GrafTech International Ltd. (NYSE:GTI) today announced it has
consummated the previously announced sale of $150 million of
preferred equity to an affiliate of Brookfield Asset Management
Inc. (NYSE: BAM) (TSX: BAM.A) (Euronext: BAMA) (Brookfield).
Under the terms of the investment agreement, GrafTech issued to
Brookfield, in a private offering convertible preferred shares in
two series, series A shares and series B shares. The series A
shares are immediately convertible into GrafTech common shares
equal to approximately 19.9% of the currently outstanding shares of
GrafTech common stock, at a conversion price of $5.00 per common
share, subject to customary anti-dilution adjustments. The series B
shares will become convertible into common shares equal to
approximately 2% of the currently outstanding shares only upon
approval by GrafTech stockholders in accordance with New York Stock
Exchange requirements. If approved, the two series will be combined
into one series.
Both series of convertible preferred shares are entitled to
dividends at a 7% annual rate. Dividends are cumulative and will
accrue until paid. The proceeds from the sale of the convertible
preferred stock, together with other cash and credit resources of
the Company, will be used to promptly repay the Company’s currently
outstanding $200 million senior subordinated notes in accordance
with the requirements of the Company’s principal revolving credit
facility.
Pursuant to the terms of the investment agreement, GrafTech has
expanded the size of its Board of Directors to nine members and
appointed two designees of Brookfield, Peter Gordon and Denis
Turcotte, to the Company’s Board. Mr. Gordon, a Managing Partner of
Brookfield, has over 25 years of industrial experience and has held
numerous senior management positions in Brookfield portfolio
companies. Mr. Turcotte, President and Chief Executive Officer
(CEO) of North Channel Management and North Channel Capital
Partners, was named CEO of the year by Canadian Business Magazine
during his tenure as President, CEO and Director of Algoma Steel
Inc.
As previously announced, a separate tender offer by Brookfield
to acquire up to all outstanding shares of GrafTech common stock,
at a purchase price of $5.05 per share, will expire at 12:00
midnight, New York City time, at the end of August 13, 2015, unless
extended in accordance with the terms of the merger agreement and
the applicable rules and regulations of the Securities and Exchange
Commission.
About GrafTech
GrafTech International is a global company that has been
redefining limits for more than 125 years. We offer innovative
graphite material solutions for our customers in a wide range of
industries and end markets, including steel manufacturing, advanced
energy applications and latest generation electronics. GrafTech
operates 18 principal manufacturing facilities on four continents
and sells products in over 70 countries. Headquartered in
Independence, Ohio, GrafTech employs approximately 2,400 people.
For more information, call 216-676-2000 or visit
www.GrafTech.com.
Additional Information
This communication does not constitute an offer to buy or
solicitation of an offer to sell any securities. This communication
is for informational purposes only. The tender offer is not being
made to, nor will tenders be accepted from, or on behalf of,
holders of shares in any jurisdiction in which the making of the
tender offer or the acceptance thereof would not comply with the
laws of that jurisdiction. The tender offer is being made pursuant
to a tender offer statement on Schedule TO (including the Offer to
Purchase, a related Letter of Transmittal and other offer
materials) filed by BCP IV Graftech Holdings LP (“Purchaser”) and
Athena Acquisition Subsidiary Inc. (“Acquisition Sub”) with the
U.S. Securities and Exchange Commission (“SEC”) on May 26, 2015, as
amended from time to time. In addition, on May 26, 2015, Purchaser,
Acquisition Sub and GrafTech, among others, filed a transaction
statement on Schedule 13E-3 with the SEC related to the tender
offer and GrafTech filed a Solicitation/Recommendation statement on
Schedule 14D-9 with the SEC related to the tender offer.
Stockholders of GrafTech are urged to read these documents, all
amendments thereto and other documents filed with the SEC carefully
in their entirety because they contain important information about
the tender offer. The tender offer statement and certain other
offer documents, along with the Solicitation/Recommendation
statement, will be made available to all stockholders of GrafTech
at no expense to them. These documents are available at no charge
through the web site maintained by the SEC at http://www.sec.gov.
The Offer to Purchase, related Letter of Transmittal, the
Solicitation/Recommendation statement and other offering documents
may also be obtained for free by contacting the Information Agent
for the tender offer, Georgeson, toll-free at 866-856-2826.
