SCOTT DEPOT, W.Va.,
June 9, 2011 /PRNewswire/ -- International Coal Group, Inc.
(NYSE: ICO) (the "Company") announced today an anticipated
Fundamental Change and Make-Whole Fundamental Change with respect
to its 9.00% Convertible Senior Notes due 2012 (the
"Securities").
As previously announced, the Securities became convertible as of
April 1, 2011 because the closing
sale price of the Company's common stock, par value $0.01 per share (the "Common Stock"), on the New
York Stock Exchange exceeded the conversion trigger price of
$7.93 per share for each of 20 or
more trading days in the period of 30 consecutive trading days
ended March 31, 2011.
Accordingly, the Securities currently are convertible at a
conversion rate of 163.8136 shares of Common Stock per $1,000 principal amount of Securities.
In accordance with the indenture governing the Securities (as
supplemented or amended, the "Indenture"), the Securities will
remain convertible as a result of an anticipated Fundamental Change
and Make-Whole Fundamental Change relating to the transactions
described below. In addition, in connection with the
Make-Whole Fundamental Change that would occur upon the
consummation of the Merger (as defined below), the conversion rate
applicable to each Security that is surrendered for conversion at
any time during the Make-Whole Conversion Period described below
will be increased to reflect the Make-Whole Applicable
Increase.
As previously announced, on May 16,
2011, pursuant to the Agreement and Plan of Merger, dated as
of May 2, 2011 (the "Merger
Agreement"), by and among Arch Coal, Inc. ("Arch"), Atlas
Acquisition Corp. (the "Purchaser") and the Company, the Purchaser
commenced a tender offer (the "Offer") to acquire all of the
Company's outstanding shares of Common Stock at a price of
$14.60 per share in cash, net to the
seller, without interest and less any applicable withholding taxes
(the "Merger Consideration"). The Offer will expire at
8:00 a.m., New York City time, on Tuesday, June 14, 2011, unless the Offer is
extended or earlier terminated in accordance with the rules and
regulations of the Securities and Exchange Commission (the "SEC")
and the Merger Agreement. The consummation of the Offer would
constitute a Fundamental Change and a Make-Whole Fundamental
Change.
Upon the consummation of the Offer, the Purchaser is expected to
merge with and into the Company, with the Company surviving as a
wholly owned subsidiary of Arch (the "Merger"), which would
constitute a Make-Whole Fundamental Change. In addition, a
Fundamental Change is expected to occur in connection with the
consummation of the Merger because, following the consummation of
the Merger, the Company's Common Stock would no longer be listed
for trading on the New York Stock Exchange.
The anticipated effective date of the Merger is expected to
occur as soon as practicable after the consummation of the Offer.
Solely for the purpose of providing notice under the
Indenture, the Company currently anticipates that the date on which
the Make-Whole Fundamental Change relating to the Merger will
become effective is June 15,
2011.
Pursuant to the Indenture, holders may surrender Securities for
conversion at any time through the period ending on, and including,
the Fundamental Change Repurchase Date (as defined below), which
the Company will publicly announce in a notice (the "Fundamental
Change Notice") to be sent to each holder within 20 business days
after the actual consummation of the Offer.
Holders should be aware that the Indenture governs the
conversion procedure for Securities surrendered for conversion.
In this regard, if the Merger is consummated, if a holder
converts its Securities on or after the effective date of the
Merger, the Securities will be convertible into the same type (and
same proportions) of the Merger Consideration received by holders
of Common Stock in the Merger, and the Company will execute with
the Trustee a supplemental indenture providing for such change in
the right to convert the Securities.
In addition, notwithstanding anything in the Indenture to the
contrary, pursuant to the Indenture, the conversion rate applicable
to each Security that is surrendered for conversion in accordance
with the Indenture, at any time during the period (the "Make-Whole
Conversion Period") through, and including, the Fundamental Change
Repurchase Date shall be increased to an amount equal to the
conversion rate that would otherwise apply, plus an amount equal to
the Make-Whole Applicable increase described below.
