The purpose of the consent solicitations and bank credit agreement amendment is to facilitate the implementation of the Corporate Modernization, which, if implemented, would be expected to be completed by the end of 2019.
Owens-Illinois, Inc. (“O-I” or the “Company”) today announced that the Board of Directors of the Company has authorized the commencement of consent solicitations to amend and waive certain provisions in the indentures governing the outstanding senior notes issued by certain of the Company’s subsidiaries and an amendment to the Company’s bank credit agreement.
The purpose of the consent solicitations and bank credit agreement amendment is to facilitate the implementation of the Corporate Modernization (as defined below), which, if implemented, would be expected to be completed by the end of 2019.
The Company believes that the Corporate Modernization would improve the Company’s operating efficiency and cost structure, while ensuring the Company remains well-positioned to address its legacy liabilities.
It is not expected that the Corporate Modernization would result in any change in the public company’s directors, executive officers, management or business, impact the timing of the declaration and payment of regular quarterly dividends, nor, from a credit perspective, affect cash flow support from subsidiaries or change the credit group for purposes of the senior notes issued by the Company’s subsidiaries or the bank credit agreement.
It is intended that the Corporate Modernization, if implemented, should be a tax-free transaction for U.S. federal income tax purposes for O-I and O-I’s stockholders.
The Corporate Modernization, if implemented, would include the creation of a new holding company, O-I Glass, Inc. (“O-I Glass”), which would become the new parent company of O-I, replacing O-I as the public company trading on the New York Stock Exchange under O-I’s current ticker symbol, “OI,” and the automatic conversion of each outstanding share of O-I’s common stock into the right to receive a share of common stock of O-I Glass on a one-for-one basis (the “Reorganization”).
Following the Reorganization, the old parent company would distribute the capital stock of Owens-Illinois Group, Inc. (“OI Group”) to O-I Glass, as a result of which OI Group would be a direct wholly owned subsidiary of O-I Glass (the “Distribution” and, together with the Reorganization and related transactions, the “Corporate Modernization”).
The Company announced that its wholly owned subsidiaries Owens-Brockway Glass Container Inc. (“OBGC”) and OI European Group B.V. (“OIEG” and, together with OBGC, the “Issuers”), commenced consent solicitations with respect to proposed amendments and waivers to certain provisions in the indentures governing OBGC’s 5.000% Senior Notes due 2022, OBGC’s 5.875% Senior Notes due 2023, OBGC’s 5.375% Senior Notes due 2025, OBGC’s 6.375% Senior Notes due 2025, OIEG’s 4.875% Senior Notes due 2021, OIEG’s 4.000% Senior Notes due 2023 and OIEG’s 3.125% Senior Notes due 2024 (collectively, the “Notes”), upon the terms and subject to the conditions set forth in the consent solicitation statement dated December 4, 2019 (“Consent Solicitation Statement”).
Subject to the terms and conditions set forth in the Consent Solicitation Statement, holders of Notes on December 3, 2019 whose consents are received (and not validly revoked) at or prior to 5:00 p.m., New York City time, on December 11, 2019 (unless extended or earlier terminated, the “Expiration Time”) will be eligible to receive the applicable consent fee (each, a “Consent Fee”) with respect to such Notes set forth in the tables below.
