GRUPO KALTEX ANNOUNCES CASH TENDER OFFER AND CONSENT SOLICITATION

NACAULPAN DE JUAREZ, Mexico, Jan. 26, 2022 /PRNewswire/ -- Grupo Kaltex, S.A. de C.V. ("Grupo Kaltex" or the "Company") announced today that it has commenced a cash tender offer (the "Tender Offer") for any and all of the outstanding U.S.$220,000,000 aggregate principal amount of its 8.875% Senior Notes due 2022 (the "Notes").

In conjunction with the Tender Offer, Grupo Kaltex is also soliciting consents (the "Consent Solicitation") from the holders of the Notes for the adoption of proposed amendments (the "Proposed Amendments") to the indenture governing the Notes (the "Indenture") as described below.

The Tender Offer and the Consent Solicitation are being made pursuant to an Offer to Purchase and Consent Solicitation Statement, dated January 26, 2022 (as amended or supplemented from time to time, the "Offer to Purchase").

Certain information regarding the Notes and the terms of the Tender Offer and the Consent Solicitation is summarized in the table below.

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(1)  Per U.S.$1,000 principal amount of Notes validly tendered (and not withdrawn)

(2)  Inclusive of Early Tender Payment (as defined below)

The deadline for holders to validly tender Notes and deliver consents and be eligible to receive payment of the Total Consideration (as defined below), which includes the Early Tender Payment, will be 5:00 p.m. (New York City time), on February 8, 2022, unless extended or earlier terminated by the Company (such date and time, as the same may be modified, the "Early Tender Payment Deadline").  The Tender Offer will expire at 11:59 p.m. (New York City time), on February 23, 2022, unless extended or earlier terminated by the Company (such date and time, as the same may be modified, the "Expiration Time").  Notes tendered may be withdrawn and consents for the Proposed Amendments delivered may be revoked at any time prior to 5:00 p.m. (New York City time) on February 8, 2022 (the "Withdrawal Deadline"), but not thereafter, unless required by applicable law.

The total consideration payable to holders for each U.S.$1,000 principal amount of Notes validly tendered and purchased pursuant to the Tender Offer will be U.S.$1,000.00 (the "Total Consideration").  The Total Consideration includes an early tender payment of U.S.$30.00 per U.S.$1,000 principal amount of Notes (the "Early Tender Payment") payable only to holders who validly tender (and do not withdraw) their Notes at or prior to the Early Tender Payment Deadline.  Holders who validly tender (and do not withdraw) their Notes after the Early Tender Payment Deadline but at or prior to the Expiration Time will be eligible to receive U.S.$970.00 per U.S.$1,000 principal amount of Notes (the "Tender Offer Consideration"), which amount will be equal to the Total Consideration less the Early Tender Payment.  In addition, the Company will pay accrued and unpaid interest on the principal amount of Notes accepted for purchase from the most recent interest payment date on the Notes to, but not including, the applicable settlement date for the Notes accepted for purchase ("Accrued Interest"). Additionally, the company will pay additional amounts deemed interest in respect of interest payments (including gains derived from the sale of the Notes in the Tender Offer that are treated as interest and the applicable Accrued Interest), if any (the "Additional Interest") so that the amount received by Holders after withholding tax will be equal to the amount that would have been due had there been no withholding tax.

Following the Early Tender Payment Deadline, the Company may, but is not required to, accept for purchase the Notes validly tendered (and not validly withdrawn) at or prior to the Early Tender Payment Deadline, provided that all conditions, including the financing condition (as described below) have been satisfied or waived by the Company. Assuming such acceptance, payment in cash of an amount equal to the Total Consideration, plus Accrued Interest, and Additional Interest thereon, for such accepted Notes will be made within three business days after the Early Tender Payment Deadline (the "Early Settlement Date"), which is currently expected to be February 11, 2022, or as promptly as practicable thereafter. Assuming acceptance by the Company of Notes tendered pursuant to the Tender Offer, on the Final Settlement Date (as defined below), the Company will settle any Notes validly tendered (and not validly withdrawn) at or prior to the Expiration Time and accepted for purchase not previously settled on the Early Settlement Date.  Payment in cash of an amount equal to the Tender Offer Consideration, plus Accrued Interest, and Additional Interest thereon, for such accepted Notes will be within two business days following the Expiration Time (the "Final Settlement Date"), which is currently expected to be February 25, 2022, or as promptly as practicable thereafter.

