CLEVELAND, OHIO--(BUSINESS WIRE)--Park-Ohio Industries, Inc., a subsidiary of Park-Ohio Holdings Corp. (NASDAQ: PKOH), announced today that it is commencing a cash tender offer and intends to purchase any and all of its outstanding $250.0 million aggregate principal amount of 8.125% senior notes due 2021 (CUSIP No. 700677 AN7) (the “Notes”). The tender offer is being made pursuant to an Offer to Purchase and Consent Solicitation Statement and a related Letter of Transmittal and Consent, dated March 31, 2017. The tender offer is scheduled to expire at midnight, New York City time, at the end of April 27, 2017, unless extended or earlier terminated (the “Expiration Date”).
In conjunction with the tender offer, Park-Ohio Industries will be soliciting consents to proposed amendments to the indenture governing the Notes. The amendments would eliminate substantially all restrictive covenants and certain events of default, would allow for a shorter period, as acceptable to the Trustee, in which we are required to give notice to Trustee of a redemption and would shorten the minimum period required to deliver notice of redemption of the Notes to holders to three business days.
Holders that tender their Notes will be required to consent to the proposed amendments, and holders that consent to the proposed amendments will be required to tender their Notes. Tenders of Notes may be validly withdrawn and consents may be validly revoked at any time prior to 5:00 p.m., New York City time, on April 13, 2017 (the “Withdrawal Deadline”). Tenders of Notes and deliveries of consents made after the Withdrawal Deadline may not be validly withdrawn or revoked except in the limited circumstances described in the Offer to Purchase and Consent Solicitation Statement.
Holders who validly tender their Notes and deliver their consents to the proposed amendments to the indenture governing the Notes before 5:00 p.m., New York City time, on April 13, 2017, unless extended (the “Early Tender Deadline”), will be eligible to receive the Total Consideration (as defined below). Holders that validly tender Notes prior to the Early Tender Deadline and have their Notes accepted for purchase are expected to receive payment of the Total Consideration promptly following the Early Tender Deadline on the initial payment date (the “Initial Payment Date”). The Initial Payment Date is currently expected to occur on April 14, 2017. The “Total Consideration” offered is an amount, paid in cash, equal to $1,032.08 for each $1,000 principal amount of the Notes validly tendered and accepted for purchase, plus accrued and unpaid interest to, but not including, the settlement date. The Total Consideration includes an early tender premium (the “Early Tender Premium”) of $30.00 for each $1,000 principal amount of Notes accepted for purchase that were validly tendered and not withdrawn prior to the Early Tender Deadline. Holders that tender their Notes after the Early Tender Deadline but prior to the Expiration Date will be eligible to receive $1,002.08 for each $1,000 principal amount of Notes validly tendered and accepted for payment, plus accrued and unpaid interest to, but not including, the settlement date. The settlement date for Notes accepted for purchase that were validly tendered on or after the Early Tender Deadline but before the Expiration Date, is currently expected to occur on April 28, 2017. Park-Ohio Industries intends to finance the tender offer and pay the early tender premium and related fees and expenses with a portion of the net proceeds from the issuance of new long-term debt.
The tender offer is conditioned upon the financing of the new long-term debt issuance on terms and conditions satisfactory to Park-Ohio Industries and the entry into a supplemental indenture that will implement the proposed amendments, as well as other general conditions. The exact terms and conditions of the tender offer and consent solicitation are specified in, and qualified in their entirety by, the Offer to Purchase and Consent Solicitation Statement and related materials that are being distributed to holders of the Notes.
To the extent that any Notes are not validly tendered in the tender offer, the Company intends to redeem such pursuant to the redemption and satisfaction and discharge provisions of the indenture governing the Notes at a redemption price equal to 102.708% of the principal amount redeemed thereby, plus accrued and unpaid interest, if any, to, but not including, the redemption date. The Company intends to deliver an irrevocable notice of redemption to the trustee at the completion of the notes offering that is expected to be part of the debt financing. However, no assurance can be given that such untendered Notes will be redeemed as contemplated or at all.
Park-Ohio Industries has retained Barclays Capital Inc. and J.P. Morgan Securities LLC to serve as the Dealer Managers for the tender offer. Questions regarding the tender offer may be directed to Barclays Capital Inc. at (800) 438-3242 (toll free) or (212) 528-7581 (collect) and to J.P. Morgan Securities LLC at (800) 270-3994 (toll free) and (212) 270-5613 (collect). Requests for documents may be directed to Global Bondholder Services Corporation, the Information Agent for the tender offer, and banks and brokers can call collect at (212) 430-3775/3779, all others can call toll free at (866) 470-3800.
This press release is not an offer to purchase or a solicitation of consents, which may be made only pursuant to the terms of the Offer to Purchase and Consent Solicitation Statement and related materials and in accordance with applicable securities laws. This press release shall not constitute a notice of redemption of the Notes.
This press release contains forward-looking statements that are subject to certain risks, uncertainties and assumptions, including the ability to satisfy the conditions to consummate the tender offer or to receive the requisite consents to amend the indenture governing the Notes. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those anticipated, estimated or projected. These and other risks and assumptions are described in the Park-Ohio Industries’ reports that are available from the United States Securities and Exchange Commission. Park-Ohio Industries assumes no obligation to update the information in this release.