U.S.J. – Açúcar E Álcool S.A. Announces Exchange Offer And Consent Solicitation

SÃO PAULO, March 25, 2019 /PRNewswire/ — U.S.J. – Açúcar e Álcool S.A. (the “Company”), announced today that it has commenced a private exchange offer (the “Exchange Offer”) for any and all of its outstanding (i) 9.875% Senior Notes due 2019 (the “2019 Notes”) and (ii) 9.875%/12.00% Senior Secured PIK Toggle Notes due 2021 (the “2021 Notes” and, together with the 2019 Notes, the “Existing Notes”), in each case held by Eligible Holders (as defined below), for its newly issued 8.500%/9.875% Senior Secured PIK Notes Due 2023 (the “New Notes”) and, in the case of 2019 Notes only, New Notes and cash.

Concurrently with the Exchange Offer for the 2021 Notes, the Company is soliciting consents (the “Consent Solicitation” and, together with the Exchange Offer, the “Exchange Offer and Consent Solicitation”) from the Eligible Holders of the 2021 Notes to (i) certain proposed amendments to the indenture governing the 2021 Notes, which would eliminate substantially all of the restrictive covenants and certain events of default and related provisions under such indenture and (ii) terminate the security agreements and release the security interests in the collateral securing the 2021 Notes (collectively, the “Proposed Amendments”).

The Exchange Offer and Consent Solicitation are being made pursuant to an Exchange Offer Memorandum and Consent Solicitation Statement, dated March 25, 2019 (as may be amended or supplemented from time to time, the “Exchange Offer Memorandum”), which contains detailed information concerning the terms of the Exchange Offer and the Consent Solicitation.

Holders who tender 2021 Notes must also consent to the Proposed Amendments.  Holders of 2021 Notes may not deliver consents to the Proposed Amendments without validly tendering the 2021 Notes in the Exchange Offer for the New Notes and may not revoke their consents without withdrawing the previously tendered 2021 Notes to which they relate. The Proposed Amendments will be set forth in a supplemental indenture relating to the 2021 Notes and are described in more detail in the Exchange Offer Memorandum. Adoption of the Proposed Amendments requires the delivery of consents by holders of 2021 Notes of at least 66-2/3% of the aggregate outstanding principal amount of 2021 Notes.

Certain information regarding the Existing Notes and the terms of the Exchange Offer and the Consent Solicitation is summarized in the table below.

CUSIP

No.

ISIN No.

Series of
Existing Notes

Outstanding

Principal

Amount

Series of
New Notes

Exchange

Consideration(1)(2)

Total Exchange

Consideration(1)(2)(3)

90346J

AA0/

P9634C

AA9

US90346JAA07/

USP9634CAA91

9.875% Senior

Notes due 2019

U.S.$ 

29,104,000

8.500%/9.875% Senior

Secured PIK Notes due

2023

U.S.$316 in cash

and New Notes in an

amount equal to

U.S.$634

U.S.$333 in cash and

New Notes in an

amount equal to

U.S.$667








90346J

AB8/P96

34C AB7

US90346JAB89/US

P9634CAB74

9.875%/12.00%

Senior Secured

PIK Toggle

Notes due 2021

U.S.$

248,122,575

8.500%/9.875% Senior

Secured PIK Notes due

2023

U.S.$950

U.S.$1,000

__________

(1)

Consideration per U.S.$1,000 principal amount of each of the outstanding Existing Notes that are validly tendered and not validly withdrawn, subject to any rounding as described herein.

(2)

Plus accrued and unpaid interest on each of the Existing Notes up to but excluding the settlement date, which will be added to the principal amount of the New Notes.

(3)

Includes the Early Exchange Payment for each of the Existing Notes validly tendered on or prior to the Early Expiration Date and not validly withdrawn.

Eligible Holders who validly tender their Existing Notes and deliver their consents on or prior to 5:00 p.m., New York City time, on April 5, 2019, unless extended (the “Early Expiration Date”), will receive (i) in the case of the 2019 Notes, for each U.S.$1,000 principal amount of Existing Notes accepted for exchange, cash in an amount equal to U.S.$333 plus New Notes in an amount equal to U.S.$667, and (ii) in the case of the 2021 Notes, for each U.S.$1,000 principal amount of Existing Notes accepted for exchange, U.S.$1,000 principal amount of New Notes. Eligible Holders who validly tender their Existing Notes on or prior to 11:59 p.m., New York City time, on April 19, 2019, unless extended (the “Expiration Date”), but after the Early Expiration Date, will receive (i) in the case of the 2019 Notes, for each U.S.$1,000 principal amount of Existing Notes accepted for exchange, cash in an amount equal to U.S.$316 and New Notes in an amount equal to U.S.$634 and (ii) in the case of the 2021 Notes for each U.S.$1,000 in principal amount of Existing Notes accepted for exchange, U.S.$950 principal amount of New Notes. The amount of New Notes to be issued to any holder will be issued in minimum denominations of U.S.$1.00 and integral multiples of U.S.$1.00 in excess thereof.