The Proposed Amendments would, among other things, (i) eliminate substantially all of the restrictive covenants, as well as various events of default and related provisions contained in the Indenture and (ii) release the collateral securing the Notes under the Indenture as described in the Offer to Purchase.

Holders who tender Notes must also consent to the Proposed Amendments to the Indenture.  Holders of Notes may not deliver consents to the Proposed Amendments without validly tendering the Notes in the Tender Offer and may not revoke their consents without withdrawing the previously tendered Notes to which they relate.  Adoption of the Proposed Amendments described in clause (i) of the preceding paragraph requires the delivery of consents by holders of Notes of a majority of the aggregate outstanding principal amount of Notes (not including any Notes which are owned by the Company or any of its affiliates) (the "Requisite Majority Consent"), and adoption of the Proposed Amendments described in clause (ii) of the preceding paragraph requires the delivery of consents by holders of Notes of at least 75% of the aggregate outstanding principal amount of the Notes (not including any Notes which are owned by the Company or any of its affiliates) (the "Requisite 75% Consent").  If the Company receives the Requisite Majority Consent, the Company, the note guarantors and the trustee under the Indenture will promptly execute a supplemental indenture (the "Supplemental Indenture") containing the corresponding Proposed Amendments to the Indenture, as described in more detail in the Offer to Purchase.  If the Company receives the Requisite 75% Consent, the Company, the note guarantors, the trustee and the collateral agent under the Indenture will promptly execute such documentation as may be necessary to release the collateral securing the Notes under the Indenture, as described in more detail in the Offer to Purchase.

The Company's obligation to accept for purchase, and to pay for, Notes validly tendered and not validly withdrawn pursuant to the Tender Offer is conditioned upon the satisfaction or, when applicable, waiver of certain conditions, which are more fully described in the Offer to Purchase, including, among others, (i) the receipt by the Company of the Requisite Majority Consent, (ii) the execution of the Supplemental Indenture, and (iii) the consummation of an offering by the Company (the "New Notes Offering") of new senior secured notes (the "New Notes") and/or the execution by the Company of a Mexican peso denominated secured loan facility (the "Concurrent Loan Facility" and together with the New Notes Offering, the "Concurrent Financing Transactions") at or prior to the earlier of the Early Settlement Date or the Final Settlement Date on terms satisfactory to the Company. The New Notes Offering will be exempt from the registration requirements of the U.S. Securities Act of 1933, as amended (the "Securities Act"), and therefore will only be offered and sold to "qualified institutional buyers" (QIBs) in accordance with Rule 144A under the Securities Act and outside the United States to non-U.S. persons in reliance on Regulation S under the Securities Act.  The New Notes Offering is not conditioned on the successful consummation of the Tender Offer.

The Company intends to use the net proceeds from the Concurrent Financing Transactions to pay the consideration payable pursuant to the Tender Offer and the Consent Solicitation and the related fees and expenses.  To the extent the net proceeds from the Concurrent Financing Transactions are not sufficient, Grupo Kaltex may use available cash on hand and/or borrowings under available lines of credit. Following payment for the Notes accepted pursuant to the terms of the Tender Offer, the Company does not currently plan to use the net proceeds from the Concurrent Financing Transactions to redeem any of the Notes that remain outstanding; however, the Company may, in its sole discretion, at any time or from time to time following the settlement of the Tender Offer and Consent Solicitation, purchase any Notes that are not tendered and accepted in the Tender Offer through open market purchases or otherwise.

In no event will the information contained in the Offer to Purchase or this press release regarding the New Notes Offering constitute an offer to sell or a solicitation of an offer to buy any New Notes.

Subject to applicable law, the Company reserves the right, in its sole discretion, to (i) extend, terminate or withdraw the Tender Offer and the Consent Solicitation at any time or (ii) otherwise amend the Tender Offer and/or the Consent Solicitation in any respect at any time and from time to time.  The Company further reserves the right, in its sole discretion, not to accept any tenders of Notes with respect to the Notes.

Morgan Stanley & Co. LLC is acting as dealer manager for the Tender Offer and as solicitation agent for the Consent Solicitation and can be contacted at the telephone numbers set forth on the back cover page of Offer to Purchase with questions regarding the Tender Offer and the Consent Solicitation.

