Axtel Announces Amendments and Supplements to Offers to Exchange Dated December 26, 2012 Business Wire SAN PEDRO GARZA GARCIA, Mexico -- January 14, 2013 Axtel, S.A.B. de C.V. (BMV: AXTELCPO; OTC: AXTLY) (“AXTEL” or “the Company”), a Mexican fixed-line integrated telecommunications company, today announced that has amended and supplemented the pending exchange offers being made by its wholly owned subsidiary Axtel Capital, S.A. de C.V. SOFOM E.N.R. (“Axtel Capital”) to exchange (the “Exchange Offers”) any and all of AXTEL’s outstanding 7.625% Senior Notes due 2017 (the “2017 Notes”) and 9.00% Senior Notes due 2019 (the “2019 Notes”, and together with the 2017 Notes, the “Old Notes”) for a combination of Senior Secured Notes due 2020 (the “Senior Secured Notes”), Peso-denominated Senior Secured Convertible Dollar-indexed Notes due 2020 (the “Convertible Dollar-indexed Notes” and, together with the Senior Secured Notes, the “New Notes”) of AXTEL and cash. The Company indicated that, among other things, it is improving the economic value of the offer and extending the Early Tender Date by one week. The improved offer is based on discussions with various bondholders, and parties who manage the two largest bond holdings are now supporting and participating in the exchange offer. Regarding the amendments to the Exchange Offers, the most significant are the following: 1. Extension of Early Tender Date; Subsequent Withdrawal. The Early Tender Date is changed to January 18, 2013, at 5:00 pm New York City time, unless further extended by Axtel Capital. If the Expiration Date is extended beyond February 11, 2013, Eligible Holders shall thereafter have the right to withdraw Old Notes. 2. Changes to Consideration. The consideration offered in exchange for Old Notes tendered is as set forth in the table below: Consideration per $1,000 Principal Amount of Old Notes Tendered On or Prior to Early Tender Date After Early Tender Date Outstanding Pesos- Pesos- Old Notes Principal Senior denominated Senior denominated to be CUSIP/ISIN Amount Secured Convertible Cash Consent Total Secured Convertible Cash Exchange Exchanged Numbers (in Notes Dollar- Payment Consideration Notes Dollar- Consideration millions) indexed indexed Notes(1) Notes (1) 7.625% 05462GAA2 Senior P06064AA0/ $275.0 $500.00 $44.61 $50.0 $116.0 $710.61 $500.00 $44.61 $50.0 $594.61 Notes due US05462GAA22 2017 USP06064AA01 9.00% 05462GAC8 Senior P06064AB8/ $490.0 $500.00 $44.61 $50.0 $116.0 $710.61 $500.00 $44.61 $50.0 $594.61 Notes due US05462GAC8 2019 USP06064AB83 This number is an approximation representing approximately Ps. 570 principal amount of Pesos-denominated Convertible Dollar-indexed Notes (1) converted into U.S. dollars at the commercial exchange rate of Ps. 12.7777 per U.S. dollar reported by Banco de Mexico on December 20, 2012. The Exchange Offers are being made only to eligible holders, as described below, pursuant to the Offer to Exchange and Consent Solicitation Statement dated December 26, 2012, as supplemented by the First Supplement to Offer to Exchange and Consent Solicitation Statement dated January 14, 2013 (together, the “Offer to Exchange”) and related Consent and Letter of Transmittal which set forth more fully the terms and conditions of the Exchange Offers and consent solicitations. Eligible holders of Old Notes who tender their Old Notes and deliver their consents after the Early Tender Date will receive the consideration set forth in the table above. 3. Changes to the Interest Rate of the New Notes. Interest on the New Notes will accrue at the initial rate of 7.00% per annum. The interest rate shall increase to 8.00% per annum on the first anniversary of the Issue Date and shall increase to 9.00% per annum on the second anniversary of the Issue Date. 4. Changes to the Optional Redemption provisions of the Senior Secured Notes. On and after January 31, 2016, we will be entitled at our option to redeem all or a portion of the Senior Secured Notes upon not less than 30 nor more than 60 days’ notice, at the redemption prices (expressed in percentages of principal amount on the redemption date), plus accrued interest to the redemption date (subject to the right of Holders of record on the relevant record date to receive interest due on the relevant interest payment date), if redeemed during the 12-month period commencing on January 31 of the years set forth below: Period Redemption Price 2016 106.75% 2017 104.50% 2018 102.25% 2019 and thereafter 100.00% Prior to January 31, 2016, we may at our option on one or more occasions, with the Net Cash Proceeds from one or more Equity Offerings, redeem Senior Secured Notes in an aggregate principal amount not to exceed 35% of the aggregate principal amount of the Senior Secured Notes originally issued at the redemption prices (expressed in percentages of principal amount on the redemption date), plus accrued and unpaid interest to the redemption date, if redeemed during the 12-month period ending on January 31 of the years set forth below: Period Redemption Price 2014 107% 2015 108% 2016 109% provided, however, that (1) at least 65% of such aggregate principal amount of Senior Secured Notes remains outstanding immediately after the occurrence of each such redemption (other than Senior Secured Notes held, directly or indirectly, by the Company or its Affiliates); and (2) each such redemption occurs within 90 days after the date of the related Equity Offering. 