Exchange offer for its Existing Notes

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION TO ANY U.S. PERSON (AS DEFINED BELOW) OR IN OR INTO THE UNITED STATES, ITS TERRITORIES AND POSSESSIONS, ANY STATE OF THE UNITED STATES OR THE DISTRICT OF COLUMBIA (THE "UNITED STATES")

 

19 January 2015

FERREXPO FINANCE PLC ANNOUNCES EXCHANGE OFFER FOR ITS U.S.$500,000,000 7.875 PER CENT. GUARANTEED NOTES DUE 2016

FERREXPO FINANCE PLC (the "Issuer") today announces its invitation to holders (subject to the offer restrictions referred to below) of its outstanding U.S.$500,000,000 7.875 per cent. Guaranteed Notes due 2016 (the "Existing Notes") to offer to exchange any and all of the Existing Notes on a par for par basis for (save as set out below in respect of the Early Exchange Offer Consideration) an aggregate principal amount of new United States dollar denominated guaranteed amortising notes (the "New Notes") to be issued by the Issuer, guaranteed by the New Guarantors and issued with the benefit of a surety agreement from the Surety equal to the aggregate principal amount of Existing Notes validly offered and accepted for exchange by the Issuer (the "Exchange Offer"). In respect of validly submitted Exchange Instructions received by the Exchange Agent at or prior to the Early Exchange Deadline which are accepted for exchange by the Issuer, Holders shall receive a cash consideration amount equal to 20 per cent. of the aggregate principal amount of Existing Notes accepted for exchange (the "Early Cash Consideration") as well as New Notes in an amount (subject to rounding) equal to 80 per cent. of the aggregate principal amount of Existing Notes accepted for exchange (together with the Early Cash Consideration, the "Early Exchange Offer Consideration"). In respect of validly submitted Exchange Instructions received by the Exchange Agent at or prior to the Final Exchange Deadline and after the Early Exchange Deadline which are accepted for exchange by the Issuer, Holders shall receive New Notes in an amount equal to 100 per cent. of the aggregate principal amount of Existing Notes accepted for exchange (the "Base Exchange Offer Consideration").

The Exchange Offer is made on the terms and subject to the conditions set out in the Exchange Offer Memorandum dated 19 January 2015 (the "Exchange Offer Memorandum") and will expire at 11.59 p.m. (New York time) on 17 February 2015 (subject to the right of the Issuer to extend, re-open, amend and/or terminate the Exchange Offer) (the "Final Exchange Deadline").

Copies of the Exchange Offer Memorandum are available from the Exchange Agent as set out below. Capitalised terms used in this announcement but not defined have the meanings given to them in the Exchange Offer Memorandum.

 

EXISTING NOTES

 

Issuer/Title	ISIN	Guarantors/Surety	Amount Outstanding	Interest	Maturity Date	Ferrexpo plc Ratings	Minimum Participation Condition
Ferrexpo Finance plc U.S.$500,000,000 7.875 per cent. Guaranteed Notes due 2016	Reg S: XS0614325586 Rule 144A: US31529TAB98	Ferrexpo plc, Ferrexpo AG, Ferrexpo Middle East FZE/Ferrexpo Poltava Mining (previously known as Ferrexpo Poltava GOK Corporation)	U.S.$500,000,000	7.875% per annum	7 April 2016	Caa2 (negative outlook)/ CCC+ (negative outlook)/ CCC	$300,000,000

 

NEW NOTES

 

Issuer	New Guarantors/Surety	Issue Price	Interest	Final Maturity Date	Expected Notes Rating(1)	Amortisation Schedule
Ferrexpo Finance plc	Ferrexpo plc, Ferrexpo AG, Ferrexpo Middle East FZE/Ferrexpo Poltava Mining (previously known as Ferrexpo Poltava GOK Corporation)	100%	10.375% per annum	7 April 2019	Caa2/CCC+/CCC	50% 7 April 2018 / 50% 7 April 2019

 

(1) This is an indicative rating to be confirmed on or prior to the Early Settlement Date

Overview

The Issuer is inviting Holders (subject to the offer restrictions referred to below) to offer to exchange their Existing Notes pursuant to the Exchange Offer for (i) in respect of validly submitted Exchange Instructions received by the Exchange Agent at or prior to the Early Exchange Deadline, a combination of New Notes and the Early Cash Consideration or (ii) in respect of validly submitted Exchange Instructions received by the Exchange Agent at or prior to the Final Exchange Deadline and after the Early Exchange Deadline, New Notes.

