RNS Number : 2714C
Melrose PLC
29 August 2008
THIS NOTICE IS IMPORTANT AND REQUIRES THE IMMEDIATE ATTENTION OF BONDHOLDERS. IF BONDHOLDERS ARE IN ANY DOUBT AS TO THE ACTION THEY
SHOULD TAKE, THEY SHOULD SEEK THEIR OWN FINANCIAL ADVICE, INCLUDING AS TO ANY TAX CONSEQUENCES, IMMEDIATELY FROM THEIR STOCKBROKER, BANK
MANAGER, SOLICITOR, ACCOUNTANT OR OTHER INDEPENDENT FINANCIAL OR LEGAL ADVISER.
FKI plc
(incorporated in England and Wales with limited liability, registered number 164945)
(the Company)
NOTICE OF MEETING
of the holders of the outstanding
EUR600,000,000 6.625 per cent. Guaranteed Bonds due 2010
(the Bonds)
of the Company
unconditionally and irrevocably guaranteed by
FKI Engineering Limited
(formerly FKI Engineering PLC)
and FKI Industries Inc.
(the Guarantors)
NOTICE IS HEREBY GIVEN that a meeting (the Meeting) of holders of the Bonds (the Bondholders) convened by the Company will be held at
the offices of Allen & Overy LLP at One Bishops Square, London E1 6AD at 11:00 a.m., London time, on 22 September 2008 for the purpose of
considering and, if thought fit, passing the following resolution which will be proposed as an Extraordinary Resolution in accordance with
the provisions of the trust deed dated 22 February 2000 (the Trust Deed) made between the Company, the Guarantors and The Law Debenture
Trust Corporation p.l.c. (the Trustee), as trustee for the Bondholders, and constituting the Bonds. Capitalised terms used but not defined
in this Notice have the meanings given to them in the Trust Deed or the terms and conditions of the Bonds (the Conditions).
EXTRAORDINARY RESOLUTION
"THAT this meeting of the holders of the outstanding EUR600,000,000 6.625 per cent. Guaranteed Bonds due 2010 of FKI plc unconditionally
and irrevocably guaranteed by FKI Engineering Limited (formerly FKI Engineering PLC) and FKI Industries Inc. (the Bonds, the Company and the
Guarantors respectively) constituted by the trust deed dated 22 February 2000 (the Trust Deed) made between the Company, the Guarantors and
The Law Debenture Trust Corporation p.l.c. (the Trustee) as trustee for the holders of the Bonds (the Bondholders), hereby:
1. assents to the modification of the terms and conditions of the Bonds as set out in Part II of the Second Schedule to the Trust
Deed (the Conditions) to provide for the Company to have the option to redeem all, but not some only, of the Bonds outstanding at any time
at the Early Redemption Amount plus Accrued Interest on giving not less than three and not more than 20 Business Days notice through a
Regulated Information Service and by the delivery of such notice to the Clearing Systems for communication to Direct Participants (which
notice shall be deemed to be given on the day on which it is provided to the Regulated Information Service and delivered to the Clearing
Systems) (each capitalised term having the meaning given in the Supplemental Trust Deed (as defined in paragraph 3 below)), all as set out
in the Supplemental Trust Deed;
2. sanctions every abrogation, modification or compromise of, or arrangement in respect of, the rights of the Bondholders
appertaining to the Bonds against the Company and/or the Guarantors, whether or not such rights arise under the Trust Deed, involved in or
resulting from or to be effected by, the modifications referred to in paragraph 1 of this Extraordinary Resolution and their
implementation;
3. authorises, directs, requests and empowers the Trustee to:
(a) concur in the modifications referred to in paragraph 1 of this Extraordinary Resolution and, in order to give effect to and
implement such modifications, on or shortly after the passing of this Extraordinary Resolution and the satisfaction of the condition in
paragraph 5 below, to execute a supplemental trust deed (the Supplemental Trust Deed) in the form of the draft produced to this meeting and
signed by the chairman of the meeting for the purpose of identification, with such amendments (if any) as may be requested by the Company
and/or the Guarantors and approved by the Trustee, in its sole discretion, or required by the Trustee; and
(b) concur in, and execute and do all such other deeds, instruments, acts and things as may be necessary, desirable or expedient, in
the sole discretion of the Trustee, to carry out and give effect to this Extraordinary Resolution and the implementation of the
modifications referred to in paragraph 1 of this Extraordinary Resolution;
4. discharges and exonerates the Trustee from all liability for which it may have become or may become responsible under the Trust
Deed or the Bonds in respect of any act or omission in connection with this Extraordinary Resolution or its implementation;
5. declares this Extraordinary Resolution shall be in all respects conditional on the acceptance for repurchase by the Company of the
Bonds validly tendered in the Offer; and
6. acknowledges that the term Offer, as used in this Extraordinary Resolution, shall mean the invitation by the Company to
Bondholders (subject to the offer restrictions set out in the Tender Offer Memorandum referred to below) to tender Bonds for repurchase by
the Company or, failing the Company, the Guarantors for cash, as further described in the Tender Offer Memorandum dated 29 August 2008 and
as the same may be amended in accordance with its terms.".
