International Coal Group Announces Effective Date of Make-Whole Fundamental Change Relating to its 4.00% Convertible Senior Notes Due 2017
SCOTT DEPOT, W.Va., June 15, 2011 /PRNewswire/ -- International Coal Group, Inc.
(the 'Company') announced today the effective date of a Make-Whole Fundamental Change with respect to its 4.00% Convertible Senior Notes due 2017 (CUSIP: 45928H AG1) (the 'Securities').On June 14, 2011, pursuant to the Agreement and Plan of Merger, dated as of May 2, 2011, by and among Arch Coal, Inc. ('Arch'), Atlas Acquisition Corp. ('Purchaser') and the Company, the previously announced tender offer (the 'Offer') by Purchaser to acquire all of the Company's outstanding shares of common stock was consummated. Following the consummation of the Offer, Purchaser merged with and into the Company, with the Company surviving as a wholly owned subsidiary of Arch (the 'Merger'), with effect as of 12:01 a.m., Eastern time, on June 15, 2011.
Upon the consummation of the Merger, a Make-Whole Fundamental Change occurred and the conversion rate applicable to the Securities that are surrendered for conversion during the period (the 'Make-Whole Conversion Period') from, and including, June 15, 2011, the effective date of the Make-Whole Fundamental Change relating to the Merger, to, and including, the Fundamental Change Repurchase Date (as defined below), has been increased, pursuant to the indenture governing the Securities (as amended and supplemented, the 'Indenture'), by 7.0006 shares of the Company's common stock per $1,000 principal amount of Securities.
Accordingly, upon surrender of Securities for conversion following the Merger in connection with the Make-Whole Fundamental Change resulting from the Merger, the Company's conversion obligation during the Make-Whole Conversion Period will be calculated based solely on the $14.60 in cash per share of common stock received by the Company's stockholders in the Merger (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 179.0880 shares of common stock per $1,000 principal amount of Securities (which includes the Make-Whole Applicable Increase (as defined in the Indenture)), multiplied by the Merger Consideration.
Based on the above, holders of Securities surrendered for conversion during the Make-Whole Conversion Period will be entitled to receive, at settlement, $2,614.6848 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.
In addition, upon the Fundamental Change (as defined in the Indenture) resulting from the consummation of the Offer, 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), at a price, payable in cash, equal to 100% of the principal amount of the Securities (or portions thereof) to be so repurchased 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. The Fundamental Change Notice is required to be mailed by the Company no later than July 13, 2011.
Accordingly, the Fundamental Change Repurchase Date relating to the consummation of the Offer, which will be announced at a later date by the Company, may occur as early as July 5, 2011 and as late as August 17, 2011.
Holders should be aware that the Indenture governs the conversion procedure for Securities surrendered for conversion. In this regard, if a holder converts its Securities on or after June 15, 2011, the Securities will be convertible into the same type (and same proportions) of the Merger Consideration payable to the Company's stockholders in the Merger. The Company has executed with the trustee for the Securities a supplemental indenture providing for such change in the right to convert the Securities.
As a result, and in accordance with the Indenture, holders of Securities surrendered for conversion as and when permitted by the Indenture after the expiration of the Make-Whole Conversion Period will be entitled to receive, at settlement, $2,512.47604 in cash for each $1,000 principal amount of Securities surrendered for conversion.
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.
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.
International Coal Group, Inc.
CONTACT: Arch Coal Investor Relations, 1-314-994-2897; or International
Coal Group Investor Relations, Ross Mazza 1-304-760-2526,
rmazza@intlcoal.com