Item 1.01 - Entry into a Material Definitive Agreement
Support Agreements
On February 27, 2020, A.M. Castle & Co. (the "Company") announced that it
entered into support agreements (the "Support Agreements") with holders who, in
the aggregate, hold in excess of 96% of the Company's outstanding 5.00%/7.00%
Convertible Senior PIK Toggle Notes due 2022 (the "Old Notes") who have agreed,
among other things, to tender their Old notes in the Exchange Offer (as defined
below) and to consent to the Proposed Amendments (as defined below), subject to
certain conditions. The foregoing description of the Support Agreements does not
purport to be complete and is qualified in its entirety by reference to the form
of Support Agreement, which is attached hereto as Exhibit 10.1 and is
incorporated herein by reference.
Item 2.02 - Results of Operations and Financial Condition
In accordance with General Instruction B.2 to Form 8-K, the following
information shall not be deemed "filed" for purposes of Section 18 of the
Securities Exchange Act of 1934, as amended, nor shall it be deemed incorporated
by reference in any filing under the Securities Act of 1933, as amended, except
as shall be expressly set forth by specific reference in such a filing.
The information regarding the results of operations and financial condition of
the Company for the fourth quarter and year ended December 31, 2019, responsive
to this Item 2.02, and contained in Exhibit 99.1 filed herewith, is incorporated
by reference herein.
Item 8.01 - Other Events
Exchange Offer
On February 27, 2020, the Company filed a Registration Statement on Form S-4
(the "S-4 Registration Statement") and Schedule TO with respect to a registered
exchange offer (the "Exchange Offer") pursuant to which the Company will issue
its 3.00%/5.00% Convertible Senior PIK Toggle Notes due 2024 (the "New Notes")
and shares of its common stock in exchange for any and all Old Notes tendered.
The New Notes will be guaranteed on a senior basis by all current and future
domestic subsidiaries (other than those designated as "Unrestricted
Subsidiaries") of the Issuer (the "Guarantors"). The restrictive covenants in
the indenture governing the New Notes will be substantially similar to the
covenants in the indenture governing the Old Notes. All Old Notes that are
tendered and accepted as part of the Exchange Offer will be exchanged into New
Notes and the Company's common stock at the rate of $491.8619 principal amount
of New Notes and 363.2585 shares of the Company's common stock per $1,000
principal amount of Old Notes tendered on the date on which the Exchange Offer
is completed. Any accrued and unpaid interest on the Old Notes through the
Closing Date of the Exchange Offer will be exchanged into New Notes and common
stock at the exchange rate.
The New Notes will bear interest at a rate of 3.00% per annum if paid in cash or
5.00% if paid in kind per annum, payable quarterly. The New Notes will mature on
August 31, 2024 issuance and will be convertible, at the option of the holders,
into shares of the Company's common stock.
Concurrently with the Exchange Offer, the Company is soliciting consents from
holders of the Old Notes for certain amendments (the "Proposed Amendments") to
the indenture governing the Old Notes to eliminate or amend substantially all of
the restrictive covenants, release all collateral securing the Company's
obligations under the indenture governing the Old Notes, and modify certain of
the events of default and various other provisions, contained in such indenture.
2
--------------------------------------------------------------------------------
Increase Number of Shares and Reverse Stock-Split
If the Exchange Offer is completed, the Company has agreed to call a special
meeting of stockholders (or consider such matters at its upcoming annual meeting
of stockholders) to be held as soon as reasonably practicable for stockholders
of record as of a date occurring on or after the closing date of the Exchange
Offer (which will include holders of old notes who receive shares of common
stock in the Exchange Offer) to consider the following matters: (1) a proposal
to amend the Company's articles of amendment and restatement to increase the
number of shares of our common stock authorized for issuance, in order to
provide a sufficient number of authorized shares of common stock for the
issuance of shares upon conversion of the new notes, (2) a proposal to amend the
Company's articles of amendment and restatement to effect a reverse stock split
of shares of the Company's common stock; and (3) any other matters properly
brought before the meeting.
IMPORTANT INFORMATION ABOUT THE EXCHANGE OFFER
The press release attached to this Form 8-K and the contents of this Form 8-K
are for informational purposes only and are not an offer to buy or the
solicitation of an offer to sell any security. An Exchange Offer will only be
made by means of a prospectus, a letter of transmittal and other offer
documents, as described below.
