Warrior Met Coal announces launch of concurrent tender offers for senior secured notes

Concurrently with, but separate from, the Restricted Payment Offer, the company announced the commencement of a cash tender offer (the “Tender Offer” and, together with the Restricted Payment Offer, the “Offers”) to purchase up to US$150 million principal amount of the Notes at a repurchase price of 104.25% of the aggregate principal amount of such Notes, plus accrued and unpaid interest to, but not including, the date of repurchase (the “Tender Offer Repurchase Price”).

The Restricted Payment Offer and Tender Offer are two separate offers. Notes validly tendered in the Restricted Payment Offer (and not validly withdrawn) may not be tendered in the Tender Offer, and Notes validly tendered in the Tender Offer (and not validly withdrawn) may not be tendered in the Restricted Payment Offer.

Subject to approval by the board of directors of the company, following the consummation of the Restricted Payment Offer, the company intends to make in the future one or more restricted payments (the “Proposed Restricted Payment”) in the form of special dividends to holders of the company’s common stock and/or repurchases of the company’s common stock in the aggregate amount of US$150 million (subject to increase for the amount of any Declined Amounts (as defined below)).

The Restricted Payment Offer

The Restricted Payment Offer will expire at 5:00 P.M. New York City time, on 22 March 2019 (such date and time, the “Expiration Date”), and the date of repurchase will be 25 March 2019 (the “RP Repurchase Date”).

The company is making the Restricted Payment Offer pursuant to the indenture governing the Notes (the “Indenture”), which provides that, prior to declaring or making any “Restricted Payment” (as defined in the Indenture), in reliance on the definition of Cumulative Credit (as defined in the Indenture) or in reliance on the company’s pro forma Total Indebtedness Leverage Ratio (as defined in the Indenture), the company shall commence an offer to repurchase an aggregate principal amount of the Notes equal to the amount of such proposed Restricted Payment. The company is therefore making the Restricted Payment Offer in accordance with the terms of the Indenture prior to declaring or making the Proposed Restricted Payment.

Under the Restricted Payment Offer, the company is offering to repurchase from holders of the Notes (each a “Holder” and, collectively, the “Holders") their pro rata portion of up to US$150 million principal amount of Notes. As of the date hereof, the aggregate principal amount of Notes outstanding is US$475 million. As a result:

(1) an automatic pro ration factor of 31.5789% shall apply to the principal amount of Notes tendered (rounded down to avoid the purchase of Notes in a principal amount other than in integrals of US$1000) (the “RP Pro-Rated Tendered Notes”), and the company will accept the RP Pro-Rated Tendered Notes for payment of the Restricted Payment Repurchase Price in cash; and

(2) the remaining balance of the principal amount of the Notes tendered that are not RP Pro-Rated Tendered Notes will not be accepted for payment by the company and will be returned to the tendering Holder on the RP Repurchase Date.

Upon the terms and subject to the conditions of the Restricted Payment Offer and subject to applicable law, the company will accept for payment all RP Pro-Rated Tendered Notes validly tendered (and not validly withdrawn) on or prior to the Expiration Date in the Restricted Payment Offer at the Restricted Payment Repurchase Price.

Pursuant to the Indenture, each Holder will have the right to decline the purchase of its pro rata portion of Notes in the Restricted Payment Offer (the aggregate principal amount of such Notes that decline, the “Declined Amounts”). Any Declined Amounts may be retained by the Company and used for any purpose not otherwise prohibited by the Indenture, including the making of Restricted Payments (as defined in the Indenture) with such Declined Amounts, at any time and from time to time, without having to make another offer to repurchase an aggregate principal amount of the Notes equal to the amount of such proposed Restricted Payment.

In no event will the company repurchase any amount of Notes from any Holder in excess of the RP Pro-Rated Tendered Notes tendered by such Holder. The automatic pro ration factor of 31.5789% shall apply to the principal amount of Notes tendered by each Holder regardless of the principal amount of Notes tendered by Holders in the aggregate in the Restricted Payment Offer. If the aggregate principal amount of Notes tendered in the Restricted Payment Offer is less than US$475 million then the company will repurchase less than US$150 million aggregate principal amount of Notes in the Restricted Payment Offer. Additionally, in such event, there will be Declined Amounts equal to the difference between US$150 million and the amount of RP Pro-Rated Tendered Notes repurchased in the Restricted Payment Offer.