If the Merger is consummated, a Make-Whole Fundamental Change
will occur and the conversion rate applicable to the Securities
that are surrendered for conversion during the Make-Whole
Conversion Period will be increased pursuant to the Indenture.
The increase in the conversion rate (the "Make-Whole
Applicable Increase") will be determined by reference to the amount
set forth in the table in the Indenture that corresponds to the
effective date and the applicable price of the Make-Whole
Fundamental Change. The applicable price with respect to the
Make-Whole Fundamental Change relating to the Merger would be equal
to the Merger Consideration of $14.60
per share of Common Stock in cash.
Accordingly, if the Merger is consummated on June 15, 2011,
then, in accordance with the Indenture, the Make-Whole Applicable
Increase applicable to Securities surrendered for conversion during
the Make-Whole Conversion Period would be equal to 0.0723 shares of
Common Stock per $1,000 principal
amount of Securities and, upon surrender of Securities for
conversion in connection with the Make-Whole Fundamental Change
resulting from the Merger pursuant to the Indenture, the Company's
conversion obligation shall be calculated based solely on the
Merger Consideration and shall be deemed to be an amount equal to,
per $1,000 principal amount of
converted Securities, the applicable conversion rate of 163.8859
shares of Common Stock per $1,000
principal amount of Securities (which includes the Make-Whole
Applicable Increase), multiplied by the Merger Consideration.
Based on the above, it is estimated that holders of Securities
surrendered for conversion during the Make-Whole Conversion Period
would be entitled to receive, at settlement, $2,392.73414 in cash for each $1,000 principal amount of Securities surrendered
for conversion.
In connection with the Merger, only holders who convert their
Securities during the Make-Whole Conversion Period shall be
entitled to receive the Make-Whole Applicable Increase.
Please refer to the Indenture for a more complete description of
the increase in the conversion rate applicable in connection with
the Make-Whole Fundamental Change relating to the Merger.
A holder may convert a portion of a Security, but only if that
portion is an integral multiple of $1,000 in principal amount.
The Trustee has informed the Company that, as of the date of
this notice, Cede & Co., as nominee for participants in The
Depository Trust Company ("DTC"), is the sole registered holder of
the Securities, all custodians and beneficial holders of the
Securities hold the Securities through DTC accounts and there are
no certificated Securities in non-global form. To convert a
beneficial interest in a Security that is a global note, the holder
must, in addition to complying with any other rules and procedures
of DTC:
(1) cause there to be completed and delivered an appropriate
instruction form for conversion, in accordance with the rules and
procedures of DTC;
(2) cause there to be delivered to the Conversion Agent, through
the facilities of DTC, in accordance with the rules and procedures
of DTC, the interest in the global note to be converted;
(3) pay the amount of interest, if any, the holder must pay in
accordance with the Indenture; and
(4) pay any tax or duty if required pursuant to the
Indenture.
If the Offer is consummated, then, in accordance with the
Indenture, the Company will mail, or cause to be mailed, to all
holders of Securities a Fundamental Change Notice within 20
business days after the occurrence of the Fundamental Change
resulting from the consummation of the Offer. This
Fundamental Change Notice will set forth the information required
by the Indenture, including but not limited to, the date of the
Fundamental Change, the Fundamental Change Repurchase Date and the
Fundamental Change Repurchase Price, as described below.
Upon the Fundamental Change that would result upon consummation
of the Merger, each holder of Securities would have the right, at
such holder's option, to require the Company to repurchase all of
such holder's Securities (or portions thereof that are integral
multiples of $1,000 in principal
amount), on a date selected by the Company (the "Fundamental Change
Repurchase Date"), which shall be no later than 35 days, nor
earlier than 20 days, after the date the Fundamental Change Notice
is mailed in accordance with the Indenture.
