Georgia Gulf holders tender $735.9 million of bonds in exchange offers

By Angela McDaniels

Tacoma, Wash., July 27 - Georgia Gulf Corp. said it received tenders for about $735.9 million, or 92%, of three series of its notes during private exchange offers and consent solicitations that ended at 7 p.m. ET on July 24.

Holders tendered $486.8 million of the company's $500 million 9½% senior notes due 2014, $158.1 million of its $200 million 10¾% senior subordinated notes due 2016 and $91.0 million of its $100 million 7 1/8% senior notes due 2013.

For each $1,000 principal amount of the senior notes, holders will receive 47.30 shares of convertible preferred stock and 2.11 shares of common stock. For the senior subordinated notes, holders will receive 18.36 shares of convertible preferred stock and 0.82 shares of common stock.

The company will issue a total of 30.2 million convertible preferreds and 1.3 million shares of common stock in the offer, which is expected to settle July 29.

The offers began March 31 and were originally scheduled to expire April 27. They have been extended several times and were substantially revised on July 2.

Previously, the company said the exchanges were subject to the receipt of tenders and consents for at least 94% of the notes and the amendment of Georgia Gulf's credit agreement.

The company offered to exchange all the notes for a total of 32.05 million of the convertible preferreds, which can be converted into common stock on a one-for-one basis, and 1.43 million shares of common stock, giving effect to a planned one-for-25 reverse stock split.

After the split, Georgia Gulf will have 3 million authorized shares. To allow an increase to 100 million and the issuance of a new equity incentive plan for up to 3,033,000 shares, the company will call a special meeting of stockholders to approve changes to its charter. Once the amendments are approved, the convertible preferreds will automatically convert into common stock.

Noteholders are receiving the majority of the company's equity, and the board will be reconstituted, with up to four new directors drawn from a list provided by holders of a majority of the 10¾% notes to replace existing directors. The board size will remain at seven.

The revised deal was agreed to with holders of 77% of its outstanding notes, and these investors entered into lock-up agreements requiring them to tender their notes and deliver consents. Covered by the agreements are holders of 84.6% of the 9½% notes, 79.3% of the 10¾% notes and 34.6% of the 7 1/8% notes.

At July 1, under the old terms, holders had tendered $1,265,000 of the 7 1/8% notes, $7.55 million of the 9½% notes and $150,000 of the 10¾% notes.

Under those terms, Georgia Gulf was offering $250 million principal amount of 15% senior secured second-lien notes due 2014 and 6,922,255 shares of its common stock in exchange for the notes.

Holders would have received $375 principal amount of new notes for every $1,000 principal amount of the 7 1/8% notes and 9½% notes and $125 principal amount of new notes for each $1,000 principal amount of the 10¾% notes.

The original terms required the receipt of tenders for at least 95% of the outstanding principal amount of all three issues of old notes.

The exchange offers are being made in a private transaction only to holders of old notes in the United States who are "qualified institutional buyers" and holders outside the United States who are persons other than "U.S. persons" as defined under the Securities Act.

Global Bondholder Services Corp. (212 430-3774 or 866 873-7700) is the information agent.

Georgia Gulf is an Atlanta-based maker of chlorovinyls and aromatics chemicals and vinyl-based building and home improvement products.

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