The Exchange Offer is made on the terms and subject to the conditions (including, but not limited to, the Minimum Participation Condition) set out in the Exchange Offer Memorandum.

Holders wishing to participate in the Exchange Offer on the terms and subject to the conditions set out in the Exchange Offer Memorandum, may, subject to the Minimum Participation Consideration, in respect of an aggregate principal amount of Existing Notes, offer to exchange those Existing Notes for:

i.    in respect of validly submitted Exchange Instructions received by the Exchange Agent at or prior to the Early Exchange Deadline, a combination of (a) New Notes in an amount (subject to rounding) equal to 80 per cent. of the aggregate principal amount of Existing Notes, the subject of such Exchange Instruction(s) and (b) the applicable Early Cash Consideration, plus Accrued Interest and any applicable Cash Rounding Amount on the Early Settlement Date; or

ii.    in respect of validly submitted Exchange Instructions received by the Exchange Agent at or prior to the Final Exchange Deadline and after the Early Exchange Deadline, New Notes in an aggregate principal amount equal to 100 per cent. of the aggregate principal amount of Existing Notes, the subject of such Exchange Instruction(s), plus Accrued Interest and any applicable Cash Rounding Amount on the Final Settlement Date.

Purpose of the Exchange Offer

In light of the current iron ore price environment, the Issuer would like to address the maturity profile of its debt portfolio so that it better matches the expected cash generation of the Group.

The Exchange Offer

Before making a decision whether to offer Existing Notes for exchange, Holders should carefully consider all of the information contained in the Exchange Offer Memorandum (including all of the information in the Preliminary Prospectus) and, in particular, the risk factors described or referred to in "Risk Factors and Other Considerations" in the Exchange Offer Memorandum and the Preliminary Prospectus Risk Factors.

The Minimum Participation Condition

The Issuer will only accept offers to exchange Existing Notes if at least U.S.$300,000,000 in aggregate principal amount of Existing Notes is validly offered by Holders for exchange in the Exchange Offer as at the Early Exchange Deadline (unless such condition is amended or waived by the Issuer in its sole discretion) (the "Minimum Participation Condition").

Existing Notes exchanged on the Final Settlement Date - Accrued Interest Payments 

Holders that receive New Notes in exchange for Existing Notes on the Final Settlement Date will receive New Notes that will have Pre-Issuance Interest for the period from and including the Early Settlement Date to, but not including, the Final Settlement Date. Therefore, the Accrued Interest Payment in respect of the Existing Notes exchanged on the Final Settlement Date will be reduced, but not below zero, to offset the amount of any Pre-Issuance Interest accrued with respect to the New Notes issued.

Listing of the New Notes

The Issuer intends to apply for the New Notes to be admitted to the official list of the Irish Stock Exchange and to trading on the Irish Stock Exchange's regulated market. The Issuer intends to apply for such listing of the New Notes to be effective on or about the Final Settlement Date but not on the Early Settlement Date. Holders of Existing Notes whose Existing Notes are exchanged on the Early Settlement Date for New Notes will receive unlisted New Notes, pending the listing of such New Notes on or about the Final Settlement Date.

Form and Denomination of New Notes

The New Notes will be issued in accordance with the terms and conditions set out in the Preliminary Prospectus annexed in Annex I to the Exchange Offer Memorandum, and will be issued in registered form and shall be in denominations of U.S.$150,000 each and integral multiples of U.S.$1,000 each in excess thereof.

