Head N.V. announced the commencement by HTM, a subsidiary of Head N.V., of a private exchange offer, to exchange its outstanding 135 million ($174.7 million) 8½% senior notes due 2014 for its new 10% senior secured notes due 2014. the company said the purpose of the exchange offer is to reduce HTMs overall indebtedness and related interest expense and to offer existing noteholders the opportunity to be secured creditors of HTM.
The private offer will not be made to all
holders of existing notes, but exclusively to certain holders as further
specified below. The existing notes were, and the new secured notes will be,
issued by HTM Sport- und Freizeitgeräte AG. The secured notes will be jointly
and severally guaranteed by Head N.V. and Head Holding Unternehmensbeteiligung
GmbH (“Head Holding”), HTMs indirect and direct parent companies,
respectively, and certain of HTMs subsidiaries and will be secured by pledges
or charges, as applicable, over certain inventories and trade receivables of
HTM and certain subsidiaries of HTM, and cash under certain circumstances.
Concurrently with the Exchange Offer, HTM is also soliciting consents (the “Consent Solicitation”), from holders of Existing Notes to certain proposed amendments (the “Proposed Amendments”) to the indenture governing the Existing Notes (the “Existing Indenture”). All tenders of Existing Notes which are submitted will be deemed to be consents to the Proposed Amendments as a whole. The Proposed Amendments will reduce the protections afforded to holders of the Existing Notes by (i) eliminating substantially all of the covenants in the Existing Indenture governing the actions of the Issuer and its restricted subsidiaries (ii) eliminating or modifying certain events of default and (iii) modifying Mares S.p.A.s guarantee of the Existing Notes. The supplemental indenture (the “Supplemental Indenture”) giving effect to the Proposed Amendments is expected to be executed on the settlement date of the Exchange Offer, subject to the consent of holders of not less than a majority of the outstanding (determined in accordance with the Existing Indenture) aggregate principal amount of the Existing Notes having validly consented to the Proposed Amendments. The Proposed Amendments will become effective and operative upon execution of the Supplemental Indenture.
The Exchange Offer and the Consent Solicitation will expire at 5:00 p.m., London time, on May 22, 2009, unless extended (the “Expiration Date”). Eligible holders of Existing Notes who validly tender, and do not properly withdraw, their Existing Notes in the Exchange Offer on or prior to 5:00 p.m., London time, on May 11, 2009, unless extended (the “Early Tender Date”) will receive 350 aggregate principal amount of the Secured Notes (the “Early Tender Consideration”) for each 1,000 principal amount of Existing Notes exchanged. Eligible holders of Existing Notes who validly tender their Existing Notes in the Exchange Offer on or prior to the Expiration Date but after the Early Tender Date will receive 300 aggregate principal amount of Secured Notes (the “Exchange Offer Consideration”) for each 1,000 principal amount of Existing Notes exchanged. In addition, on the settlement date, accrued and unpaid interest up to, but not including, the settlement date, if any, will be paid in cash on all properly tendered and accepted Existing Notes. Tenders of Existing Notes may be withdrawn at any time prior to the Early Tender Date, but not thereafter. HTM may terminate or withdraw the Exchange Offer at its sole discretion, at any time and for any reason.
The Secured Notes will be issued in minimum denominations of 1,000 and integral multiples thereof.
The Exchange Offer is being made within the United States only to “qualified institutional buyers” as that term is defined in Rule 144A under the Securities Act of 1933, as amended (the “Securities Act”) and to persons located outside of the United States and who would be participating in any transaction in accordance with Regulation S. The Secured Notes to be offered have not been registered under the Securities Act and may not be offered or sold in the United States absent an applicable exemption from registration requirements. This press release does not constitute an offer to sell or the solicitation of an offer to buy Existing Notes or Secured Notes in any jurisdiction in which such an offer or sale would be unlawful.
The Exchange Offer is not being made and will not be made, directly or indirectly, in or into the Republic of Italy, whether by mail or by any means or other instrument (including, without limitation, telephonically or electronically) or any facility of a national securities exchange publicly or privately available in the Republic of Italy.
HTMs obligation to accept any Existing Notes tendered and to pay the applicable consideration for them is set forth solely in the Offering Circular. The Exchange Offer is made only by, and pursuant to, the terms set forth in the Offering Circular, and the information in this press release is qualified by reference to the Offering Circular. Subject to applicable law, HTM may amend, extend or terminate the Exchange Offer.
An application will be made to admit the Secured Notes to listing on the Official list of the Luxembourg Stock Exchange and to trading on the Euro MTF Market of that exchange.