5. Changes to the Optional Redemption provisions of the Convertible Dollar-indexed Notes. Axtel will not be entitled to redeem the Convertible Dollar-indexed Notes at its option prior to January 31, 2016. On and after January 31, 2016, Axtel will be entitled at its option to redeem some or all of the Convertible Dollar-indexed Notes at a redemption price equal to 200% of the principal amount of the Convertible Dollar-indexed Notes, plus accrued and unpaid interest to the redemption date (subject to the right of holders of record on the relevant record date to receive interest due on the relevant interest payment date) and including Additional Amounts payable in respect of such payment. In addition, on and after January 31, 2016, in the event that the market price of Axtel’s CPOs exceeds 200% of the December 21, 2012 conversion price of Ps. 2.41 in at least 20 of the past 30 trading days, Axtel will be entitled to redeem the Convertible Dollar-indexed Notes at a redemption price equal to (a) 100% of their principal amount, plus (b) accrued and unpaid interest to the redemption date (subject to the right of holders of record on the relevant record date to receive interest due on the relevant interest payment date) and including Additional Amounts payable in respect of such payment. 6. Changes to the Covenants applicable to the Convertible Dollar-indexed Notes. So long as the Senior Secured Notes are outstanding, the indenture governing the Convertible Dollar-indexed Notes will not include restrictive covenants. If the Convertible Dollar-indexed Notes remain outstanding at any time that the Senior Secured Notes are not outstanding and the Senior Secured Notes Indenture is not in effect, the Company will enter into a supplemental indenture to include in the Convertible Dollar-indexed Notes Indenture such restrictive covenants as are in the Senior Secured Notes Indenture. The consummation of the Exchange Offers and related consent solicitations are subject to the conditions set forth in the Offer to Exchange, including, among other things, the receipt by the Company of consents of the holders representing at least a majority in aggregate principal amount of each of the 2017 Notes and the 2019 Notes, the concurrent consummation of the sale-and-leaseback transaction with MATC Digital, S. de R.L. de C.V., a subsidiary of American Tower Corporation which has been previously disclosed by Axtel, and on other terms and conditions. The complete terms and conditions of the Exchange Offers and consent solicitations are de-scribed in the Offer to Exchange, copies of which may be obtained by eligible holders by contacting D.F. King & Co., Inc., the information agent for the exchange offers and consent solicitations, at 48 Wall Street, 22nd Floor, New York, New York 10005, (212) 269-5550 (collect) or (800) 967-4612 (toll free), or email@example.com. The New Notes have not been registered under the Securities Act, or any state securities laws, and may not be offered or sold in the United States absent registration or an applicable exemption from registration requirements, and will therefore be subject to substantial restrictions on transfer. The Exchange Offers are being made, and the New Notes are being offered and issued, only to registered holders of Old Notes (i) in the United States who are (a) “qualified institutional buyers,” as that term is defined in Rule 144A under the Securities Act of 1933, as amended (the “Securities Act”) or (b) “accredited investors,” as that term is defined in Rule 501(a) under the Securities Act, that are institutions of the types described in clauses (1), (2), (3) and (7) of Rule 501(a) and (ii) outside the United States and are persons who are not “U.S. persons,” as that term is defined in Rule 902 under the Securities Act. This announcement is for informational purposes only and does not constitute an offer to sell or a solicitation of an offer to buy the New Notes nor an offer to purchase Old Notes nor a solicitation of Consents. The Exchange Offers and Consent Solicitations are being made solely by means of the Offer to Exchange and the related Consent and Letter of Transmittal. About AXTEL AXTEL is a Mexican telecommunications company with significant growth in the broadband segment, and one of the leading companies in information and communication technologies solutions in the corporate, financial and government sectors. The Company serves all market segments - corporate, financial, government, wholesale and residential with the most robust offering of integrated communications services in Mexico. Its world-class network consists of different access technologies like fiber optic, fixed wireless access, point to point and point to multipoint links, in order to offer solutions tailored to the needs of its customers. AXTEL's shares, represented by Ordinary Participation Certificates or CPOs, trade on the Mexican Stock Exchange under the symbol 'AXTELCPO' since 2005. Forward-Looking Statements This release contains certain forward-looking statements regarding the future events or the future financial performance of AXTEL that are made pursuant to the safe harbor for forward-looking statements provided by the Private Securities Litigation Reform Act of 1995. These statements reflect management's current views with respect to future events or financial performance, and are based on management's current assumptions and information currently available and are not guarantees of the Company's future performance. The timing of certain events and actual results could differ materially from those projected or contemplated by the forward-looking statements due to a number of factors including, but not limited to those inherent to operating in a highly regulated industry, strong competition, commercial and financial execution, economic conditions, among others. Contact: Axtel, S.A.B. de C.V. Investor Relations Adrian de los Santos, +52(81) 8114-1128 IR@axtel.com.mx
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Axtel Announces Amendments and Supplements to Offers to Exchange Dated December 26, 2012
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