Participation in the Exchange Offer

To receive New Notes and participate in the Exchange Offer, Holders must validly offer for exchange Existing Notes by the applicable Exchange Deadline with an aggregate principal amount of at least the minimum denomination of the Existing Notes (the "Minimum Offer Amount") such that a Holder is eligible to receive as part of its Early Exchange Offer Consideration or its Base Exchange Offer Consideration (as applicable), a principal amount of New Notes of at least U.S.$150,000.

Where a Holder whose total holding of Existing Notes is less than the Minimum Offer Amount submits an Exchange Instruction in respect of such principal amount of Existing Notes, such Holder's Exchange Instruction will be rejected.

Exchange Instructions will be irrevocable except in the limited circumstances described in "Amendment and Termination" in the Exchange Offer Memorandum.

Existing Notes not accepted for exchange in the Exchange Offer or which do not meet the Minimum Offer Amount will remain outstanding on the basis of their current terms and conditions.

 

Indicative Exchange Offer Timetable

Events		Times and Dates
Commencement of the Exchange Offer
Exchange Offer announced. Exchange Offer Memorandum available from the Exchange Agent.		19 January 2015
Early Exchange Deadline
Deadline for receipt of valid Exchange Instructions by the Exchange Agent in order for Holders to be able to participate in the Exchange Offer and to be eligible to receive the Early Exchange Offer Consideration.		11:59 p.m. (New York time) on 2 February 2015
Announcement of Results after the Early Exchange Deadline
Announcement of whether the Issuer will accept valid offers of Existing Notes for exchange received at or prior to the Early Exchange Deadline pursuant to the Exchange Offer and, if so accepted, (i) the aggregate principal amount of such Existing Notes accepted for exchange, (ii) the satisfaction or waiver of the Minimum Participation Condition, (iii) the aggregate principal amount of New Notes to be issued on the Early Settlement Date, (iv) the aggregate principal amount of Early Cash Consideration to be paid on the Early Settlement Date and (v) the aggregate principal amount of Existing Notes which will be outstanding following the Early Settlement Date.		As soon as reasonably practicable after the Early Exchange Deadline.
Early Settlement Date
Subject to satisfaction or waiver of the Minimum Participation Condition, expected settlement date for Existing Notes which are the subject of valid Exchange Instructions received by the Exchange Agent at or prior to the Early Exchange Deadline. Payment of the Early Exchange Offer Consideration and any Accrued Interest Payment or Cash Rounding Amount (if applicable).		On or about 6 February 2015
Final Exchange Deadline Final deadline for receipt of valid Exchange Instructions by the Exchange Agent in order for Holders to participate in the Exchange Offer and be eligible to receive the Base Exchange Offer Consideration.		11:59 p.m. (New York time) on 17 February 2015
Announcement of Results after the Final Exchange Deadline
Announcement of whether the Issuer will accept valid offers of Existing Notes for exchange pursuant to the Exchange Offer and, if so accepted, the (i) aggregate principal amount of Existing Notes received after the Early Exchange Deadline but at or prior to the Final Exchange Deadline accepted for exchange, (ii) aggregate principal amount of New Notes to be issued on the Final Settlement Date, (iii) total aggregate principal amount of New Notes to be issued pursuant to the Exchange Offers and (iv) aggregate principal amount of Existing Notes which will be outstanding following the Final Settlement Date.		As soon as reasonably practicable after the Final Exchange Deadline.
Final Settlement Date
Subject to prior satisfaction or waiver of the Minimum Participation Condition, expected settlement date for Existing Notes which are the subject of valid Exchange Instructions received by the Exchange Agent after the Early Exchange Deadline but at or prior to the Final Exchange Deadline. Payment of the Base Exchange Offer Consideration and any Accrued Interest Payment or Cash Rounding Amount (if applicable).		On or about 19 February 2015

The above times and dates are subject to the right of the Issuer to extend, re-open, amend, terminate and/or withdraw the Exchange Offer (subject to applicable law and as provided in the Exchange Offer Memorandum). Holders are advised to check with any bank, securities broker or other intermediary through which they hold Existing Notes when such intermediary needs to receive instructions from a Holder in order for that Holder to be able to participate in, or (in the limited circumstances in which revocation is permitted) revoke their instruction to participate in, the Exchange Offer before the applicable deadlines set out above. The deadlines set by the Clearing Systems for the submission of Exchange Instructions will also be earlier than the applicable deadlines above. See "Procedures for Participating in the Exchange Offer" in the Exchange Offer Memorandum.

