OKLAHOMA CITY--(BUSINESS WIRE)--Aug. 23, 2016--
LSB Industries, Inc. (NYSE:LXU) (“LSB” or the “Company”)
today announced that it is soliciting consents (the “Consent
Solicitation”) from the holders of its outstanding $425,000,000 in
aggregate principal amount of 7.75% Senior Secured Notes due 2019 (CUSIP
No. 502160AL8; ISIN No. US502160AL89) (the “Notes”) to effect the
Proposed Amendment (as defined below).
As previously disclosed, on July 1, 2016, the Company completed the sale
of its climate control business for a total sale price of $364 million,
subject to certain post-closing adjustments (the “Sale”).
The primary purpose of the Consent Solicitation is to amend the
Indenture (the “Proposed Amendment”) to allow the Company (i) to
redeem all $50,000,000 in aggregate principal amount of the Company’s
outstanding 12.0% Senior Secured Notes due 2019 (the “12.0% Notes”),
at a redemption price of 106% of the principal amount thereof, with the
net proceeds of the Sale (the “12.0% Notes Redemption”), (ii) to
redeem $50,000,000 in aggregate principal amount of the Notes, at a
redemption price of 103.875% of the principal amount thereof, with the
net proceeds of the Sale (the “Notes Redemption” and, together
with the 12.0% Notes Redemption, the “Redemptions”), (iii) to
redeem shares of the Company’s outstanding Series E cumulative
redeemable Class C preferred stock (the “Preferred Stock”), at
the liquidation preference value thereof, with the net proceeds of the
Sale in an aggregate amount not to exceed $45,000,000 (in addition to
any such redemption that may be made using the full $35,000,000 of
restricted payment capacity that the Company has under the existing
“general restricted payments” basket in the Indenture, for an aggregate
total of $80,000,000) and (iv) given the intended use of the net
proceeds of the Sale as described in the foregoing clause (i), (ii) and
(iii), waive the Company’s obligation to make and consummate an asset
sale repurchase offer of the Notes with respect to the Sale, and to make
certain technical changes to certain financial definitions and
collateral release mechanics in connection therewith.
The Company will agree to (a) consummate the Redemptions as promptly as
practicable following the date the Proposed Amendment becomes operative
and (b) prohibitions on its ability to incur future pari passu
indebtedness in excess of $25,000,000 in aggregate principal amount at
any time outstanding using the “general debt” basket and the “general
liens” basket under the Indenture.
The Company believes that the 12.0% Notes Redemption, the Notes
Redemption and the redemption of the Preferred Stock as described above
will result in a deleveraging of the Company’s assets and further
enhance the Company’s long-term prospects by improving its capital
structure given the cost of capital associated with the 12.0% Notes and
the Preferred Stock.
The consent of Holders of a majority in principal amount of the
outstanding Notes is required pursuant to the terms of the Indenture to
approve the Proposed Amendment.
Holders are referred to the Company’s Notice of Consent Solicitation
dated August 23, 2016 and the related Consent Form, which are being sent
to Holders, for the detailed terms and conditions of the Consent
Solicitation.
The Company will pay a consent fee equal to $13.25 per $1,000 principal
amount of Notes for which consents have been delivered by such Holder.
The consent fee of $13.25 per $1,000 principal amount of Notes was
calculated based on an assumed consent fee of $15.00 per $1,000
principal amount of Notes if the Notes Redemption had occurred prior to
the payment of the consent fee. In addition, the Company will agree
that, if the Proposed Amendment becomes operative, the interest rate
applicable to all Notes outstanding after the consummation of the Notes
Redemption will, with retroactive effect to August 1, 2016,
automatically be increased to 8.50% per annum. The record date for
determining the Holders who are entitled to consent is 5:00 p.m., New
York City time, on August 22, 2016.
The Consent Solicitation will expire at 5:00 p.m., New York City time,
on September 2, 2016, or such later time and date to which the Consent
Solicitation may be extended (the “Expiration Time”). Provided
the Company receives the requisite consents, the Proposed Amendment will
be effected by a supplemental indenture, which the Company and the
guarantors party to the Indenture intend to promptly enter into
following the receipt of the requisite consents, but the Proposed
Amendment will not become operative until the consent fee is paid to
each Holder who delivers a valid and unrevoked consent prior to the
Expiration Time.
The Company has appointed Ipreo LLC as tabulation agent and as
information agent with respect to the Consent Solicitation. Requests for
documents should be directed to Ipreo LLC at: (212) 849-3880 (banks and
brokers) or (888) 593-9546 (toll free). The Company has also retained
Credit Suisse Securities (USA) LLC as the exclusive solicitation agent
with respect to the Consent Solicitation. Questions concerning the terms
of the Consent Solicitation should be directed to Credit Suisse
Securities (USA) LLC at: (212) 325-2476 (collect) or (800) 820-1653
(U.S. toll free).
About LSB Industries, Inc.
LSB Industries, Inc., headquartered in Oklahoma City, Oklahoma,
manufactures and sells chemical products for the agricultural, mining,
and industrial markets. The Company owns and operates facilities in
Cherokee, Alabama, El Dorado, Arkansas and Pryor, Oklahoma, and operates
a facility for Covestro AG in Baytown, Texas. LSB’s products are sold
through distributors and directly to end customers throughout the United
States. Additional information about the Company can be found on its
website at www.lsbindustries.com.
Forward Looking Statement
This press release includes certain forward-looking statements within
the meaning of the Private Securities Litigation Reform Act of 1995.
These forward-looking statements generally are identified by use of the
words “will”, “believes”, “expects”, “estimates”, “intends”,
“anticipates”, “plans to”, “should”, “estimates”, “projects”, or similar
expressions, including, without limitation, LSB’s plans and expectations
with respect to the pay down of debt; improved financial flexibility and
capital structure. Investors are cautioned that such forward-looking
statements are not guarantees of future performance and involve risk and
uncertainties. Though we believe that expectations reflected in such
forward-looking statements are reasonable, we can give no assurance that
such expectation will prove to be correct. Actual results may differ
materially from the forward-looking statements as a result of various
factors. All forward-looking statements included in this press release
are expressly qualified in their entirety by such cautionary statements.
We expressly disclaim any obligation to update, amend or clarify any
forward-looking statement to reflect events, new information or
circumstances occurring after the date of this press release except as
required by applicable law.
View source version on businesswire.com: http://www.businesswire.com/news/home/20160823005424/en/
Source: LSB Industries, Inc.
Company:
LSB Industries, Inc.
Mark Behrman, 405-235-4546
Chief
Financial Officer
or
Investor Relations:
The
Equity Group Inc.
Fred Buonocore 212-836-9607
or
Kevin
Towle 212-836-9620