The exchange offer is subject to the conditions described in the registration
statement on Form S-4 filed by the Company in connection with the exchange offer
and is scheduled to expire at 5:00 p.m., Eastern Time, on March 26, 2020, unless
terminated earlier or extended. Holders of Existing Notes who participate in the
exchange offer will receive the following for each $1,000 of Old Notes: (i)
$491.8619 principal amount of 3.00%/5.00% Convertible Senior PIK Toggle Notes
due 2024 and (ii) 363.2585 shares of common stock. Accrued and unpaid interest
on the Existing Notes will be exchanged into new notes and common stock at the
exchange rate on the date on which the exchange offer is completed.
In connection with the exchange offer, a registration statement on Form S-4, a
tender offer statement on Schedule TO, and related documents relating to the
exchange offer are being filed by the Company with the SEC. The new notes and
common stock may not be exchanged or sold nor may offers to exchange or buy be
accepted prior to the time the registration statement becomes effective. Neither
the press release attached to this Form 8-K nor this Form 8-K shall not
constitute an offer to exchange or sell, or the solicitation of an offer to
exchange or buy, nor shall there be any exchange or sale of such securities in
any state in which such offer, exchange, solicitation or sale would be unlawful
prior to registration or qualification under the securities laws of any such
state. Holders of the Existing Notes are strongly advised to read the
registration statement, tender offer statement and other related documents
because these documents contain important information. Such holders may obtain
copies of the exchange offer materials from Wilmington Savings Fund Society,
FSB, Attention: Corporate Trust Middle Office, 501 Car Road, Suite 100,
Wilmington, DE 19809, by facsimile (eligible institutions only): 302-421-9137,
for information or confirmation by telephone: 302-571-7014. These documents can
also be obtained at no charge from the Company or at the SEC's website,
www.sec.gov. The Company is not making any recommendation to holders of
outstanding Existing Notes as to whether they should tender them pursuant to the
exchange offer.
Item 9.01 - Financial Statements and Exhibits
(d) The following exhibits are filed herewith:
Exhibit Number Description
10.1 Form of Support Agreement between A.M. Castle & Co. and the signatories
thereto.
99.1 Press Release, February 27, 2020
3
--------------------------------------------------------------------------------
Cautionary Note Regarding Forward Looking Statements
The information contained in the press release attached to this Form 8-K and the
contents of this Form 8-K should be read in conjunction with our filings made
with the Securities and Exchange Commission. This Form 8-K contains
"forward-looking statements" within the meaning of the federal securities laws.
These forward-looking statements are intended to qualify for the safe harbor
from liability established by the Private Securities Litigation Reform Act of
1995. Forward-looking statements are those that do not relate solely to
historical fact. Such forward-looking statements only speak as of the date of
this release and the Company assumes no obligation to update the information
included in this report. Such forward-looking statements include information
concerning our possible or assumed future results of operations, including
descriptions of our business strategy, the benefits that we expect to achieve
from our working capital management initiative, and the timing and anticipated
benefits of the exchange offer. These statements often include words such as
"believe," "expect," "anticipate," "intend," "predict," "plan," "should," or
similar expressions. These statements are not guarantees of performance or
results, and they involve risks, uncertainties, and assumptions. Although we
believe that these forward-looking statements are based on reasonable
assumptions, there are many factors that could affect our actual financial
results or results of operations and could cause actual results to differ
materially from those in the forward-looking statements. These factors include
our ability to effectively manage our operational initiatives and implemented
restructuring activities, the impact of volatility of metals prices, the impact
of imposed tariffs and/or duties, the cyclical and seasonal aspects of our
business, our ability to effectively manage inventory levels, the impact of our
substantial level of indebtedness, and our ability to successfully complete the
exchange offer and realize the anticipated benefits of the transaction, as well
as those risk factors identified in our Annual Report on Form 10-K for the
fiscal year ended December 31, 2019. All future written and oral forward-looking
statements by us or persons acting on our behalf are expressly qualified in
their entirety by the cautionary statements contained or referred to above.
Except as required by the federal securities laws, we do not have any
obligations or intention to release publicly any revisions to any
forward-looking statements to reflect events or circumstances in the future, to
reflect the occurrence of unanticipated events or for any other reason.
4
--------------------------------------------------------------------------------
© Edgar Online, source Glimpses