Unless stated otherwise, announcements in relation to the Exchange Offer will be found on the relevant Reuters International Insider Screen and the website of the London Stock Exchange and be made by (i) the issue of a press release to a Notifying News Service and (ii) the delivery of notices to the Clearing Systems for communication to Direct Participants. Copies of all such announcements, press releases and notices can also be obtained from the Exchange Agent, the contact details for which are at the bottom of this announcement. Significant delays may be experienced where notices are delivered to the Clearing Systems and Holders are urged to contact the Exchange Agent for the relevant announcements during the course of the Exchange Offer. In addition, holders of Existing Notes may contact the Dealer Managers for information using the contact details which are at the bottom of this announcement.

General

The Issuer may, in its sole discretion, extend, re-open, amend or waive any condition of (including the Minimum Participation Condition), or terminate the Exchange Offer at any time (subject to applicable law and as provided in the Exchange Offer Memorandum). Details of any such extension, re-opening, amendment, waiver, termination or withdrawal will be announced as provided in this announcement as soon as reasonably practicable after the relevant decision is made.

Holders are advised to check with any bank, securities broker or other intermediary through which they hold Existing Notes when such intermediary needs to receive instructions from a Holder in order for that Holder to be able to participate in, or (in the limited circumstances in which revocation is permitted) revoke their instruction to participate in, the Exchange Offer before the deadlines specified in the Exchange Offer Memorandum. The deadlines set by each Clearing System for the submission and withdrawal of Exchange Instructions will also be earlier than the relevant deadlines specified in the Exchange Offer Memorandum.

For further information on the Exchange Offer and the further terms and conditions on which the Exchange Offer is made, Holders should refer to "Further Information and Terms and Conditions" in the Exchange Offer Memorandum. Questions and requests for assistance in connection with the (a) Exchange Offer may be directed to the Dealer Managers, and (b) delivery of Exchange Instructions may be directed to the Exchange Agent, the contact details for all of which are below.

 

Noteholders are advised to read carefully the Exchange Offer Memorandum for full details of and information on the procedures for participating in the Exchange Offer.

Credit Suisse Securities (Europe) Limited and Morgan Stanley & Co. International plc are acting as Dealer Managers and Lucid Issuer Services Limited is acting as Exchange Agent.

Questions and requests for assistance in connection with the Exchange Offer may be directed to either Dealer Manager.

Dealer Managers
Credit Suisse Securities (Europe) Limited	Morgan Stanley & Co. International plc
One Cabot Square Canary Wharf London E14 4QA United Kingdom Tel: +44 207 883 8763 Fax: +44 207 892 1310 Attention: Liability Management Desk	25 Cabot Square Canary Wharf London E14 4QA United Kingdom Tel: +44 207 677 5040 Email: [email protected] Attention: Liability Management

Questions and requests for assistance in connection with the delivery of Exchange Instructions may be directed to the Exchange Agent.

 

Exchange Agent

Lucid Issuer Services Limited Leroy House 436 Essex Road London N1 3QP United Kingdom Tel: +44 (0) 20 7704 0880 Email: [email protected] Attention: Paul Kamminga

 

DISCLAIMERThis announcement must be read in conjunction with the Exchange Offer Memorandum.  This announcement and the Exchange Offer Memorandum contain important information which should be read carefully before any decision is made with respect to the Exchange Offer.  If you are in any doubt as to the contents of this announcement or the Exchange Offer Memorandum or the action you should take, you are recommended to seek your own financial and legal advice, including as to any tax consequences, immediately from your stockbroker, bank manager, solicitor, accountant or other independent financial or legal adviser. Any individual or company whose Existing Notes are held on its behalf by a broker, dealer, bank, custodian, trust company or other nominee or intermediary must contact such entity if it wishes to offer Existing Notes for exchange pursuant to the Exchange Offer. None of the Dealer Managers, the Exchange Agent or the Issuer makes any recommendation as to whether Noteholders should offer Existing Notes for exchange pursuant to the Exchange Offer.

