said that its shareholders approved the proposals required to implement the company's recent refinancing transactions. With the approvals, Milacron said it expects to repurchase the tendered bonds by June 10, as well as pay off a bridge credit facility, under which $110 million had been drawn, including letters of credit.

It anticipated that the proceeds of its recent sale of $225 million of new notes will have been released from escrow and that a new $75 million revolver led by JP Morgan Chase will have become available for working capital purposes.

And the company said that it expected that Glencore Finance AG and Mizuho International plc will have exchanged their debt ($70 million in series B notes) and equity (15 million shares of common stock) for 500,000 shares of 6% series B convertible preferred stock, and that the company's equity base will have increased by $100 million versus its March 31 amount.

As previously announced, Milacron, a Cincinnati-based supplier of plastics-processing technologies and industrial fluids, said on April 26 that it planned to launch a cash tender offer the following day (April 27) for all of the €115 million of outstanding 7 5/8% bonds issued by Milacron Capital Holdings.

It said the offer would have an early tender deadline of 5 p.m. Central European Time on May 6, subject to possible extension, but did not initially set an overall tender expiration deadline (the early tender deadline was subsequently eliminated, and an expiration deadline was eventually set).

The company said that bondholders validly tendering their eurobonds and not subsequently withdrawing them would be entitled to receive 100% of the principal amount of their bonds, plus accrued interest up to but excluding the settlement date. In addition, holders validly tendering their bonds by the early tender deadline would receive an early tender premium on the settlement date of €10 per €1,000 principal amount (the basic tender offer consideration was later increased from 100%, and the early tender premium was eliminated).

Milacron further said that along with the tender offer, its Milacron Capital Holdings BV unit planned to call a meeting of the bondholders to consider an amendment to the terms of the bonds that would eliminate all of the restrictive covenants contained in the fiscal agency agreement under which the bonds were issued.

The company said that by tendering their bonds into the tender offer, holders would appoint the tender agent for the offer as their proxy to vote in favor of the amendment at the bondholder meeting.

It said that holders of the eurobonds would have certain withdrawal rights, which would be described in the official offering materials.

On April 27, Milacron announced the formal beginning of the tender offer for the bonds, on terms it had outlined the previous day, April 26.

Milacron said that completion of the tender offer and its obligations to make any payments would be conditioned up, among others things, that sufficient financing has been arranged to fund the payment of the total purchase price for the tender plus any early tender premium payments.

On May 7, Milacron announced that it was amending the terms of its tender offer, to increase the purchase price to be paid for validly tendered bonds not subsequently withdrawn to 104% of the principal amount of bonds tendered from the originally announced 100%.

The company said that it would also eliminate the originally announced May 6 early tender deadline and the early tender premium to be paid to holders tendering their bonds before then. Milacron, which did not initially announce a tender offer expiration deadline, said that the offer would expire at 1 p.m. Central European Time (12 p.m. London time) on June 7, subject to possible extension.

It said the amended terms of the tender offer would apply retroactively. Holders of eurobonds that tendered them before the date of the amended terms would not be entitled to receive any early tender premium, but would be entitled to receive the amount of the increased purchase price if they did not withdraw their bonds from the tender offer.

Milacron - which said it was undertaking the tender offer to help transform its capital structure - also said that its refinancing costs for the second quarter would now be at least $1 million, or as much as $15 million, if the tender offer and the issuance of any new debt were to be completed in the quarter. In the company's guidance, previously issued on April 26, the range of projected refinancing costs for the second quarter was $1 million to $10 million.

On March 27, Milacron said that its Milacron Escrow Corp. had issued $225 million of privately placed new 11½% senior secured notes due 2011 at a price of 97.673. The entire proceeds were placed in escrow but are to be used in connection with previously announced financing transactions - subject to the satisfaction of certain conditions - including the repayment of the 7 5/8% notes.

Milacron said that as of that date, €83.6 million of the €115 million principal amount of the outstanding 7 5/8% notes had been tendered by their holders.

The company further said that on May 19 a meeting of the 7 5/8% bondholders had approved an amendment to delete substantially all of the restrictive covenants from the agreements governing the terms of the Eurobonds, effective as of the date of the tender offer settlement, which the company was anticipating to be June 10.

The dealer-manager for the offer was Credit Suisse First Boston LLC (800 820-1653 or +44 207 883 6748); the tender agent was Deutsche Bank AG (+44 207 547 5000) and the information agent was Innisfree M&A Inc. (888 750-5833 or (from the EU) 00 800 7710-9970).

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