CARMAGNOLA, Italy, March 19 /CNW/ - TK Aluminum Ltd. (the "Company"), the
indirect parent of Teksid Aluminum Luxembourg S.à.r.l., S.C.A., announced
today that it has executed amended and restated agreements and completed the
sale of certain of its assets and operations in North America and its
operations and interests in South America to Tenedora Nemak, S.A. de C.V.
("Nemak"), a subsidiary of ALFA, S.A.B. de C.V. ("ALFA"). Pursuant to the
revised terms of the Nemak transaction, the Company remains obligated to sell
its assets and operations in Poland and a 70% equity interest in its Chinese
Under the revised Nemak transaction, the Company is entitled to receive
an aggregate amount of US$485 million in cash, subject to certain adjustments,
together with a synthetic equity interest in the Nemak business post-closing,
which, after giving effect to the completion of Nemak's acquisition of Norsk
Hydro, is expected to be no greater than 6.68%. The synthetic equity interest
is subject to downward revision for various indemnities, guarantees and
repayment of the US$25 million loan issued in connection with the transaction.
The synthetic equity interest is also subject to adjustment for certain
dilutive events, changes in capitalization and the occurrence of certain major
transactions. Pursuant to the revised terms of the Nemak transaction, Nemak is
obligated to provide the Company with certain limited assistance, including
the assumption of up to US$2 million in liabilities in connection with the
reorganization of the Company's remaining operations. In addition, ALFA has
agreed to provide credit enhancement to support up to US$25 million of letters
of credit in favor of commercial counterparties to replace arrangements under
the Company's senior credit facility.
The Company also announced that approximately 82% of the EUR240,000,000
aggregate principal amount of the Company's outstanding 11 3/8% Senior Notes
due 2011 (the "Senior Notes") were validly delivered in its previously
announced solicitation, which expired on March 8, 2007. Consequently, the
Company and the indenture trustee executed a supplemental indenture (the
"Supplemental Indenture"), effective as of March 15, 2007.
The Supplemental Indenture(i) permits the Nemak transaction on the terms
contained in the amended and restated agreements; and (ii) implements the
other terms that were agreed to with the financial and legal advisors to the
adhoc committee of Noteholders, which were previously announced in the
Company's February 27, 2007 press release. The Indenture amendments and terms
of the consent solicitation are described in the Consent Solicitation
Statement dated March 2, 2007.
As consideration for the initial sale of assets and operations in North
and South America being purchased, the Company received US$414 million in
cash along with a 5.64% synthetic equity interest in the Nemak business.
Pursuant to the revised terms of the Nemak transaction, the Company would
be entitled to additional cash consideration and additional synthetic equity
interest in connection with subsequent sales of certain of its remaining
operations and interests. There can be no assurance that these sales will
The proceeds from the initial sale were used in part to fund the
repayment of certain of the Company's then outstanding debt, including the
senior secured credit facilities (both the first lien revolver and the second
lien facility) and required repayments under capitalized leases. In addition,
proceeds will also be used to fund the anticipated tax payments as a result of
this transaction, and various other payments, including fees and expenses, and
to commence the tender offer required by the Supplemental Indenture.
In parallel with the Nemak transaction, Teksid Aluminum has continued to
pursue alternatives with regard to its remaining operations, principally
located in France, Italy and Germany. As previously reported, the Company is
in discussions with potential purchasers of these operations. The consummation
of a transaction remains subject to a number of conditions, including
execution of a definitive agreement, regulatory approvals, completion of
satisfactory due diligence, and approval by the board of directors of the
Company. There can be no assurance that a definitive agreement with any party
will be executed on acceptable terms or at all. Additionally, even assuming
acceptable terms are reached, there can be no assurance that the required
conditions of such transactions would be met, including any requirement to
receive consent of the Noteholders.
About Teksid Aluminum
Teksid Aluminum is an independent manufacturer of aluminum engine
castings for the automotive industry. Our principal products are cylinder
heads, engine blocks, transmission housings and suspension components.
Information about Teksid Aluminum is available on our website at
For further information:
For further information: Investor Relations at (248) 304-4001 or email