 

OFFER AND DISTRIBUTION RESTRICTIONS

Neither this announcement, nor the Exchange Offer Memorandum constitutes an invitation to participate in the Exchange Offer in any jurisdiction in which, or to any person to or from whom, it is unlawful to make such invitation or for there to be such participation under applicable securities laws. The distribution of this announcement and the Exchange Offer Memorandum in certain jurisdictions may be restricted by law. Persons into whose possession this announcement or the Exchange Offer Memorandum comes are required by the Issuer, the Dealer Managers and the Exchange Agent to inform themselves about, and to observe, any such restrictions.

United States

Neither the Exchange Offer nor the New Notes has been registered under the United States Securities Act of 1933 (the "Securities Act") or any other securities laws and the Exchange Offer is only directed at, and the New Notes are only being offered and will only be issued to, holders of record of Existing Notes as of the Record Date who can represent that they are either (i) "qualified institutional buyers" ("QIBs") (as defined in Rule 144A ("Rule 144A") under the Securities Act) or (ii) outside the United States and not U.S. persons (as defined in Regulation S under the Securities Act ("Regulation S")) and are lawfully able to participate in the Exchange Offer in compliance with applicable laws of applicable jurisdictions (each such person, an "Eligible Holder"). Only Eligible Holders are authorised to receive or review the Exchange Offer Memorandum or to participate in the Exchange Offer. For a description of restrictions on transfer of the New Notes, see "Selling and Transfer Restrictions" in the Preliminary Prospectus.

Italy

None of the Exchange Offer, this announcement, the Exchange Offer Memorandum or any other documents or materials relating to the Exchange Offer have been or will be submitted to the clearance procedure of the Commissione Nazionale per le Società e la Borsa ("CONSOB").

The Exchange Offer may only be carried out in Italy as an exempted offer pursuant to article 101-bis, paragraph 3-bis of the Legislative Decree No. 58 of 24 February 1998, as amended (the "Financial Services Act"), and article 35-bis, paragraph 4, of CONSOB Regulation No. 11971 of 14 May 1999, as amended.

Holders or beneficial owners of the Existing Notes can offer to exchange some or all of the Existing Notes through authorised persons (such as investment firms, banks or financial intermediaries permitted to conduct such activities in the Republic of Italy in accordance with the Financial Services Act, CONSOB Regulation No. 16190 of 29 October 2007, as amended from time to time, and Legislative Decree No. 385 of September 1, 1993, as amended) and in compliance with applicable laws and regulations or with requirements imposed by CONSOB or any other Italian authority.

Each intermediary must comply with the applicable laws and regulations concerning information duties vis-à-vis its clients in respect of the Existing Notes and/or the Exchange Offer.

United Kingdom

The communication of this announcement and the Exchange Offer Memorandum by the Issuer and any other documents or materials relating to the Exchange Offer is not being made, and such documents and/or materials have not been approved, by an authorised person for the purposes of section 21 of the Financial Services and Markets Act 2000 (the "FSMA"). Accordingly, such documents and/or materials are not being distributed to, and must not be passed on to, the general public in the United Kingdom. The communication of such documents and/or materials is exempt from the restriction on financial promotions under section 21 of the FSMA on the basis that it is only directed at and may be communicated to (1) those persons who are existing members or creditors of the Issuer or other persons within Article 43 of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, and (2) to any other persons to whom these documents and/or materials may lawfully be communicated.