2019 Notes tendered may be withdrawn at any time prior to the Early Expiration Date, but not thereafter, unless required by applicable law. 2021 Notes tendered may be withdrawn and consents for the Proposed Amendments delivered may be revoked at any time prior to the execution of the supplemental indenture, but not thereafter, unless required by applicable law. 

The Total Exchange Consideration and the Exchange Consideration include accrued and unpaid interest on Existing Notes accepted for exchange from the last interest payment date of the Existing Notes up to but excluding the settlement date, which will be added, in each case, to the principal amount of the New Notes.  

The consummation of the Exchange Offer and Consent Solicitation are conditioned upon the valid tender, without subsequent withdrawal, of at least 67% of the aggregate principal amount of the outstanding 2019 Notes and at least 95% of the aggregate principal amount of the outstanding 2021 Notes.  The consummation of the Exchange Offer and Consent Solicitation are also subject to the filing for registration with the competent registries in Brazil of the instruments for Release of the collateral securing the 2021 Notes and of the instruments establishing the fiduciary assignment and pledge of the collateral securing the New Notes, and the satisfaction or waiver of certain other conditions. In addition, the Company has the right to terminate or withdraw the Exchange Offer and Consent Solicitation and extend the Early Expiration Date or Expiration Date in its sole discretion, subject to applicable law.

Morgan Stanley & Co. LLC and Santander Investment Securities Inc. are acting as dealer managers for the Exchange Offer and the solicitation agents for the Consent Solicitation and can be contacted at their telephone numbers set forth on the back cover page of Exchange Offer Memorandum with questions regarding the Exchange Offer and the Consent Solicitation.

D.F. King & Co., Inc. has been appointed as the information agent and the exchange agent for the Offer. Holders may contact the information agent to request the eligibility letter at (212) 269-5550 or toll free at (877) 283-0318, email at usj@dfking.com or complete the eligibility letter at www.dfking.com/usj.  

The Exchange Offer and Consent Solicitation is being made, and the New Notes are being offered and will be issued, only:

     (a) in the United States, to holders of Existing Notes who are “Qualified Institutional Buyers” (as defined in Rule 144A under the Securities Act of 1933, as amended (the “Securities Act”));

     (b) outside the United States, subject to items (c) and (d) below, to holders of Existing Notes who are persons other than “U.S. Persons” (as defined in Regulation S under the Securities Act);

     (c) in the EEA, to holders of Existing Notes who are (i) persons other than U.S. Persons, and (ii) who are not retail investors. For the purposes hereof, the expression retail investor means a person who is (i) a retail client as defined in point (11) of Article 4(1) of Directive 2014/65/EU (as amended, “MiFID II”); (ii) a customer within the meaning of Directive 2002/92/EC (as amended, the “Insurance Mediation Directive”), where that customer would not qualify as a professional client as defined in point (10) of Article 4(1) of MiFID II; or (iii) “Qualified Investors” as defined in Directive 2003/71/EC (as amended, the “Prospectus Directive”);

     (d) in the UK, to holders of Existing Notes who are persons other than U.S. Persons, and who are (i) investment professionals falling within Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (the “Order”); (ii) persons who are within Article 43(2) of the Order; or (iii) high net worth companies, and other persons, falling within Article 49(2)(a) to (d) of the Order.

     The holders of Existing Notes who have certified to the Company that they are eligible to participate in the Exchange Offer and Consent Solicitation pursuant to at least one of the foregoing conditions are referred to as “Eligible Holders.”

The Exchange Offer and the New Notes have not been, and will not be, registered with the Brazilian Comissão de Valores Mobiliários (CVM). The Exchange Offer and the New Notes are not offered or sold in Brazil, except in circumstances that do not constitute a public offering or unauthorized distribution under Brazilian laws and regulations.

The New Notes have not been registered under the Securities Act or any state securities laws.  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 neither an offer to sell nor the solicitation of an offer to buy any security. This press release is also not a solicitation of any consent to the Proposed Amendments. The Exchange Offer and Consent Solicitation is being made solely pursuant to the Exchange Offer Memorandum. No recommendation is made as to whether the holders of Existing Notes should tender their Existing Notes for exchange and deliver their consents in the Exchange Offer and Consent Solicitation.

NOTICE REGARDING FORWARD-LOOKING STATEMENTS

This press release contains statements that are forward-looking within the meaning of Section 27A of the U.S. Securities Act of 1933, as amended, and Section 21E of the U.S. Securities Exchange Act of 1934, as amended. Forward-looking statements are only predictions and are not guarantees of future performance. Investors are cautioned that any such forward-looking statements are and will be, as the case may be, subject to many risks, uncertainties and factors relating to the Company that may cause the actual results to be materially different from any future results expressed or implied in such forward-looking statements. Although the Company believes that the expectations and assumptions reflected in the forward-looking statements are reasonable based on information currently available to the Company’s management, the Company cannot guarantee future results or events. The Company expressly disclaims a duty to update any of the forward-looking statements.

SOURCE Acucar e Alcool S.A.

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