Brazil’s Votorantim gets tenders for $752.44 million of three series; exchange offer scrapped

By Susanna Moon

Chicago, Feb. 8 – Votorantim Cimentos SA (VCSA)’s wholly owned subsidiary Votorantim Cimentos International SA (VCI) announced the results of its capped tender for its $1,150,500,000 of 7¼% senior notes due 2041, its €346.72 million of 3½% notes due 2022 and its €214,293,000 of 3¼% notes due 2021.

In connection with the tender, VCI waived the exchange offer condition and terminated the concurrent exchange offer for the 2041 notes after failing to meet the minimum issue condition, according to the company update on Friday.

As announced Jan. 11, VCI was initially offering to purchase up to $650 million principal amount of the three series of notes.

The company then raised the tender cap on Jan. 25 to up to $900 million principal amount and extended the early deadline to coincide with the end of the tender offers and the consent solicitation at 11:59 p.m. ET on Feb. 7.

VCI was also offering to exchange up to $500 million principal amount of its $1,150,500,000 of outstanding 7¼% senior notes due 2041, but that offer has been abandoned.

The 2022 notes and 2021 notes are guaranteed by VCSA.

Holders had tendered about 50% of the 2041 notes as of the previous early deadline at 5 p.m. ET on Jan. 24

The final results are as follows with the total purchase price for each $1,000 or €1,000 principal amount and the issues listed in order of priority acceptance levels:

• $540,281,000 principal amount, or about 47%, of the 7¼% notes with a purchase price of $1,065;

• €151,475,000 principal amount, or about 43.7%, of the 3½% notes with a purchase price of €1,037.50; and

• €60,688,000 principal amount, or about 28.3%, of the 3¼% notes with a purchase price of €1,032.50.

The total amount includes an early tender premium of $30 or €30 per $1,000 or €1,000 principal amount, respectively, of notes. Originally, the total purchase price only applied to notes tendered before the early deadline of 5 p.m. ET on Jan. 24.

D.F. King (212 269-5550, 800 735-3591, +44 20 7920 9700, VotoCim@dfking.com or https://sites.dfkingltd.com/VotoCim) is the information and exchange agent.

Citigroup Global Markets Inc. (212 723-6106 or 800 558-3745), Morgan Stanley & Co. LLC (212 761-1057 or 800 624-1808), BB Securities Ltd. (+44 20 7367 5832), Banco Bradesco BBI SA (212 888-9145), Itau BBA USA Securities, Inc. (888 770-4828) and Santander Investment Securities Inc. (212 940-1442 or 855 404-3636) are the dealer managers.

Exchange offers

In the concurrent offer, VCI was offering to exchange up to $500 million principal amount of its $1,150,500,000 of outstanding 7¼% senior notes due 2041, but that offer has been called off.

The offer had been conditioned on the Fibria sale, the receipt of notes in the purchase offer of at least $500 million and the issue of at least $300 million principal amount of new St. Marys notes.

Specifically, the company was offering 7¼% senior notes due April 5, 2041 to be newly issued by St. Marys Cement Inc. (Canada), a wholly owned, direct subsidiary of VCI, and guaranteed by VCSA.

Votorantim was also soliciting consents to amend the notes indenture to eliminate substantially all of the restrictive covenants, as well as various events of default and related provisions.

The exchange offer and the consent solicitation had been set to end at 11:59 p.m. ET on Feb. 7.

The existing notes are guaranteed by Votorantim SA and VCSA.

The total exchange value would have been $1,000 principal amount of new St. Marys notes and a cash payment of $2.50 for each $1,000 principal amount tendered by 5 p.m. ET on Jan. 24, the early deadline.

The total exchange amount included an early premium of $30 principal amount of new notes and the cash payment of $2.50 per each $1,000 principal amount.

Holders who tendered after the early deadline would have received $970 principal amount of new notes.

The exchange and the concurrent cash tender offer were being held as part of VCSA's internationalization strategy and corporate reorganization that advances VCSA's international expansion, in addition to enabling a more efficient capital management, according to a previous company announcement.

D.F. King (212 269-5550, 800 735-3591, +44 20 7920 9700, VotoCim@dfking.com or https://sites.dfkingltd.com/VotoCim) is the information and exchange agent.

Citigroup Global Markets Inc. (212 723-6106 or 800 558-3745), Morgan Stanley & Co. LLC (212 761-1057 or 800 624-1808), BB Securities Ltd. (+44 20 7367 5832), Banco Bradesco BBI SA (212 888-9145), Itau BBA USA Securities, Inc. (888 770-4828) and Santander Investment Securities Inc. (212 940-1442 or 855 404-3636) are the dealer managers.

Votorantim Cimentos is a cement company based in Sao Paulo.

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