Background
The Company has convened the Meeting for the purpose of enabling Bondholders to consider and resolve, if they think fit, to pass the
Extraordinary Resolution proposed in relation to the Bonds.
Bondholders are further given notice that the Company has (i) invited Bondholders (subject to offer restrictions, as referred to below
and more fully described in the Tender Offer Memorandum published by the Company and the Guarantors on 29 August 2008 (the Tender Offer
Memorandum)) to tender Bonds for repurchase by the Company for cash (the Offer) and (ii) invited Bondholders to approve the modification of
the Conditions (as described in paragraph 1 of the Extraordinary Resolution above) to provide for the Company to have the option to redeem
all, but not some only, of the Bonds remaining (if any) on completion of the Offer (the Proposal), each as further described in the Tender
Offer Memorandum.
The Offer is subject to offer restrictions in, among other countries, the United States of America, Italy, Belgium and France, all as
more fully described in the Tender Offer Memorandum.
The Offer is not being made, and neither the Tender Offer Memorandum nor any other documents or materials relating to the Offer are for
distribution or to be made available, (i) in or into the United States or to persons located or resident in the United States or (ii) in or
into Italy or to persons located or resident in Italy.
With effect from Tuesday 1 July 2008, the Company became a wholly owned subsidiary of Melrose PLC (Melrose) as a result of a
court-sanctioned scheme of arrangement.
Melrose has sufficient unutilised credit facilities available to enable it to fully redeem the Bonds on the terms set out in the Tender
Offer Memorandum. These facilities are made available by way of a �750 million syndicated term and revolving credit facility maturing in
April 2013, representing a considerably longer-dated maturity than the Bonds (which mature in February 2010). Therefore, replacing the Bonds
with a drawdown under the Melrose facilities will improve the overall debt maturity profile of Melrose and its consolidated subsidiaries
(together the Melrose Group).
The interest cost on utilising the replacement Melrose facilities will also be slightly lower than the 6.625 per cent. coupon on the
Bonds. In turn this will reduce the Melrose Group's interest cost in the forthcoming years.
The Bonds also have supporting guarantees that are different to the guarantees supporting the Melrose credit facilities. Eliminating the
Bonds will avoid the potential for Bondholders to become structurally subordinated as a result of the Bonds having fewer supporting
guarantees than the Melrose facilities.
A statement as required by Listing Rule 17.3.11(b) of the market values for the Bonds on the first dealing day in each of the six months
before the date of this Notice and on the latest practicable date before the sending of this Notice has not been included in this Notice as
the last market value for the Bonds on a dealing day as published by the Stock Exchange Daily Official List was for 22 February 2006. No
market values for the Bonds are available on the Stock Exchange Daily Official List for any dealing day since this date, as there have been
no further bids for or offers of the Bonds on the London Stock Exchange plc's regulated market and trades in the Bonds have only taken place
since this date on an off-market basis.
The Trustee has not been involved in the formulation of the Extraordinary Resolution and the Trustee expresses no opinion on the merits
of the Extraordinary Resolution or on whether Bondholders would be acting in their best interests in approving the Extraordinary Resolution,
and nothing in this Notice should be construed as a recommendation to Bondholders from the Trustee to vote in favour of, or against, the
Extraordinary Resolution. Bondholders should take their own independent financial and legal advice on the merits and on the consequences of
voting in favour of, or against, the Extraordinary Resolution, including as to any tax consequences. On the basis of the information set
out in this Notice, the Trustee has authorised it to be stated that the Trustee has no objection to the Extraordinary Resolution being put
to Bondholders for their consideration.
