Drummond starts cash tender for any and all 9% notes, 7 3/8% notes

By Jennifer Chiou

New York, Oct. 3 - Drummond Co. announced the start of cash tender offers for any and all of its $250 million of 9% senior notes due 2014 and any and all of its $400 million of 7 3/8% senior notes due 2016.

The Birmingham, Ala., coal producer is also is soliciting consents to allow it to amend the indenture of the notes to authorize the elimination of most of the restrictive covenants and certain of the events of default.

Those who tender their notes must deliver consent and vice versa.

The offers will end at midnight ET on Oct. 31.

For each $1,000 principal amount, the company is offering $1,020 for the 9% notes and $1,010.63 for the 7 3/8% notes, including a $30.00 consent payment for those who tender by 5 p.m. ET on Oct. 17.

The company will also pay accrued interest.

Drummond stated that the offer is subject to the completion of the proposed investment by an affiliate of Itochu Corp. in the company's Colombian coal operations and related transportation infrastructure on satisfactory terms.

In addition, the company is seeking consents from holders of a majority of the notes and the execution of a supplemental indenture.

The depositary and information agent is D.F. King & Co., Inc. (800 967-4607). The dealer manager and solicitation agent is Bank of America Merrill Lynch (888 292-0070 or call collect 980 683-3215).

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