Amsterdam – April 21, 2009 – HEAD (VSX: HEAD, U.S. OTC: HEDYY.PK), a leading global manufacturer and marketer of sports equipment, announced today the commencement by HTM, a subsidiary of Head N.V., of a private exchange offer (the “Exchange Offer”), to exchange its outstanding €135,000,000 8½% Senior Notes due 2014 (the “Existing Notes”) for its new 10% Senior Secured Notes due 2014 (the “Secured Notes”). The private offer will not be made to all holders of Existing Notes, but exclusively to certain holders as further specified below. The Existing Notes were, and the Secured Notes will be, issued by HTM Sport- und Freizeitgeräte AG. The Secured Notes will be jointly and severally guaranteed by Head N.V. and Head Holding Unternehmensbeteiligung GmbH (“Head Holding”), HTM’s indirect and direct parent companies, respectively, and certain of HTM’s subsidiaries and will be secured by pledges or charges, as applicable, over certain inventories and trade receivables of HTM and certain subsidiaries of HTM, and cash under certain circumstances.
The purpose of the Exchange Offer is to reduce HTM’s overall indebtedness and related interest expense and to offer existing noteholders the opportunity to be secured creditors of HTM.
Concurrently with the Exchange Offer, HTM is also soliciting consents (the “Consent Solicitation”), from holders of Existing Notes to certain proposed amendments (the “Proposed Amendments”) to the indenture governing the Existing Notes (the “Existing Indenture”). All tenders of Existing Notes which are submitted will be deemed to be consents to the Proposed Amendments as a whole. The Proposed Amendments will reduce the protections afforded to holders of the Existing Notes by (i) eliminating substantially all of the covenants in the Existing Indenture governing the actions of the Issuer and its restricted subsidiaries (ii) eliminating or modifying certain events of default and (iii) modifying Mares S.p.A.’s guarantee of the Existing Notes. The supplemental indenture (the “Supplemental Indenture”) giving effect to the Proposed Amendments is expected to be executed on the settlement date of the Exchange Offer, subject to the consent of holders of not less than a majority of the outstanding (determined in accordance with the Existing Indenture) aggregate principal amount of the Existing Notes having validly consented to the Proposed Amendments. The Proposed Amendments will become effective and operative upon execution of the Supplemental Indenture.
The Exchange Offer and the Consent Solicitation will expire at 5:00 p.m., London time, on May 22, 2009, unless extended (the “Expiration Date”). Eligible holders of Existing Notes who validly tender, and do not properly withdraw, their Existing Notes in the Exchange Offer on or prior to 5:00 p.m., London time, on May 11, 2009, unless extended (the “Early Tender Date”) will receive €350 aggregate principal amount of the Secured Notes (the “Early Tender Consideration”) for each €1,000 principal amount of Existing Notes exchanged. Eligible holders of Existing Notes who validly tender their Existing Notes in the Exchange Offer on or prior to the Expiration Date but after the Early Tender Date will receive €300 aggregate principal amount of Secured Notes (the “Exchange Offer Consideration”) for each €1,000 principal amount of Existing Notes exchanged. In addition, on the settlement date, accrued and unpaid interest up to, but not including, the settlement date, if any, will be paid in cash on all properly tendered and accepted Existing Notes. Tenders of Existing Notes may be withdrawn at any time prior to the Early Tender Date, but not thereafter. HTM may terminate or withdraw the Exchange Offer at its sole discretion, at any time and for any reason.
The Secured Notes will be issued in minimum denominations of €1,000 and integral multiples thereof.
The Exchange Offer is being made within the United States only to “qualified institutional buyers” as that term is defined in Rule 144A under the Securities Act of 1933, as amended (the “Securities Act”) and to persons located outside of the United States and who would be participating in any transaction in accordance with Regulation S. The Secured Notes to be offered have not been registered under the Securities Act and may not be offered or sold in the United States absent an applicable exemption from registration requirements. This press release does not constitute an offer to sell or the solicitation of an offer to buy Existing Notes or Secured Notes in any jurisdiction in which such an offer or sale would be unlawful.
The Exchange Offer is not being made and will not be made, directly or indirectly, in or into the Republic of Italy, whether by mail or by any means or other instrument (including, without limitation, telephonically or electronically) or any facility of a national securities exchange publicly or privately available in the Republic of Italy.