General
Subject to the offer and distribution restrictions set out in the Tender Offer Memorandum, Bondholders may obtain, from the date of this
Notice, a copy of the Tender Offer Memorandum from the Tender Agent and the Dealer Managers, the contact details for which are set out
below. A Bondholder will be required to produce evidence satisfactory to the Tender Agent or the Dealer Managers as to his or her status as
a Bondholder and that he or she is a person to whom the Offer is being made (pursuant to the offer and distribution restrictions referred to
above) or to whom it is lawful to send the Tender Offer Memorandum and to make an invitation pursuant to the Offer and/or the Proposal under
applicable laws before being sent a copy of the Tender Offer Memorandum. Copies of (i) the Trust Deed, this Notice and the Tender Offer
Memorandum; and (ii) the current draft of the Supplemental Trust Deed as referred to in paragraph 3 of the Extraordinary Resolution, are
also available for inspection by Bondholders (a) on and from the date of this Notice up to and including the date of the Meeting, at the specified offices of the Tender Agent and the Principal
Paying Agent during normal business hours on any weekday (Saturdays, Sundays and public holidays excepted) up to and including the date of
the Meeting and (b) at the Meeting and at the offices of Allen & Overy LLP, One Bishops Square, London E1 6AD for 15 minutes before the
Meeting. Any revised version of the draft Supplemental Trust Deed made available as described above and marked to indicate changes to the
draft made available on the date of this Notice will supersede the previous draft of the Supplemental Trust Deed and Bondholders will be
deemed to have notice of any such changes.
The attention of Bondholders is particularly drawn to the procedures for voting, quorum and other requirements for the passing of the
Extraordinary Resolution at the Meeting or any meeting held following any adjournment of the Meeting, which are set out in paragraph 2 of
"Voting and Quorum" below. Having regard to such requirements, Bondholders are strongly urged either to attend the Meeting or to take steps
to be represented at the Meeting (including by way of submitting Tender Instructions or Ineligible Bondholder Instructions in favour of the
Proposal (all such terms as defined in the Tender Offer Memorandum)) as soon as possible.
Voting and Quorum
Bondholders who have submitted and not revoked (in the limited circumstances in which revocation is permitted) a valid Tender
Instruction or Ineligible Bondholder Instruction in favour of the Proposal, by which they will have given instructions for the appointment
of one or more representatives of the Tender Agent by the Principal Paying Agent as their proxy to vote in favour of the Extraordinary
Resolution to be proposed at the Meeting and any meeting held following any adjournment of the Meeting, need take no further action to be
represented at the Meeting or any such adjourned meeting.
Bondholders who have not submitted or have submitted and subsequently revoked a Tender Instruction or Ineligible Bondholder Instruction
in favour of the Proposal should take note of the provisions set out below detailing how such Bondholders can attend or take steps to be
represented at the Meeting (references to which, for the purpose of such provisions, include, unless the context otherwise requires, any
meeting held following any adjournment of the Meeting).
The provisions governing the convening and holding of a meeting of the Bondholders are set out in the Fourth Schedule to the Trust Deed,
a copy of which is available for inspection by the Bondholders as referred to above.
Each person (a beneficial owner) who is the owner of a particular principal amount of the Bonds through Euroclear, Clearstream,
Luxembourg or a person who is shown in the records of Euroclear or Clearstream, Luxembourg as a holder of the Bonds (a Direct Participant),
should note that a beneficial owner will only be entitled to attend and vote at the Meeting in accordance with the procedures set out below
and where a beneficial owner is not a Direct Participant it will need to make the necessary arrangements either directly or with the other
intermediary through which it holds its Bonds for the Direct Participants to complete these procedures on its behalf.
A Bondholder who wishes to attend and vote at the Meeting and any adjourned such Meeting in person must produce at the Meeting a valid
voting certificate or certificates issued by a Paying Agent.
A Bondholder may obtain a voting certificate in respect of its Bonds from a Paying Agent by arranging for its Bonds to be blocked in an
account with Euroclear or Clearstream, Luxembourg (unless the Bond is the subject of a block voting instruction which has been issued and is
outstanding in respect of the Meeting or any adjourned such Meeting) not less than 48 hours (as defined in the Trust Deed) before the time
fixed for the Meeting (or, if applicable, any adjourned such Meeting) and, within the relevant time limit specified by Euroclear or
Clearstream, Luxembourg, as the case may be, upon terms that the Bonds will not cease to be so blocked until the first to occur of the
conclusion of the Meeting or any adjourned such Meeting and the surrender of the voting certificate to the Paying Agent and notification by
the Paying Agent to the relevant Clearing System of such surrender or the compliance in such other manner with the rules of the relevant
Clearing System.
A Bondholder not wishing to attend and vote at the Meeting in person may either deliver the voting certificate(s) to the person whom it
wishes to attend on its behalf or give a voting instruction (in the form of an electronic voting instruction (an Electronic Voting
Instruction) in accordance with the standard procedures of Euroclear and/or Clearstream, Luxembourg) to, and require a Paying Agent to,
include the votes attributable to its Bonds in a block voting instruction issued by the Paying Agent for the Meeting or any adjourned such
Meeting, in which case the Paying Agent shall appoint a proxy to attend and vote at the Meeting in accordance with such Bondholder's
instructions.