Upon the satisfaction of the requirements of the Indenture, the
holder's repurchase option would require the Company to repurchase
all of such holder's Securities at a price, payable in cash, equal
to 100% of the principal amount of the Securities (or portions
thereof) to be so repurchased, plus accrued and unpaid interest, if
any (the "Fundamental Change Repurchase Price") to, but excluding,
the Fundamental Change Repurchase Date; provided,
however, that if the Fundamental Change Repurchase Date is
after a record date for the payment of an installment of interest
and on or before the related interest payment date, then the
accrued and unpaid interest, if any, to, but excluding, such
interest payment date will be paid on such interest payment date to
the holder of record of such Securities at the close of business on
such record date, and the holder surrendering such Securities for
repurchase will not be entitled to any such accrued and unpaid
interest unless such holder was also the holder of record of such
Securities at the close of business on such record date.
A holder will be entitled to withdraw its election in the
Purchase Notice prior to the close of business on the business day
immediately preceding the Fundamental Change Repurchase Date.
In addition, as described above, Securities will remain
convertible to, and including the Fundamental Change Repurchase
Date, but the Securities with respect to which a Purchase Notice is
given by a holder may be converted pursuant to the Indenture only
if such Purchase Notice has been withdrawn in accordance with the
Indenture.
Please refer to the Fundamental Change Notice, when available,
for a more complete description of the Fundamental Change
Repurchase Right, including, without limitation, any differences in
consideration payable to holders in connection with a repurchase
upon Fundamental Change as compared to a conversion of the
Securities.
The Bank of New York Mellon Trust Company, N.A., the Trustee
under the Indenture, is acting as Conversion Agent. Its
contact information follows:
2 North La Salle Street
Chicago, Illinois 60602
Facsimile: (312) 827-8542
Attention: Corporate Trust Administration
Please refer to the Indenture for a more complete description of
the convertibility of the Securities, the consideration due upon
conversion and when such consideration must be paid by the
Company.
General Information
The Company is a leading producer of coal in Northern and
Central Appalachia and the Illinois Basin. The Company has 13 active
mining complexes, of which 12 are located in Northern and Central
Appalachia and one in Central
Illinois. The Company's mining operations and reserves are
strategically located to serve utility, metallurgical and
industrial customers domestically and internationally.
Important Additional Information
This announcement is for informational purposes only and is
neither an offer to purchase nor a solicitation of an offer to sell
securities. Arch has filed with the SEC a tender offer statement on
Schedule TO on May 16, 2011, as
amended through the date of this release. The Company filed a
tender offer solicitation/recommendation statement on Schedule
14D-9 with the SEC on May 16, 2011,
as amended through the date of this release. The tender offer
statement (including an offer to purchase, a related letter of
transmittal and other tender offer documents) and the
solicitation/recommendation statement contain important information
that should be read carefully before making any decision to tender
securities in the Offer. Company stockholders may obtain a free
copy of these materials (and all other tender offer documents filed
with the SEC) on the SEC's website: www.sec.gov. The Schedule TO
(including the offer to purchase and related materials) and the
Schedule 14D-9 (including the solicitation/recommendation
statement) may also be obtained for free by contacting Innisfree
M&A. Stockholders may call toll free (877) 717-3922. Banks and
brokers may call collect (212) 750-5833.
Statements in this press release that are not historical
facts are forward-looking statements and may involve a number of
risks and uncertainties. We have used the words "anticipate,"
"believe," "could," "estimate," "expect," "intend," "may," "plan,"
"predict," "project" and similar terms and phrases, including
references to assumptions, to identify forward-looking statements.
These forward-looking statements are made based on expectations and
beliefs concerning future events affecting us and are subject to
various risks, uncertainties and factors relating to our operations
and business environment, all of which are difficult to predict and
many of which are beyond our control, that could cause our actual
results to differ materially from those matters expressed in or
implied by these forward-looking statements.
SOURCE International Coal Group, Inc.