HTM’s obligation to accept any Existing Notes tendered and to pay the applicable consideration for them is set forth solely in the Offering Circular. The Exchange Offer is made only by, and pursuant to, the terms set forth in the Offering Circular, and the information in this press release is qualified by reference to the Offering Circular. Subject to applicable law, HTM may amend, extend or terminate the Exchange Offer.
An application will be made to admit the Secured Notes to listing on the Official list of the Luxembourg Stock Exchange and to trading on the Euro MTF Market of that exchange.
Lucid Issuer Services Limited is serving as exchange, information and tabulation agent in connection with the Exchange Offer. Requests by holders for information, the Offering Circular and other documents should be directed to Lucid Issuer Services Limited, Leroy House, 436 Essex Road, London N1 3QP, U.K., Telephone: +44 20 7704 0880.
Head N.V. expects to announce its first quarter results on or about May 7, 2009.
We expect that our revenues for the first quarter of 2009 at constant currency, have declined by more than 10%.
Visibility of revenues for the full year ahead is even more limited. In particular, we are unable to determine whether the current downturn in the sporting goods industry will abate. However, our current expectation is that our 2009 revenues will be lower than our 2008 revenues. Such a decline, combined with the large cash costs of our interest expense, our capital expenditures and our having begun 2009 with less cash than at the same period in 2008, will result in us having to manage our working capital more aggressively particularly during the third and fourth quarters of the year. To the extent such actions are insufficient to fund our working capital requirements, we could be required to generate additional cash or secure additional credit facilities. However, the Exchange Offer is expected to reduce our cash interest expense.
More details on our liquidity and capital resources can be found on our website http://www.head.com
This press release includes forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. When used in this press release, the words “anticipate,” “believe,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “predict,” “project,” “will” and similar terms and phrases, including references to assumptions, as they relate to Head N.V., its management or third parties, identify forward-looking statements. Forward-looking statements include statements regarding Head N.V.’s business strategy, financial condition, results of operations, and market data, as well as any other statements that are not historical facts. These statements reflect beliefs of Head N.V.’s management as well as assumptions made by its management and information currently available to Head N.V.. Although Head N.V. believes that these beliefs and assumptions are reasonable, the statements are subject to numerous factors, risks and uncertainties that could cause actual outcomes and results to be materially different from those projected. These factors include, but are not limited to, the following: the impact of the current global economic turmoil, weather and other factors beyond their control, competitive pressures and trends in the sporting goods industry, our ability to implement their business strategy, our liquidity and capital expenditures, our ability to obtain financing, our ability to realize the cost savings expected from the cost reduction program, our ability to compete, including internationally, our ability to introduce new and innovative products, legal proceedings and regulatory matters, our ability to fund their future capital needs, and general economic conditions. These factors, risks and uncertainties expressly qualify all subsequent oral and written forward-looking statements attributable to Head N.V. or persons acting on its behalf.
HEAD Group is a leading global manufacturer and marketer of premium sports equipment.
HEAD NV’s ordinary shares are listed on the Vienna Stock Exchange (“HEAD”).
HTM is a subsidiary of Head N.V.
Our business is organized into four divisions: Winter Sports, Racquet Sports, Diving and Licensing. We sell products under the HEAD (tennis, squash and racquetball racquets, tennis balls, tennis footwear, badminton products, alpine skis, ski bindings and ski boots, snowboards, bindings and boots), Penn (tennis and racquetball balls), Tyrolia (ski bindings), and Mares/Dacor (diving equipment) brands.
We hold leading positions in all of our product markets and our products are endorsed by some of the world’s top athletes including Andre Agassi, Hermann Maier, Bode Miller, Amelie Mauresmo, Svetlana Kuznetsova, Novak Djokovic Andrew Murray, Ivan Ljubicic, Didier Cuche, Marco Büchel, Patrick Staudacher, Maria Riesch and Sarka Zahbrovska.
For more information, please visit our website: http://www.head.com
Analysts, investors, media and others seeking financial and general information, please contact:
Clare Vincent, Investor Relations
Tel: +44 207 499 7800
Fax: +44 207 491 7725
E mail: firstname.lastname@example.org
Ralf Bernhart, Chief Financial Officer
Tel: +43 1 70 179 354
Fax +43 1 707 8940
NL 1012 KK Amsterdam
Stock Market: Official Market of the Vienna Stock Exchange
HTM Sport- und Freizeitgeräte AG
A 2320 Schwechat
ISIN: XS0184717956 / XS0184719143
Stock Market: Luxembourg Stock Exchange