Argo-Tech gets consents for 9¼% notes, enters supplemental indenture

By Jennifer Chiou

New York, March 9 - Argo-Tech Corp. executed a second supplemental indenture after receiving consents from holders of a majority of its $250 million of 9¼% senior notes due 2011, according to an 8-K filing with the Securities and Exchange Commission.

The company solicited consents to amend the indenture governing the notes to eliminate some restrictive covenants, including limitations on indebtedness, restricted payments and sales of assets and subsidiary stock.

As of 5 p.m. ET on March 5, the consent deadline, holders of $242.475 million of notes had tendered their securities.

Argo-Tech said that the supplemental indenture will become operative upon payment of the tender consideration.

The tender offer will expire at 9 a.m. ET on March 20. It began on Feb. 20.

The tender consideration will be based on the bid-side yield to maturity of the 4 7/8% U.S. Treasury note due May 31, 2008 plus 50 basis points. The company will also pay accrued interest up to but excluding the payment date.

The tender consideration will include a $30.00 consent payment per $1,000 principal amount of notes for noteholders who tendered before the consent payment deadline. Argo-Tech said it expects to pay for notes tendered prior to the consent payment deadline at any time before the expiration deadline.

Had the tender consideration been priced on Feb. 16, it would have totaled $1,088.34 for each $1,000 principal amount of notes, according to a previous company news release.

Consummation of the tender offer is subject to the receipt of tenders for a majority of the outstanding principal amount of notes and the satisfaction or waiver of all conditions to the consummation of the sale of AT Holdings Corp., Argo-Tech's parent, to Eaton Corp.

On Dec. 24, VGAT Investors, LLC entered into a definitive agreement to sell all of the outstanding common stock of AT Holdings to Eaton. The members of VGAT include, among others, Vestar Capital Partners IV, LP, Greenbriar Equity Group, LLC and several members of the company's senior management.

Goldman, Sachs & Co. (800 828-3182) is the dealer manager and solicitation agent, and Georgeson Inc. (866 277-5068) is the information agent.

Argo-Tech is a Cleveland-based manufacturer of aircraft fuel-flow devices.

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