If a Bondholder wishes the votes attributable to its Bonds to be included in a block voting instruction for the Meeting or any adjourned
such Meeting, then (i) the Bondholder must arrange for its Bonds to be blocked in an account with Euroclear or Clearstream, Luxembourg for
that purpose and (ii) the Bondholder or a duly authorised person on its behalf must direct a Paying Agent as to how those votes are to be
cast by way of an Electronic Voting Instruction, not less than 48 hours before the time fixed for the Meeting (or, if applicable, any
adjourned such Meeting) and within the time limit specified by the relevant Clearing System upon terms that the Bonds will not cease to be
so blocked until the first to occur of (i) the conclusion of the Meeting or any adjourned such Meeting and (ii) not less than 48 hours
before the time for which the Meeting is convened, the notification in writing of any revocation of a Bondholder's previous instructions to
the Paying Agent and the same then being notified in writing by the Paying Agent to the Issuer at least 24 hours (as defined in the Trust Deed) before the time appointed for holding the Meeting and
such Bonds ceasing in accordance with the procedures of the relevant Clearing System and with the agreement of the Paying Agent to be held
to its order or under its control, and that such instruction is, during the period commencing 48 hours prior to the time for which the
Meeting or any adjourned such Meeting is convened and within the time limit specified by the relevant Clearing System and ending at the
conclusion or adjournment thereof, neither revocable nor capable of amendment.
Any Electronic Voting Instructions given may not be revoked during the period starting 48 hours before the time fixed for the Meeting
and within the time limit specified by the relevant Clearing System and ending at the close of such Meeting.
The quorum required for the Meeting is one or more persons present holding voting certificates or being proxies or representatives and
holding or representing in the aggregate not less than two-thirds of the principal amount of the Bonds for the time being outstanding. In
the event such quorum is not obtained at the Meeting, the Meeting will be adjourned for not less than 13 clear days nor more than 42 clear
days. At any adjourned Meeting any one or more persons present holding voting certificates or being proxies or representatives and holding
or representing in the aggregate not less than one-third in principal amount of the Bonds for the time being outstanding will form a
quorum.
Voting certificates obtained and Electronic Voting Instructions given in respect of the Meeting, including pursuant to a Tender
Instruction or an Ineligible Bondholder Instruction in favour of the Proposal, (unless revoked in accordance with the terms of the Trust
Deed and, in the case of Electronic Voting Instructions, in accordance with the procedures of the relevant Clearing System) shall remain
valid for such adjourned Meeting.
Every question submitted to the Meeting shall be decided in the first instance by a show of hands unless a poll is (before or on the
declaration of the result of the show of hands) demanded by the chairman of the Meeting, the Issuer, either Guarantor, the Trustee or any
person present holding a voting certificate or being a proxy or representative (whatever the principal amount of the Bonds so held by that
person). On a show of hands every person who is present in person and produces a voting certificate or is a proxy or representative shall
have one vote. On a poll every person who is so present shall have one vote in respect of each EUR1.00 or such other amount as the Trustee
may in its absolute discretion stipulate in principal amount of Bonds represented by the voting certificate so produced or in respect of
which he or she is a proxy or representative.
To be passed at the Meeting, the Extraordinary Resolution requires a majority of consisting of not less than three-fourths of the
persons voting thereat upon a show of hands or if a poll is duly demanded by a majority consisting of not less than three-fourths of the
votes cast on such poll. If passed, the Extraordinary Resolution shall be binding on all Bondholders, whether present or not at the Meeting
at which it is passed and whether or not voting.
This Notice is given by FKI plc.
Bondholders should contact the following for further information:
The Dealer Managers
Barclays Bank PLC at 5 The North Colonnade, Canary Wharf, London E14 4BB, Tel: +44 207 773 8575 or by email to eu.lm@barcap.com.
HSBC Bank plc at 8 Canada Square, London E14 5HQ, Tel: +44 20 7991 5874 or by email to liability.management@hsbcib.com.
The Royal Bank of Scotland plc at 135 Bishopsgate, London EC2M 3UR, Tel: +44 20 7085 8056 or by email to liabilitymanagement@rbs.com.
The Tender Agent
The Bank of New York Mellon at One Canada Square, London E14 5AL, Tel: +44 20 7964 4958 or by email to eventsadmin@bankofny.com.
The Principal Paying Agent
HSBC Bank plc at 8 Canada Square, London E14 5HQ.
Dated: 29 August 2008.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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