|OBGC Notes||CUSIP/ISIN||Consent Feeper 1,000 USDPrincipal Amount||Outstanding PrincipalAmount|
|5.000% Senior Notes due 2022||CUSIP690872 AA4 (144A)|
U6S19G AB3 (Reg S)ISINUS690872AA43 (144A)
USU6S19GAB37 (Reg S)
|2.50 USD||500 million USD|
|5.875% Senior Notes due 2023||CUSIP69073T AR4 (144A)|
U68337 AK7 (Reg S)ISINUS69073TAR41 (144A)
USU68337AK75 (Reg S)
|2.50 USD||700 million USD|
|5.375% Senior Notes due 2025||CUSIP690872 AB2 (144A)|
U6S19G AC1 (Reg S)ISINUS690872AB26 (144A)
USU6S19GAC10 (Reg S)
|2.50 USD||300 million USD|
|6.375% Senior Notes due 2025||CUSIP69073T AS2 (144A)|
U68337 AL5 (Reg S)ISINUS69073TAS24 (144A)
USU68337AL58 (Reg S)
|2.50 USD||300 million USD|
|OIEG Notes||CUSIP/ISIN||Consent Feeper 1,000 EURor 1,000 USD Principal Amount(as applicable)||Outstanding PrincipalAmount|
|4.875% Senior Notes due 2021||ISINXS0908232134 (144A)|
XS0908230781 (Reg S)
|2.50 EUR||118 million EUR|
|4.000% Senior Notes due 2023||CUSIP67777L AC7 (144A)|
N6704R AH4 (Reg S)ISINUS67777LAC72 (144A)
USN6704RAH41 (Reg S)
|2.50 USD||310 million USD|
|3.125% Senior Notes due 2024||ISINXS1405766038 (144A)|
XS1405765907 (Reg S)
The proposed amendments and waivers relate to, but are not conditioned upon, the implementation of the Corporate Modernization discussed above. The Issuers are soliciting consents to amend and waive certain provisions in the indentures governing the Notes in order to facilitate the implementation of the Corporate Modernization.
Adoption of the proposed amendments and waivers with respect to each indenture governing the Notes is conditioned upon receipt of valid consents from the holders of at least a majority in aggregate principal amount of holders under each applicable indenture (the “Requisite Consents”) at or prior to the Expiration Time, as described in the Consent Solicitation Statement.
A supplemental indenture to each applicable indenture implementing the proposed amendments and waivers will be executed promptly upon receipt of the Requisite Consents under each applicable indenture, at which time such supplemental indenture will become effective.
Upon the proposed amendments and waivers becoming effective and operative, all the holders of the applicable series of Notes and their respective transferees will be bound by the terms thereof, even if they did not deliver consents to the proposed amendments and waivers.
The consent solicitations are being made solely on the terms and subject to the conditions set forth in the Consent Solicitation Statement. The Issuers may terminate, extend or amend the consent solicitation with respect to any applicable indenture, as described in the Consent Solicitation Statement, which is available on the consent website: https://sites.dfkingltd.com/oi.
Each of the consent solicitations is conditioned, among other things, on the consummation of the other consent solicitations (except to the extent any other consent solicitation has been terminated or abandoned by the relevant Issuer) and the consummation of the amendment to the bank credit agreement.
The Issuers have retained Wells Fargo Securities, LLC as the solicitation agent (the “Solicitation Agent”) with respect to the Consent Solicitations. Questions may be directed to Wells Fargo Securities at (866) 309-6316 (toll free) or (704) 410-4759 (collect). The Issuers have also appointed D.F. King as information and tabulation agent (the “Information and Tabulation Agent”) with respect to the Consent Solicitations.
Questions and requests for additional documents may be directed to D.F. King at (866) 342-1635 (US toll free), or +1 (212) 269-5550 (bankers and brokers), in the United States, +44 20 7920 9700 in the United Kingdom, or via email at firstname.lastname@example.org.
Beneficial owners of an interest in the Notes whose Notes are held through a broker, dealer, commercial bank, trust company or other nominee should note that their nominee may establish a deadline earlier than the applicable Expiration Time by which instructions must be received by them in relation to the applicable consent solicitation and, accordingly, such beneficial owners are urged to contact their nominees as soon as possible to learn of any deadlines established by their nominees in relation to the applicable consent solicitation.
None of O-I, OI Group, the Issuers, the Solicitation Agent or the Information and Tabulation Agent makes any recommendations as to whether or not holders should consent to the proposed amendments and waivers pursuant to the consent solicitations.
Each holder must make its own decision as to whether to consent to the proposed amendments and waivers.