For example, if the principal amount of Notes tendered is US $475 million the company will repurchase US$150 million of principal amount of RP Pro-Rated Tendered Notes in the Restricted Payment Offer and there will be no Declined Amounts. If the principal amount of Notes tendered is US$300 million the company will repurchase approximately US$95 million of principal amount of RP Pro-Rated Tendered Notes in the Restricted Payment Offer and approximately US$55 million will be the Declined Amounts.

Notes that are tendered in the Restricted Payment Offer may be withdrawn at any time prior to the Expiration Date.

Holders should note that the Tender Offer Repurchase Price is higher than the Restricted Payment Repurchase Price. The procedures for tendering Notes in the Tender Offer and the Restricted Payment Offer are separate. Notes validly tendered (and not validly withdrawn) in the Tender Offer may not be tendered in the Restricted Payment Offer, and Notes validly tendered (and not validly withdrawn) in the Restricted Payment Offer may not be tendered in the Tender Offer. The Restricted Payment Offer is not conditioned upon the Tender Offer and the Tender Offer is not conditioned on the Restricted Payment Offer. The company may determine, in its sole discretion, to terminate, abandon, fail to consummate, postpone or amend the Tender Offer without terminating, postponing or amending the Restricted Payment Offer.

This announcement does not constitute an offer to buy or the solicitation of an offer to sell Notes in any circumstances in which such offer or solicitation is unlawful, and does not constitute an offer, solicitation or sale in any state or jurisdiction in which such offer, solicitation or sale is unlawful. The Restricted Payment Offer is being made only by means of the Restricted Payment Notice and Offer to Purchase and the related Letter of Transmittal (the “Restricted Payment Offer Documents”), which contain the complete terms and conditions of the Restricted Payment Offer. The Restricted Payment Offer is subject to the satisfaction or waiver of certain conditions, as set forth in the Restricted Payment Offer Documents. Holders should carefully read the Restricted Payment Offer Documents before any decision is made with respect to the Restricted Payment Offer.

D.F. King & Co., Inc. has been appointed as the Tender Agent and Information Agent (the “RP Tender Agent”) with respect to the Restricted Payment Offer. Any questions or requests for assistance or copies of the Restricted Payment Offer Documents may be directed to the RP Tender Agent at (212) 269-5550 (collect) or (800) 341-6292 (toll free). Any beneficial owner owning interests in Notes may contact such beneficial owner’s broker, dealer, commercial bank, trust company or other nominee for assistance concerning the Restricted Payment Offer. Neither Goldman, Sachs & Co. nor any other investment bank has been engaged or will act as dealer manager (or any equivalent role or function) for the Restricted Payment Offer.

No recommendation is made by the company or the RP Tender Agent as to whether or not Holders should tender their Notes pursuant to the Restricted Payment Offer. Holders must make their own decision as to whether to tender any of their Notes in the Restricted Payment Offer and, if so, the principal amount of Notes to tender.

The Tender Offer

The Tender Offer will expire at the Expiration Date, and the date of repurchase is expected to be 26 March 2019 (the “TO Repurchase Date”).

Under the Tender Offer, the company is offering to repurchase from Holders their pro rata portion of up to US$150 million principal amount of Notes. As of the date hereof, the aggregate principal amount of Notes outstanding is US$475 million. As a result:

(1) an automatic pro ration factor of 31.5789% shall apply to the principal amount of Notes tendered in the Tender Offer (rounded down to avoid the purchase of Notes in a principal amount other than in integrals of $1,000) (the “TO Pro-Rated Tendered Notes”), and the company will accept the TO Pro-Rated Tendered Notes for payment of the Tender Offer Repurchase Price in cash; and

(2) the remaining balance of the principal amount of the Notes tendered that are not TO Pro-Rated Tendered Notes will not be accepted for payment by the Company and will be returned to the tendering Holder on or promptly after the TO Repurchase Date.