France

The Exchange Offer is not being made, directly or indirectly, to the public in the Republic of France ("France"). Neither this announcement, the Exchange Offer Memorandum nor any other documents or offering materials relating to the Exchange Offer have been or shall be distributed to the public in France and only (a) providers of investment services relating to portfolio management for the account of third parties (personnes fournissant le service d'investissement de gestion de portefeuille pour compte de tiers) , as defined in, and in accordance with, Articles L.411-2-II-1 and D.321-1 of the French Code monétaire et financier and/or (b) qualified investors (investisseurs qualifiés) acting for their own account, other than individuals, as defined in, and in accordance with, Articles L.411-2-II-2, D.411-1 D.744-1, D.754-1 and D.764-1 of the French Code monétaire et financier are eligible to participate in the Exchange Offer. This announcement and the Exchange Offer Memorandum have not been and will not be submitted for clearance to nor approved by the Autorité des marchés financiers ("AMF").

Pursuant to Article 211-3 of the General Regulation of the AMF, Holders and any Direct Participant are informed that the New Notes cannot be distributed (directly or indirectly) to the public in France otherwise than in accordance with Articles L.411-1, L.411-2, L.412-1 and L.621-8 to L.621-8-3 of the French Code monétaire et financier.

Belgium

Neither this announcement, the Exchange Offer Memorandum nor any other documents or materials relating to the Exchange Offer have been submitted to or will be submitted for approval or recognition to the Financial Services and Markets Authority ("Autorité des services et marches financiers / Autoriteit financiële diensten en markten") and, accordingly, the Exchange Offer may not be made in Belgium by way of a public offering, as defined in Articles 3 and 6 of the Belgian Law of 1 April 2007 on public takeover bids (the "Belgian Takeover Law") or as defined in Article 3 of the Belgian Law of 16 June 2006 on the public offer of placement instruments and the admission to trading of placement instruments on regulated markets (the "Belgian Prospectus Law"), both as amended or replaced from time to time. Accordingly, the Exchange Offer may not be advertised and the Exchange Offer will not be extended, and neither this announcement, the Exchange Offer Memorandum nor any other documents or materials relating to the Exchange Offer (including any memorandum, information circular, brochure or any similar documents) has been or shall be distributed or made available, directly or indirectly, to any person in Belgium other than (i) to persons which are "qualified investors" in the sense of Article 10 of the Belgian Prospectus Law, acting on their own account; or (ii) in any other circumstances set out in Article 6, §4 of the Belgian Takeover Law and Article 3, §4 of the Belgian Prospectus Law. This announcement and the Exchange Offer Memorandum has been issued only for the personal use of the above qualified investors and exclusively for the purpose of the Exchange Offer. Accordingly, the information contained in this announcement and the Exchange Offer Memorandum may not be used for any other purpose or disclosed to any other person in Belgium.

General

Neither this announcement nor the Exchange Offer Memorandum constitutes an offer to sell or buy or the solicitation of an offer to sell or buy the Existing Notes and/or New Notes, as applicable, (and offers of Existing Notes for exchange pursuant to the Exchange Offer will not be accepted from Holders) in any circumstances in which such offer or solicitation is unlawful. In those jurisdictions where the securities, blue sky or other laws require the Exchange Offer to be made by a licensed broker or dealer and either of the Dealer Managers or any of their respective affiliates is such a licensed broker or dealer in any such jurisdiction, that Exchange Offer shall be deemed to be made by such Dealer Manager or such affiliate (as the case may be) on behalf of the Issuer in such jurisdiction.

 

Each Holder participating in the Exchange Offer will be deemed to give certain representations in respect of the jurisdictions referred to above and generally as set out in the section of the Exchange Offer Memorandum entitled "Procedures for Participating in the Exchange Offer". Any offer of Existing Notes for exchange pursuant to the Exchange Offer from a Holder that is unable to make these representations will not be accepted. Each of the Issuer, the Dealer Managers and the Exchange Agent reserves the right, in its absolute discretion, to investigate, in relation to the offer of Existing Notes for exchange pursuant to the Exchange Offer, whether any such representation given by a Holder is correct and, if such investigation is undertaken and as a result the Issuer determines (for any reason) that such representation is not correct, such offer shall not be accepted.