Attached files
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8-K - CURRENT REPORT - MERITOR, INC. | meritor_8k.htm |
EX-4.1 - INDENTURE, DATED AS OF DECEMBER 4, 2012 - MERITOR, INC. | exhibit4-1.htm |
Exhibit 99.1
CONTACTS: | |
Robert Herta | |
(248) 435-1185 | |
robert.herta@meritor.com | |
Christy Daehnert | |
(248) 435-9426 | |
christy.daehnert@meritor.com |
Meritor Completes Offering of New
Convertible Senior Notes and
Repurchase of a Portion of Existing Convertible
Senior Notes
due 2026
TROY, Mich., (Dec. 4, 2012) Meritor, Inc. (NYSE: MTOR) today announced the closing of its offering of $250 million aggregate principal amount at maturity of its 7.875% convertible senior notes due 2026 (the 7.875% notes), which includes $25 million aggregate principal amount at maturity of 7.875% notes issued pursuant to the initial purchasers exercise in full of their option to purchase additional 7.875% notes. The offering was made to qualified institutional buyers in a private placement. The 7.875% notes have an initial principal amount of $900 per note and will accrete to $1,000 per note on December 1, 2020. The 7.875% notes also bear interest at a rate of 7.875% per year on the principal amount at maturity of the 7.875% notes, rank equally in right of payment to all of Meritors existing and future senior unsecured indebtedness and mature on March 1, 2026.
The company used the net proceeds of approximately $218.1 million from the offering of the 7.875% notes (after discounts and estimated offering expenses) and additional cash to acquire a portion of its outstanding 4.625% convertible senior notes due 2026 (the 4.625% notes) in transactions that settled concurrently with the closing of the 7.875% note offering. Approximately $245 million of $300 million principal amount of the 4.625% notes were acquired for an aggregate purchase price of approximately $235.7 million (including accrued interest). On or after March 1, 2016, the company may redeem the remaining 4.625% notes at its option, in whole or in part, at a redemption price in cash equal to 100% of the accreted principal amount of the 4.625% notes to be redeemed, plus accrued and unpaid interest to, but excluding, the redemption date. Further, holders may require the company to purchase all or a portion of their 4.625% notes at a purchase price in cash equal to 100% of the accreted principal amount of the 4.625% notes to be purchased, plus accrued and unpaid interest, on specified dates beginning on March 1, 2016 or upon certain fundamental changes.
The 7.875% notes are convertible in certain circumstances into cash up to the principal amount at maturity of the note surrendered for conversion. For the remainder of Meritors conversion obligation, if any, in excess of the principal amount at maturity, the 7.875% notes will be convertible into cash, shares of Meritor common stock or a combination of cash and common stock, at Meritors election, subject to certain limitations. The initial conversion rate, subject to adjustment, is equivalent to 83.3333 shares of common stock per $1,000 principal amount at maturity of the 7.875% notes. This represents an initial conversion price of approximately $12.00 per share. On or after December 1, 2020, the company may redeem the 7.875% notes at its option, in whole or in part, at a redemption price in cash equal to 100% of the principal amount at maturity of the 7.875% notes to be redeemed, plus accrued and unpaid interest to, but excluding, the redemption date. Further, holders may require the company to purchase all or a portion of their 7.875% notes at a purchase price in cash equal to 100% of the principal amount at maturity of the 7.875% notes to be purchased, plus accrued and unpaid interest, on December 1, 2020 or upon certain fundamental changes.
The 7.875% notes have not been registered under the Securities Act of 1933, as amended, or applicable state securities laws, and unless so registered, may not be offered or sold in the United States except pursuant to an exemption from the registration requirements of the Securities Act and applicable state securities laws.
This press release shall not constitute an offer to sell or the solicitation of an offer to buy these securities, nor shall there be any offer or sale of these securities in any state in which such offer, solicitation or sale would be unlawful.
About Meritor
Meritor, Inc. is
a leading global supplier of drivetrain, mobility, braking and aftermarket
solutions for commercial vehicle and industrial markets. With more than a
100-year legacy of providing innovative products that offer superior
performance, efficiency and reliability, the company serves commercial truck,
trailer, off-highway, defense, specialty and aftermarket customers in more than
70 countries. Meritor is based in Troy, Mich., United States, and is made up of
approximately 10,000 diverse employees who apply their knowledge and skills in
manufacturing facilities, engineering centers, joint ventures, distribution
centers and global offices in 19 countries. Meritor common stock is traded on
the New York Stock Exchange under the ticker symbol MTOR.
Forward-Looking
Statements
This press release contains
statements relating to our future results (including certain projections and
business trends) that are forward-looking statements as defined in the Private
Securities Litigation Reform Act of 1995. Forward-looking statements are
typically identified by words or phrases such as believe, expect,
anticipate, estimate, should, are likely to be, will and similar
expressions. Actual results may differ materially from those projected as a
result of certain risks and uncertainties, including but not limited to reduced
production for certain military programs and our ability to secure new military
programs as our primary military programs wind down by design in future years;
reliance on major original equipment manufacturer (OEM) customers and possible
negative outcomes from contract negotiations with our major customers, including
failure to negotiate acceptable terms in contract renewal negotiations; our
ability to successfully manage rapidly changing volumes in the commercial truck
markets and work with our customers to adjust their demands in view of rapid
changes in production levels; global economic and market cycles and conditions,
including a slower than anticipated recovery from the recent global economic
crisis; availability and sharply rising costs of raw materials, including steel,
and our ability to manage or recover such costs; our ability to manage possible
adverse effects on our European operations, or financing arrangements related
thereto, in the event one or more countries exit the European monetary union;
risks inherent in operating abroad (including foreign currency exchange rates,
implications of foreign regulations relating to pensions and potential
disruption of production and supply due to terrorist attacks or acts of
aggression); rising costs of pension and other
postretirement benefits; the ability to achieve the expected benefits of
restructuring actions; the demand for commercial and specialty vehicles for
which we supply products; whether our liquidity will be affected by declining
vehicle productions in the future; OEM program delays; demand for and market
acceptance of new and existing products; successful development of new products;
labor relations of our company, our suppliers and customers, including potential
disruptions in supply of parts to our facilities or demand for our products due
to work stoppages; the financial condition of our suppliers and customers,
including potential bankruptcies; possible adverse effects of any future
suspension of normal trade credit terms by our suppliers; potential difficulties
competing with companies that have avoided their existing contracts in
bankruptcy and reorganization proceedings; potential impairment of long-lived
assets, including goodwill; potential adjustment of the value of deferred tax
assets; competitive product and pricing pressures; the amount of our debt; our
ability to continue to comply with covenants in our financing agreements; our
ability to access capital markets; credit ratings of our debt; the outcome of
existing and any future legal proceedings, including any litigation with respect
to environmental or asbestos-related matters; the outcome of actual and
potential product liability, warranty and recall claims; and possible changes in
accounting rules; as well as other substantial costs, risks and uncertainties,
including but not limited to those detailed herein and in our filings with the
SEC. These forward-looking statements are made only as of the respective dates
on which they were made, and we undertake no obligation to update or revise the
forward-looking statements, whether as a result of new information, future
events or otherwise, except as otherwise required by law.
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