Copies of the Offer to Purchase are available to holders of Notes from D.F. King & Co., Inc., the information agent and the tender agent for the Tender Offer and the Consent Solicitation.  To contact the information agent and tender agent, banks and brokers may call (212) 269-5550, and others may call U.S. toll-free: (800) 848-3405 or email [email protected]. Additional contact information is set forth below.

Neither the Offer to Purchase nor any related documents have been filed with the U.S. Securities and Exchange Commission, nor have any such documents been filed with or reviewed by any federal or state securities commission or regulatory authority of any country.  No authority has passed upon the accuracy or adequacy of the Offer to Purchase or any related documents, and it is unlawful and may be a criminal offense to make any representation to the contrary.

The Tender Offer and the Consent Solicitation are being made solely on the terms and conditions set forth in the Offer to Purchase.  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 the Company or any of its subsidiaries.  The Tender Offer and the Consent Solicitation are not being made to, nor will the Company accept tenders of Notes or deliveries of consents from, holders in any jurisdiction in which the Tender Offer and the Consent Solicitation or the acceptance thereof would not be in compliance with the securities of blue sky laws of such jurisdiction.  This press release also is not a solicitation of consents to the Proposed Amendments to the Indenture.  No recommendation is made as to whether holders should tender their Notes or deliver their consents with respect to the Notes.  Holders should carefully read the Offer to Purchase because it contains important information, including the terms and conditions of the Tender Offer and the Consent Solicitation.

About Grupo Kaltex

Grupo Kaltex is a sociedad anónima de capital variable, a variable capital corporation organized under the laws of Mexico.  Grupo Kaltex is engaged in the design, manufacturing and commercialization of yarn, fabric, apparel and home products and is one of the largest textile companies in Mexico and in the Americas and among the largest textiles in the world, measured by volume. The Company's corporate offices are located at Avenida Ingenieros Militares No. 2, Colonia Industrial Naucalpan, Naucalpan de Juárez, Estado de México C.P. 53370, México. 

Important Notice Regarding Forward-Looking Statements

This press release contains statements that constitute estimates and forward-looking statements.  These statements appear in a number of places in this press release and include statements regarding the Company's intent, belief or current expectations, and those of the Company's officers, with respect to (among other things) the Company's financial condition.

The Company's estimates and forward-looking statements are based mainly on current expectations and estimates of future events and trends, which affect, or may affect, the Company's business and results of operations.  Although the Company believes that these estimates and forward-looking statements are based upon reasonable assumptions, they are subject to several risks and uncertainties and are based on information currently available to the Company.

The words "believe," "may," "may have," "would," "estimate," "continues," "anticipates," "intends," "hopes," and similar words are intended to identify estimates and forward-looking statements. Estimates and forward-looking statements refer only to the date when they were made, and neither Grupo Kaltex, the dealer manager and solicitation agent, the information agent and tender agent or any affiliate of any of them undertakes any obligation to update or review any estimate or forward-looking statement due to new information, future events or any other factors.  Estimates and forward-looking statements involve risks and uncertainties and do not guarantee future performance, as actual results or developments may be substantially different from the expectations described in the forward-looking statements.  In light of the risks and uncertainties described above, the events referred to in the estimates and forward-looking statements included in this press release may or may not occur, and the Company's business performance and results of operation may differ materially from those expressed in its estimates and forward-looking statements, due to factors that include but are not limited to those mentioned above.  The Company cautions you not to place undue reliance on any estimates or forward-looking statements, which speak only as of the date made.

DISCLAIMER

This press release must be read in conjunction with the Offer to Purchase.  This announcement and the Offer to Purchase contain important information which must be read carefully before any decision is made with respect to the Tender Offer and the Consent Solicitation.  If any holder of Notes is in any doubt as to the action it should take, it is recommended to seek its own legal, tax, accounting and financial advice, including as to any tax consequences, immediately from its stockbroker, bank manager, attorney, accountant or other independent financial or legal adviser.  Any individual or company whose Notes are held on its behalf by a broker, dealer, bank, custodian, trust company or other nominee or intermediary must contact such entity if it wishes to participate in the Tender Offer and the Consent Solicitation.  None of Grupo Kaltex, the dealer manager and solicitation agent, the information agent and tender agent and any person who controls, or is a director, officer, employee or agent of such persons, or any affiliate of such persons, makes any recommendation as to whether holders of Notes should participate in the Tender Offer and Consent Solicitation.

SOURCE Grupo Kaltex, S.A. de C.V.

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