MONTERREY, Mexico, Nov. 26, 2019 – — Grupo Famsa, S.A.B. de C.V. (the “Issuer”) today announced that it has extended and made other amendments to its previously announced offer to exchange (the “Exchange Offer”) newly issued 9.75% Senior Secured Notes due 2024 (the “New Notes”) for any and all of its outstanding 7.250% Senior Notes due 2020 (the “Existing Notes”), and the related solicitation of consents (the “Consent Solicitation”) of the holders of Existing Notes to certain proposed amendments (the “Proposed Amendments”) to the indenture governing the Existing Notes (the “Existing Indenture”), which would eliminate substantially all of the restrictive covenants and certain events of default contained in the Existing Indenture, among other things. The Exchange Offer and Consent Solicitation are being conducted upon the terms and subject to the conditions set forth in the offering memorandum dated October 28, 2019 (as it may be amended or supplemented from time to time, the “Offering Memorandum”).
In order to provide holders and beneficial owners of Existing Notes with additional time to tender their Existing Notes, the Issuer has decided to extend the Early Tender Deadline and the Expiration Date (each as defined in the Offering Memorandum) to 5:00 p.m., New York City time, on December 10, 2019.
In addition, the Issuer is amending the Exchange Offer by (1) adding a cash payment of US$10 per US$1,000 principal amount of Existing Notes to the Total Consideration (as defined in the Offering Memorandum), (2) adding an additional cash payment of US$2.50 per US$1,000 principal amount of Existing Notes to the Total Consideration in the event that the Minimum Tender Condition (as defined in the Offering Memorandum) is waived by the Issuer, meaning less than US$112,000,000, or 80%, of the aggregate principal amount of the Existing Notes is accepted for exchange, and (3) extending the Withdrawal Deadline (as defined in the Offering Memorandum), which originally expired on November 8, 2019, so that tendering holders of Existing Notes may withdraw tendered Existing Notes at any time prior to 5:00 p.m., New York City time, on November 29, 2019.
The Issuer reserves the right to waive the Minimum Tender Condition at any time. In the event the Minimum Tender Condition is waived, the Issuer does not intend to further extend the Withdrawal Deadline. After 5:00 p.m., New York City time, on November 29, 2019, the Withdrawal Deadline will expire and no further withdrawal rights are expected to be granted. Except as described in this press release, all other terms and conditions of the Exchange Offer and Consent Solicitation as set forth in the Offering Memorandum remain unchanged, including the Requisite Consents Condition (as defined in the Offering Memorandum).
Holders who have previously validly tendered and not withdrawn their Existing Notes will be entitled to receive the additional consideration described in this press release and do not need to re-tender their Existing Notes or take any other action in response to the extension of the Exchange Offer and Consent Solicitation.
The exchange agent for the Exchange Offer has informed the Issuer that as of 5:00 p.m., New York City time, on November 25, 2019, US$76,090,000, or 54.35%, of the outstanding aggregate principal amount of the Existing Notes had been validly tendered in the Exchange Offer. Accordingly, the Issuer has obtained the amount of consents necessary to execute the Proposed Amendments.
The New Notes have not been and will not be registered under the Securities Act of 1933, as amended (the “Securities Act”) or any state securities laws. The New Notes are being offered and issued only (1) in the United States to holders of Existing Notes that are (a) “Accredited Investors” as defined in Rule 501 under Regulation D or (b) “qualified institutional buyers” as defined in Rule 144A under the Securities Act and (2) outside the United States to holders of Existing Notes that are not U.S. persons in reliance upon Regulation S under the Securities Act (each, an “Eligible Holder” and together, the “Eligible Holders”). Accordingly, the New Notes will be subject to restrictions on transferability and resale and may not be transferred or resold except as permitted under the Securities Act and other applicable securities laws, pursuant to registration or exemption therefrom.
This press release is for informational purposes only and is not an offer of the New Notes for sale in the United States. The New Notes may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements of the Securities Act and other applicable securities laws. Any public offering of the New Notes to be made in the Unites States will be made by means of a prospectus that may be obtained from the Issuer and that will contain detailed information about the Issuer and its management, as well as financial statements.
The New Notes have not been and will not be registered with the National Securities Registry maintained by the Mexican National Banking and Securities Commission, and may not be offered or sold publicly, or otherwise be the subject of brokerage activities, in Mexico, except pursuant to a private placement exemption set forth under Article 8 of the Ley del Mercado de Valores, as amended (the Mexican Securities Market Law). The acquisition of the New Notes by an investor who is a resident of Mexico will be made under its own responsibility.
This press release shall not constitute an offer to sell or the solicitation of an offer to buy any security and shall not constitute an offer, solicitation or sale in any jurisdiction in which such offering, solicitation or sale would be unlawful.
The Exchange Offer and Consent Solicitation are being made solely pursuant to the Offering Memorandum. The Offering Memorandum will be distributed only to holders of Existing Notes that complete and return a letter of eligibility confirming that they are Eligible Holders for the purposes of the Exchange Offer. The website to complete the Eligibility Form is www.dfking.com/famsa. D.F. King & Co., Inc. is acting as the Information Agent for the Exchange Offer. Requests for the Offering Memorandum from Eligible Holders may be directed to D.F. King & Co., Inc. at (212) 269‑5550 (for brokers and banks), (866) 207‑2239 (for all others) or email email@example.com.
Neither the Issuer, its board nor any other person makes any recommendation as to whether the holders of the Existing Notes should exchange their notes, and no one has been authorized to make such a recommendation. Holders of the Existing Notes must make their own decisions as to whether to exchange their notes, and if they decide to do so, the principal amount of the notes to exchange.
About Grupo Famsa
Established in 1970 in Monterrey, Nuevo Leon, Mexico, Grupo Famsa is a leading company in the Mexican retail sector, satisfying families’ diverse purchasing, financing and savings needs. Its target market is the middle and low-middle income segments of Mexico’s population and the Hispanic population in the U.S. states where it operates. Grupo Famsa’s Mexican retail operation offers furniture, electronics, household appliances, cellular telephones, computers, motorcycles, clothing and other durable consumer products, which are sold mainly through its Famsa stores. In the states of Texas and Illinois in the United States, Grupo Famsa offers furniture and appliances through its subsidiary, Famsa, Inc.
This release may contain forward-looking statements. These forward-looking statements include, without limitation, those regarding the Issuer’s future financial position and results of operations, the Issuer’s strategy, plans, objectives, goals and targets, future developments in the markets in which the Issuer participates or is seeking to participate or anticipated regulatory changes in the markets in which the Issuer operates or intends to operate. By their nature, forward-looking statements involve risks and uncertainties because they relate to events and depend on circumstances that may or may not occur in the future. The Issuer cautions potential investors that forward-looking statements are not guarantees of future performance and are based on numerous assumptions and that the Issuer’s actual results of operations, including the Issuer’s financial condition and liquidity may differ materially from (and be more negative than) those made in, or suggested by, any forward-looking statements contained in this release. In addition, even if the Issuer’s results of operations, including the Issuer’s financial condition and liquidity and the development of the industries in which the Issuer operates, are consistent with the forward-looking statements contained in this release, those results or developments may not be indicative of results or developments in subsequent periods. More detailed information about these and other factors are set forth in the Offering Memorandum.
Paloma E. Arellano Bujanda
Tel. (81) 8389-3400 ext. 1419
SOURCE Grupo Famsa, S.A.B. de C.V.