Owens-Illinois, Inc. (“O-I” or the “Company”) announced that, according to information provided by D.F. King, as information and tabulation agent, each of Owens-Brockway Glass Container Inc. (“OBGC”) and OI European Group B.V. (“OIEG” and, together with OBGC, the “Issuers”), each an indirect wholly owned subsidiary of the Company, has received the Requisite Consents (as defined below) in its previously announced solicitations (together, the “Consent Solicitations”) of consents (the “Consents”) to amend the indentures (collectively, 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”). Each of the Consent Solicitations expired at 5:00 p.m., New York City time, on December 11, 2019 (the “Expiration Time”).
The Company also sought and received, from the requisite lenders thereunder, consent for an amendment to its Third Amended and Restated Credit Agreement and Syndicated Facility Agreement, dated June 25, 2019 (the “BCA” and such amendment, the “BCA Amendment”) among Owens-Illinois Group, Inc. (“O-I Group”), OBGC, OIEG, the other borrowers party thereto, the lenders from time to time party thereto and Deutsche Bank AG New York Branch, as administrative agent and collateral agent. The effectiveness of the BCA Amendment is subject to certain conditions contained therein. The Company expects the BCA Amendment to become effective and operative as of December 13, 2019.
The purpose of the Consent Solicitations and the BCA 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 Corporate Modernization 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 and replace 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 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 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 BCA. 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 proposed amendments and waivers (the “Proposed Amendments and Waivers”), as more fully described in the Consent Solicitation Statement, relate to, but are not conditioned upon, the implementation of the Corporate Modernization. The Issuers solicited consents to amend or waive certain provisions in the Indentures in order to facilitate the implementation of the Corporate Modernization.
The Consent Solicitations were each subject to customary conditions, including, among other things, receipt of valid and unrevoked Consents from the holders of at least a majority in aggregate principal amount of Notes outstanding under each relevant Indenture (the “Requisite Consents”) at or prior to the Expiration Time, as described in the Consent Solicitation Statement. On December 11, 2019, the Company informed the trustees under each of the Indentures that the Requisite Consents under each of the Indentures had been validly delivered and not revoked.
Accordingly, on December 11, 2019, OBGC and OIEG, as applicable, entered into supplemental indentures (collectively, the “Supplemental Indentures”) to the relevant Indentures reflecting the Proposed Amendments and Waivers. Although each Supplemental Indenture became effective upon its execution and delivery, the Proposed Amendments and Waivers will not become operative unless and until the remaining conditions to the relevant Consent Solicitation (described in the Consent Solicitation Statement) have been satisfied or waived and the applicable aggregate cash payment equal to the amount set forth in the table below (the “Consent Fee”) has been paid with respect to the relevant series of Notes for which Consents to the Proposed Amendments and Waivers were validly delivered to the tabulation agent prior to the relevant Expiration Time. 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.
|Consent Fee per
|5.000% Senior Notes due 2022||CUSIP
690872 AA4 (144A)
|2.50 USD||500 million USD|
|5.875% Senior Notes due 2023||CUSIP
69073T AR4 (144A)
|2.50 USD||700 million USD|
|5.375% Senior Notes due 2025||CUSIP
690872 AB2 (144A)
|2.50 USD||300 million USD|
|6.375% Senior Notes due 2025||CUSIP
69073T AS2 (144A)
|2.50 USD||300 million USD|
|OIEG Notes||CUSIP/ISIN/Common Code||Consent Fee per
|4.875% Senior Notes due 2021||ISIN
|4.000% Senior Notes due 2023||CUSIP
67777L AC7 (144A)
|2.50 USD||310 million USD|
|3.125% Senior Notes due 2024||ISIN
- Represents the aggregate principal amount of outstanding OIEG 4.875% 2021 Notes as of the date hereof. On November 22, 2019, OIEG redeemed 212 million EUR aggregate principal amount of the 330 million EUR aggregate principal amount of OIEG 4.875% 2021 Notes outstanding prior to such partial redemption. As a result, a pool factor of 35.757575759% applies to the OIEG 4.875% 2021 Notes, and the relevant Consent Fee payable with respect to the OIEG 4.875% 2021 Notes shall be based on the amount of outstanding OIEG 4.875% 2021 Notes after giving effect to such pool factor.
The Issuers each expect to make payment of the relevant Consent Fees on or about December 13, 2019.
Wells Fargo Securities, LLC acted as solicitation agent and D.F. King acted as information and tabulation agent in connection with the Consent Solicitations.
Copies of the Consent Solicitation Statement and other documents related to the Consent Solicitations are available on the consent website: https://sites.dfkingltd.com/oi.