September 12, 2016 - 11:10 PM EDT
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IUSA Announces Offer to Exchange Its Series A and Series B 11.50% Senior Secured Notes Due 2016 for Series A and Series B 9.00% Senior Secured Notes Due 2023

MEXICO CITY, Sept. 12, 2016 /PRNewswire/ -- Industrias Unidas, S.A. de C.V. ("IUSA" or "the Company"), a Mexican diversified industrial company, today announced that it has commenced an offer to exchange (the "Exchange Offer") its outstanding Series A and Series B 11.50% Senior Secured Notes due 2016 (the "Old Notes") for, respectively, its Series A and Series B 9.00% Senior Secured Notes due 2023 (the "New Notes"), subject to certain conditions including the condition that holders of at least 95% in aggregate principal amount of the Old Notes participate in the Exchange Offer, as further described below. The New Notes will have substantially the same covenants and other terms and conditions as the Old Notes and will be secured by the same collateral as the Old Notes upon the repayment in full of such Old Notes, as further described below.

The Exchange Offer is being made only to holders of Old Notes (the "Holders"), pursuant to the Information Memorandum dated September 12, 2016 (the "Exchange Information Memorandum") and related Letter of Transmittal which set forth more fully the terms and conditions of the Exchange Offer.  The Exchange Offer for the Old Notes is scheduled to expire at 12:00 midnight, New York City time, on October 7, 2016 (the "Expiration Date"), unless extended by the Company, and settlement will occur as soon as practicable following the Expiration Date. 

For each US$1.00 stated face value of each series of Old Notes, tendering holders of Old Notes will, on the settlement date for the Exchange Offer, receive New Notes of the corresponding series with a principal amount equal to US$1.00.  In addition, tendering holders of Old Notes will, on the Issue Date, receive additional New Notes with a principal amount equal to the amount of interest accrued on the Old Notes from and including August 15, 2016 to but not including the settlement date for the Exchange Offer (the "PIK Payment"). The PIK Payment will be made to tendering holders of Old Notes in lieu of the cash payment of such accrued interest.

No other payments, including in respect of principal, interest (including accrued or default interest other than the PIK Payment as described above) or additional amounts (if any), will be required to be paid to Holders.

The principal objective of the Exchange Offer is to refinance the Old Notes and avoid a potential concurso mercantil proceeding in Mexico.  The Company does not have the means to repay the amounts that are payable under the Old Notes.  The Company believes that it is currently not likely to find a material source of financing to fund the interest and principal payments on the Old Notes. The Company believes that the completion of the Exchange Offer is critical to resolving its constrained liquidity and ensuring its continued viability.  The Company also believes that the Exchange Offer would benefit both Holders and the Company by helping the Company to avoid contentious litigation that could cause business disruptions or damage to the overall value of its business.

The Company reserves the right, subject to applicable law, to extend, withdraw or terminate the Exchange Offer, or otherwise amend the terms of the Exchange Offer. If any tendered Old Notes are not accepted for exchange, such Old Notes will be returned without expense to the tendering holder.

The consummation of the Exchange Offer is subject to the conditions set forth in the Exchange Information Memorandum, which the Company may assert or waive in full or in part in its sole discretion, including the condition that at least 95% in aggregate outstanding principal amount of the Old Notes (including any Old Notes which are owned by the Company or its affiliates) be validly tendered and not validly withdrawn on or prior to the Expiration Date.  We currently believe that we will not have sufficient funding sources to pay off in full the Old Notes at their maturity if we obtain less than a 95% participation rate, which may result in the Company being placed in concurso mercantil.

The issuance of the New Notes is expected to occur simultaneously with the repayment in full of any Old Notes that are not tendered and exchanged in the Exchange Offer.  On the settlement date for the Exchange Offer, the Company will release the liens on the Old Notes collateral and perfect the liens on the New Notes collateral as soon as practicable thereafter.  Interest on the New Notes will accrue at the rate of 9% per annum and will be payable semi-annually in arrears every six months, commencing on a date that is six months following the settlement date for the Exchange Offer (each, an "Interest Payment Date").  The principal of the New Notes will be amortized in 12 equal semi-annual installments, commencing twelve months following the initial Interest Payment Date and occurring every six months thereafter.

The complete terms and conditions of the Exchange Offer are described in the Exchange Information Memorandum, copies of which may be obtained by eligible holders by contacting Epiq Corporate Restructuring, the information and exchange agent for the Exchange Offer, at 777 Third Avenue, 12th Floor, New York, New York 10017 Attn: IUSA Processing , +1(646) 282-2500 or (866) 734-9393,  [email protected] (please reference "IUSA" in the subject line).

The Company intends to rely on Section 3(a)(9) of the U.S. Securities Act of 1933 (the "Securities Act") to exempt the offering, issuance and distribution of the New Notes and the subsidiary guarantees thereunder pursuant to the Exchange Offer from the registration requirements of the Securities Act and of any state securities or "blue sky" laws.

This announcement is for informational purposes only and does not constitute an offer to sell or a solicitation of an offer to buy the New Notes nor an offer to purchase Old Notes.  The Exchange Offer is being made solely by means of the Exchange Information Memorandum and the related Letter of Transmittal.

About IUSA

IUSA is one of Mexico's largest diversified industrial groups, manufacturing copper-based and electrical products for the housing and electrical power markets primarily in the U.S. and Mexico.

Forward-Looking Statements

This release contains certain forward-looking statements regarding the future events or the future financial performance of IUSA. These statements reflect management's current views with respect to future events or financial performance, and are based on management's current assumptions and information currently available and are not guarantees of the Company's future performance. The timing of certain events and actual results could differ materially from those projected or contemplated by the forward-looking statements due to a number of factors including, but not limited to those inherent to operating in a highly regulated industry, strong competition, commercial and financial execution and economic conditions, among others.

To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/iusa-announces-offer-to-exchange-its-series-a-and-series-b-1150-senior-secured-notes-due-2016-for-series-a-and-series-b-900-senior-secured-notes-due-2023-300326673.html

SOURCE Industrias Unidas, S.A. de C.V.


Source: PR Newswire (September 12, 2016 - 11:10 PM EDT)

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