Upon the terms and subject to the conditions of the Tender Offer and subject to applicable law, the company will accept for payment all TO Pro-Rated Tendered Notes validly tendered (and not validly withdrawn) on or prior to the Expiration Date in the Tender Offer at the Tender Offer Repurchase Price.

For example, if the principal amount of Notes tendered is US$475 million the company will repurchase US$15 million of principal amount of TO Pro-Rated Tendered Notes in the Tender Offer. If the principal amount of Notes tendered is US$300 million the company will repurchase approximately US$95 million of principal amount of TO Pro-Rated Tendered Notes in the Tender Offer. The aggregate principal amount of TO Pro-Rated Tendered Notes will, by virtue of the fact that they are not being tendered into the Restricted Payment Offer, constitute Declined Amounts under the Indenture.

Notes that are tendered in the Tender Offer may be withdrawn at any time prior to the Expiration Date. The company reserves the right to terminate, withdraw or amend the Tender Offer at any time, subject to applicable law.

In no event will the company repurchase any amount of Notes from any Holder in excess of the TO Pro-Rated Tendered Notes tendered by such Holder. The automatic pro ration factor of 31.5789% shall apply to the principal amount of Notes tendered by each Holder regardless of the principal amount of Notes tendered by Holders in the aggregate in the Tender Offer. If the aggregate principal amount of Notes tendered in the Tender Offer is less than US$475 million then the company will repurchase less than US$150 million aggregate principal amount of Notes in the Tender Offer.

Holders should note that the Tender Offer Repurchase Price is higher than the Restricted Payment Repurchase Price. The procedures for tendering Notes in the Tender Offer and the Restricted Payment Offer are separate. Notes validly tendered in the Tender Offer (and not validly withdrawn) may not be tendered in the Restricted Payment Offer, and Notes validly tendered in the Restricted Payment Offer (and not validly withdrawn) may not be tendered in the Tender Offer. The Tender Offer is not conditioned upon the Restricted Payment Offer and the Restricted Payment Offer is not conditioned on the Tender Offer. The company reserves the right, in its sole discretion, to (a) terminate, postpone or extend the Tender Offer if the Restricted Payment Offer is terminated, abandoned, postponed, extended or amended for any reason and (b) terminate, postpone or amend the Tender Offer without terminating, postponing or amending the Restricted Payment Offer.

This announcement does not constitute an offer to buy or the solicitation of an offer to sell Notes in any circumstances in which such offer or solicitation is unlawful, and does not constitute an offer, solicitation or sale in any state or jurisdiction in which such offer, solicitation or sale is unlawful. The Tender Offer is being made only by means of the Offer to Purchase and related Letter of Transmittal (the “Tender Offer Documents”) which contain the complete terms and conditions of the Tender Offer. The Tender Offer is subject to the satisfaction or waiver of certain conditions, as set forth in the Tender Offer Documents. Holders should carefully read the Tender Offer Documents before any decision is made with respect to the Tender Offer.

D.F. King & Co., Inc. has been appointed as the Tender Agent and Information Agent (the “TO Tender Agent”) with respect to the Tender Offer. Any questions or requests for assistance or copies of the Tender Offer Documents may be directed to the TO Tender Agent at (212) 269-5550 (collect) or (800) 341-6292 (toll free). Any beneficial owner owning interests in Notes may contact such beneficial owner’s broker, dealer, commercial bank, trust company or other nominee for assistance concerning the Tender Offer. Goldman, Sachs & Co. will act as Dealer Manager for the Tender Offer. Questions regarding the Tender Offer may be directed to Goldman, Sachs & Co. at (212) 902-6941 (collect) or (800) 828-3182 (toll free).

No recommendation is made by the company, the TO Tender Agent or the Dealer Manager as to whether or not Holders should tender their Notes pursuant to the Tender Offer. Holders must make their own decision as to whether to tender any of their Notes in the Tender Offer and, if so, the principal amount of Notes to tender.

Read the article online at: https://www.worldcoal.com/coal/26022019/warrior-met-coal-announces-launch-of-concurrent-tender-offers-for-senior-secured-notes/