NOTE ON FORWARD-LOOKING STATEMENTS: This news release and
related discussions may contain forward-looking statements about
such matters as: the use of proceeds from the issuance of
convertible preferred stock and related matters; a tender offer and
possible merger, the conditions to consummation thereof, the terms
thereof and related matters; the effects of such issuance, tender
offer and merger under equity award and benefit plans and
agreements or our credit agreement, senior notes or senior
subordinated notes; our outlook for 2015 or beyond; future or
targeted operational and financial performance; growth prospects
and rates; the markets we serve and our position in those markets;
future or targeted profitability, cash flow, liquidity, sales,
costs and expenses, tax rates, working capital, production rates,
inventory levels, debt levels, capital expenditures, EBITDA, cost
savings and business opportunities and positioning; strategic
plans; stock repurchase or issuance plans; inventory and supply
chain management; rationalization and related activities; the
impact of rationalization, product line change, cost and liquidity
initiatives; expected or targeted changes in production capacity or
levels, operating rates or efficiency in our operations or our
competitors' or customers' operations; future prices and demand for
our products; product quality; diversification, new products, and
product improvements and their impact on our business; the
integration or impact of acquired businesses; divestitures, asset
sales, investments and acquisitions that we may make in the future;
possible debt or equity financing or refinancing (including
factoring and supply chain financing) activities; our customers'
operations, order patterns and demand for their products; the
impact of customer bankruptcies; regional and global economic and
industry market conditions, including our expectations concerning
their impact on us and our customers and suppliers; conditions and
changes in the global financial and credit markets; legal
proceedings and antitrust investigations; our liquidity and capital
resources, including our obligations under our senior subordinated
notes that mature in November 2015; a pending proxy contest, the
impacts thereof and other possible changes in Board composition;
possible changes in control of the Company and the impacts thereof;
tax rates and the effects of jurisdictional mix; the impact of
accounting changes; and currency exchange and interest rates and
changes therein.
We have no duty to update these statements. Our expectations and
targets are not predictions of actual performance and historically
our performance has deviated, often significantly, from our
expectations and targets. Actual future events, circumstances,
performance and trends could differ materially, positively or
negatively, due to various factors, including: failure to satisfy
closing conditions in the definitive agreement relating to the
tender offer and merger; including due to material adverse changes
effecting the Company or its prospects; litigation in relation to
such transactions; failure to achieve production rate, inventory
level, product development, capital expenditure level, cost
savings, EBITDA or other targets or estimates; actual outcome of
uncertainties associated with assumptions and estimates used when
applying critical accounting policies and preparing financial
statements; failure to successfully develop and commercialize new
or improved products; adverse changes in cost, inventory or supply
chain management; limitations or delays on capital expenditures;
business interruptions, including those caused by weather, natural
disaster, or other causes; delays or changes in, or
non-consummation of, proposed asset sales, divestitures,
investments or acquisitions; failure to successfully integrate or
achieve expected savings, synergies, performance or returns
expected from any completed asset sales, divestitures, investments
or acquisitions; inability to protect our intellectual property
rights or infringement of intellectual property rights of others;
changes in market prices of our securities; changes in our ability
to obtain new or refinance existing financing on acceptable terms;
adverse changes in labor relations; adverse developments in legal
proceedings or investigations; non-realization of anticipated
benefits from, or variances in the cost or timing of,
organizational changes, rationalizations and restructurings; loss
of market share or sales due to rationalization, product line
changes, or pricing activities; negative developments relating to
health, safety or environmental compliance, remediation or
liabilities; downturns, production reductions or suspensions, or
other changes in steel, electronics and other markets we or our
customers serve; customer or supplier bankruptcy or insolvency
events; political unrest which adversely impacts us or our
customers' businesses; declines in demand; intensified competition
and price or margin decreases; graphite electrode and needle coke
manufacturing capacity increases; fluctuating market prices for our
products, including adverse differences between actual graphite
electrode prices and spot or announced prices; consolidation of
steel producers; mismatches between manufacturing capacity and
demand; significant changes in our provision for income taxes and
effective income tax rate; changes in the availability or cost of
key inputs, including petroleum, petroleum-based coke or energy;
changes in interest or currency exchange rates; inflation or
deflation; changes in Board composition or control of the Company
or changes in capital structure or share ownership; failure to
satisfy conditions to government grants; continuing uncertainty
over fiscal or monetary policies or conditions in the U.S., Europe,
China or elsewhere; changes in fiscal and monetary policy; a
protracted regional or global financial or economic crisis; and
other risks and uncertainties, including those detailed in our SEC
filings, as well as future decisions by us. This news release does
not constitute an offer or solicitation as to any securities.
References to street or analyst earnings estimates mean those
published by First Call.
GTI-G
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version on businesswire.com: http://www.businesswire.com/news/home/20150811006390/en/
GrafTech International Ltd.Kelly Taylor, 216-676-2000Director,
Investor Relations
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