BEACHWOOD, Ohio, June 30 /PRNewswire-FirstCall/ -- Aleris International, Inc. announced today that it is offering to purchase for cash any and all of its outstanding 10-3/8% Senior Secured Notes Due 2010 (CUSIP No. 449681AC9) and 9% Senior Notes Due 2014 (CUSIP No. 014477AA1) (collectively, the "Notes"), on the terms and subject to the conditions set forth in the Offer to Purchase and Consent Solicitation Statement dated June 30, 2006 and the accompanying Consent and Letter of Transmittal (together, the "Offer Documents"). Aleris is also soliciting consents from holders of the Notes to, among other things, eliminate or make less restrictive substantially all of the restrictive covenants and the events of default and amend certain related provisions in the indentures (the "Indentures") under which the Notes were issued. The tender offer and consent solicitation is being conducted in connection with, and is contingent on the consummation of, the previously announced acquisition (the "Acquisition") of the downstream aluminum business of Corus Group plc.
The consent solicitation will expire at 5:00 p.m. New York City time, on July 14, 2006, unless earlier terminated or extended (such date and time, as the same may be extended, the "Consent Date"). The tender offer will expire at midnight, New York City time, on July 28, 2006, unless terminated or extended (such date and time, as the same may be extended, the "Expiration Date").
The total consideration for each $1,000 principal amount of Notes validly tendered and accepted for purchase, subject to the terms and conditions of the tender offer and consent solicitation, on or prior to the Consent Date will be $1,100.78 for the 10-3/8% Notes and $1,134.96 for the 9% Notes. The total consideration includes a consent payment equal to $20 per $1,000 for the 10-3/8% Notes and the 9% Notes (the "Consent Payment"). The tender offer consideration for each $1,000 principal amount of Notes validly tendered and accepted for purchase, subject to the terms and conditions of the tender offer and consent solicitation, tendered after the Consent Date but on or prior to the Expiration Date (and not validly withdrawn) pursuant to the Offer shall be $1,080.78 for the 10-3/8% Notes and $1,114.96 for the 9% Notes. The total consideration and the tender offer consideration to be paid for each $1,000 in principal amount of Notes will be paid in cash. In either case, all holders who validly tender their Notes will receive accrued but unpaid interest up to, but not including, the date of settlement.
In connection with the tender offer, Aleris is also seeking consents to certain proposed amendments with respect to the Notes. The purpose of the proposed amendments is to, among other things, eliminate or make less restrictive substantially all of the restrictive covenants and the events of default and to amend certain related provisions under the Indentures. Holders who desire to tender their Notes must consent to the proposed amendments. A holder may not deliver consents without tendering the related Notes. The tender offer is subject to the satisfaction of certain conditions, including receipt of consents sufficient to approve the proposed amendments to the Indentures, obtaining the requisite funding and the Acquisition having occurred or occurring substantially concurrent with the Expiration Date.
The proposed amendments to the Indentures for which consents are being solicited will be set forth in two supplemental indentures and are described in more detail in the Offer Documents. The supplemental indentures will not be executed unless and until Aleris has received consents from holders of a majority in principal amount of the applicable Notes outstanding, and the amendments will not become operative unless and until Aleris has accepted for purchase at least a majority in principal amount of the applicable Notes pursuant to the Offer Documents.
Deutsche Bank Securities Inc. is acting as dealer manager for the tender offer and as the solicitation agent for the consent solicitation and can be contacted at (212) 250-6008 (collect). Mackenzie Partners, Inc. is the depositary and information agent and can be contacted at (212) 929-5500 (collect) or (800) 322-2885 (toll-free). Copies of the Offer Documents and other related documents may be obtained from the information agent.
THE TENDER OFFER AND CONSENT SOLICITATION ARE BEING MADE SOLELY ON THE TERMS AND CONDITIONS SET FORTH IN THE OFFER DOCUMENTS. UNDER NO CIRCUMSTANCES SHALL THIS PRESS RELEASE CONSTITUTE AN OFFER TO BUY OR THE SOLICITATION OF AN OFFER TO SELL THE NOTES OR ANY OTHER SECURITIES OF ALERIS. THE TENDER OFFER AND CONSENT SOLICITATION ARE BEING MADE SOLELY BY ALERIS'S OFFER DOCUMENTS. THIS PRESS RELEASE ALSO IS NOT A SOLICITATION OF CONSENTS TO THE PROPOSED AMENDMENTS TO THE INDENTURES. NO RECOMMENDATION IS MADE AS TO WHETHER HOLDERS OF THE NOTES SHOULD TENDER THEIR NOTES OR GIVE THEIR CONSENT.
Aleris International, Inc. is a major North American manufacturer of rolled aluminum products and is a global leader in aluminum recycling and the production of specification alloys. Aleris is also a recycler of zinc and a leading U.S. manufacturer of zinc metal and value-added zinc products that include zinc oxide and zinc dust. Headquartered in Beachwood, Ohio, a suburb of Cleveland, the Company operates 41 production facilities in the U.S., Brazil, Germany, Netherlands, Mexico and Wales, and employs approximately 4,000 employees. For more information about the Company, please visit our Web site at http://www.aleris.com/.
SAFE HARBOR REGARDING FORWARD-LOOKING STATEMENTS
Forward-looking statements made in this news release are made pursuant to the safe harbor provision of the Private Securities Litigation Reform Act of 1995. These include statements that contain words such as "believe," "expect," "anticipate," "intend," "estimate," "should" and similar expressions intended to connote future events and circumstances, and include statements regarding future actual and adjusted earnings and earnings per share; future improvements in margins, processing volumes and pricing; overall 2006 operating performance; anticipated higher adjusted effective tax rates; expected cost savings; success in integrating Aleris's recent acquisitions; its future growth; an anticipated favorable economic environment in 2006; future benefits from acquisitions and new products; expected benefits from industry consolidation and post-hurricane reconstruction; and anticipated synergies resulting from the merger with Commonwealth and other acquisitions. Investors are cautioned that all forward-looking statements involve risks and uncertainties, and that actual results could differ materially from those described in the forward-looking statements. These risks and uncertainties would include, without limitation, Aleris's levels of indebtedness and debt service obligations; its ability to effectively integrate the business and operations of its acquisition; further slowdowns in automotive production in the U.S. and Europe, the financial condition of Aleris's customers and future bankruptcies and defaults by major customers; the availability at favorable cost of aluminum scrap and other metal supplies that the Company processes; the ability of the Company to enter into effective metals, natural gas and other commodity derivatives; continued increases in natural gas and other fuel costs of the Company; a weakening in industrial demand resulting from a decline in U.S. or world economic conditions caused by terrorist activities or other unanticipated events; future utilized capacity of the Company's various facilities; a continuation of building and construction customers and distribution customers reducing their inventory levels and reducing the volume of the Company's shipments; restrictions on and future levels and timing of capital expenditures; retention of the Company's major customers; the timing and amounts of collections; currency exchange fluctuations; future write-downs or impairment charges which may be required because of the occurrence of some of the uncertainties listed above; and other risks listed in the Company's filings with the Securities and Exchange Commission, including but not limited to the Company's annual report on Form 10-K for the fiscal year ended December 31, 2005, and quarterly report on Form 10-Q for the quarter ended March 31, 2006, particularly the sections entitled "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" contained therein and in the section entitled "Risk Factors" contained in the Company's Current Report on Form 8-K filed with the Securities and Exchange Commission today.
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