HOUSTON , Aug. 11, 2022 /PRNewswire/ -- CITGO Holding, Inc., a Delaware corporation (the " Company"), today announced its offer to purchase (the " Offer") for cash an aggregate principal amount of up to $286.231 million (the " Excess Cash Flow Offer Amount") of its 9.25% Senior Secured Notes due 2024 (the " Notes") at a purchase price equal to 100% of the principal amount of the Notes to be repurchased, plus accrued and unpaid interest to, but excluding, the settlement date, on the terms and subject to the conditions set forth in the Offer to Purchase, dated August 11, 2022 (the " Offer to Purchase").
The Offer will expire at 5:00 p.m., New York City time, on September 9, 2022, unless extended or earlier terminated by the Company (the " Expiration Time"). Subject to the Excess Cash Flow Offer Amount of $286.231 million, for each $1,000 principal amount of Notes validly tendered (and not validly withdrawn) prior to the Expiration Time and accepted by the Company, holders of Notes will receive $1,000 in cash (the " Offer Price"), plus accrued and unpaid interest to, but excluding, the settlement date. Tendered Notes may be validly withdrawn at any time prior to the Expiration Time, unless extended or earlier terminated by the Company. The settlement date is currently expected to be the fifth business day following the Expiration Time.
If the aggregate principal amount of the Notes tendered in the Offer exceeds the Excess Cash Flow Offer Amount of $286.231 million, the Company will purchase Notes having an aggregate principal amount equal to the Excess Cash Flow Offer Amount on a pro rata basis (subject to the applicable procedures of The Depository Trust Company), with adjustments as may be deemed appropriate by the Trustee (as defined below).
The Notes are governed by an indenture, dated as of August 1, 2019 (as amended to the date hereof, the " Indenture"), by and among the Company, the Guarantors party thereto and TMI Trust Company, as trustee (the " Trustee"). Under the terms of the Indenture, the Company is obligated to offer to purchase for cash an aggregate principal amount of up to the Excess Cash Flow Offer Amount of its outstanding Notes at the Offer Price. The Offer is being made to satisfy this requirement.
The Excess Cash Flow Offer Amount is equal to 50% of the Excess Cash Flow (as defined in the Indenture) of the Company and certain of its subsidiaries for the Excess Cash Flow Period (as defined in the Indenture), minus the mandatory prepayment offer amount under the excess cash flow offer provisions of the Term Loan Facility (as defined in the Indenture). In this regard, the Company has commenced a concurrent offer of prepayment equal to approximately $482.673 million in aggregate principal amount of outstanding indebtedness under the Term Loan Facility. The Offer and the concurrent offer under the Term Loan Facility are not conditioned on one another.
None of the Company, its board of directors (or any committee thereof), TMI Trust Company, the depositary for the Offer, or the Trustee or their respective affiliates is making any recommendation as to whether or not holders should tender all or any portion of their Notes in the Offer.
This announcement is not an offer to purchase or sell, or a solicitation of an offer to purchase or sell any securities. The Offer is being made solely by the Offer to Purchase. The Offer is not being made to holders of Notes in any jurisdiction in which the making or acceptance thereof would not be in compliance with the securities, blue sky or other laws of such jurisdiction.
CITGO Holding, Inc. (" CITGO Holding" or the " Company") is the direct parent of CITGO Petroleum Corporation (" CITGO"). CITGO Holding is a wholly-owned subsidiary of PDV Holding, Inc. (" PDV Holding"), a Delaware corporation and an indirect wholly-owned subsidiary of Petróleos de Venezuela, S.A. (" PDVSA" or " ultimate parent"), which is a Venezuelan corporation 100% owned and controlled by the Government of Venezuela.
CITGO manufactures or refines and markets transportation fuels as well as petrochemicals, other industrial products and lubricants. We own and operate three large-scale, highly complex petroleum refineries with a total rated crude oil refining capacity of approximately 769,000 barrels per day, located in Lake Charles, Louisiana, Corpus Christi, Texas and Lemont, Illinois. Our refining operations are supported by an extensive distribution network, which provides reliable access to our refined product end-markets. We own 35 active refined product terminals with a total storage capacity of 18.3 million barrels and have equity ownership of an additional 3.5 million barrels of refined product storage capacity through our joint ownership of an additional eight terminals, spread across 22 states. We own or have an equity interest in four additional terminals, consisting of approximately 1 million barrels of refined storage capacity, which are currently inactive or only utilized to store feedstocks used in refining operations. We also have access to more than 140 third-party terminals through exchange, terminaling and similar arrangements. Our retail network consists of approximately 4,300 independently owned and operated CITGO-branded retail outlets located east of the Rocky Mountains. We and our predecessors have had a recognized brand presence in the U.S. for over 100 years.
This press release contains "forward-looking statements" within the meaning of the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. In some cases, you can identify these statements by forward-looking words such as "anticipate," "believe," "could," "estimate," "expect," "intend," "may," "plan," "predict," "project," "target," "will," "would," "should," the negative of these terms and similar terms and phrases. These statements relate to, among other things, expectations regarding revenues, costs and expenses, refining and other margins, profitability, cash flows, capital expenditures, liquidity and capital resources, our working capital requirements and other financial and operating items. These statements also relate to our industry, business strategy, goals and expectations concerning our market position and future operations. Any forward-looking statements are not guarantees of our future performance and are subject to risks and uncertainties that could cause actual results, developments and business decisions to differ materially from those contemplated by these forward-looking statements. These statements are based on assumptions and assessments made by our management in light of their experience and their perception of historical trends, current conditions, expected future developments and other factors they believe to be appropriate. Although we believe the assumptions upon which these forward-looking statements are based are reasonable, any of these assumptions could prove to be inaccurate, and the forward-looking statements based on these assumptions could be incorrect. In addition, our business and operations involve numerous risks and uncertainties, many of which are beyond our control, which could result in our expectations not being realized or could otherwise materially affect our financial condition, results of operations and cash flows. We caution to readers that these forward-looking statements are subject to known and unknown risks and uncertainties that may cause actual results to differ materially from the results that are projected, expressed or implied. We do not undertake any obligation to update any forward-looking statements, whether as a result of new information or development, future events or otherwise, except as required by law. Readers are cautioned not to place undue reliance on any of these forward-looking statements.
SOURCE CITGO Corporation