Teksid Aluminum begins consent solicitation to amend notes indenture for Nemak sale

By Caroline Salls

Pittsburgh, March 2 - Teksid Aluminum Luxembourg Sarl, SCA has begun a solicitation of consents from holders of its 11 3/8% senior notes due 2011 to implement proposed amendments to the notes indenture, according to a company news release.

The consent solicitation will expire at 10 a.m. ET on March 8.

The company must receive consents from holders of at least a majority of outstanding notes before it can amend the indenture.

According to the release, the financial adviser for an informal noteholders' committee told Teksid that holders of about 55% of the outstanding principal amount of senior notes have indicated that they will consent to the indenture amendments.

There will not be any consent fee offered to holders of senior notes in conjunction with the consent solicitation.

As previously reported, the company is making the consent solicitation in connection with the sale of some assets and operations to Tenedora Nemak, SA de CV, a subsidiary of Alfa, SAB de CV.

Under a letter of understanding with Nemak on the proposed amended sale terms, Teksid would sell its operations in North America and South America and 30% of its equity interests in a joint venture, Nanjing Teksid Aluminum Foundry, in the initial closing and would sell its operations in Poland and the remaining 40% equity interests in Nanjing Teksid Aluminum Foundry in one or more subsequent closings.

However, the letter of understanding places Nemak under no obligation to consummate a transaction until a definitive agreement to amend the transaction has been executed.

Closing of the amended Nemak transaction is subject to the receipt of the required consents by the company and other customary conditions, including regulatory approvals.

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

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