Silk Bidco AS €455,000,000 7.50% Senior Secured Notes Due 2022
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OFFERING MEMORANDUM NOT FOR GENERAL CIRCULATION IN THE UNITED STATES Silk Bidco AS €455,000,000 7.50% Senior Secured Notes due 2022 Silk Bidco AS (the “Company”) is offering €455,000,000 aggregate principal amount of its 7.50% Senior Secured Notes due 2022 (the “Notes”). The Company will pay interest on the Notes semi-annually in arrears on each February 1 and August 1, commencing on August 1, 2015. Prior to February 1, 2018, the Company may redeem at its option all or a portion of the Notes by paying a “make-whole” premium. At any time on or after February 1, 2018, the Company may redeem at its option all or part of the Notes by paying a specified redemption price. In addition, prior to February 1, 2018, the Company may redeem at its option no more than 40% of the aggregate principal amount of the Notes with the net cash proceeds from certain equity offerings. Upon certain events defined as constituting a change of control, the Company may be required to make an offer to purchase the Notes. In the event of certain developments affecting taxation, the Company may redeem all, but not less than all, of the Notes. The Notes will be senior obligations of the Company and will be guaranteed (the “Notes Guarantees”) within 70 days of the Hurtigruten Tender Offer Settlement Date (as defined herein) on a senior secured basis by certain of the Company’s subsidiaries (together, the “Guarantors”). As of the Issue Date, subject to the operation of the Agreed Security Principles, the Notes will be secured by first- ranking security interests over substantially all of the assets of the Company and Silk Midco AS. In addition, within 70 days of the Hurtigruten Tender Offer Settlement Date, the Guarantors will, subject to the operation of the Agreed Security Principles (as defined herein), grant security on a first-ranking basis over their material assets as described herein. The Notes will be initially secured by first-ranking security interests over substantially the same assets that secure the Revolving Credit Facility (as defined herein), subject to the operation of the Agreed Security Principles and the Intercreditor Agreement (as defined herein). Under the terms of the Intercreditor Agreement, lenders under the Revolving Credit Facility, counterparties to certain hedging obligations and holders of certain other future indebtedness will receive proceeds from the enforcement of the security in priority to holders of the Notes. See “Summary—The Offering— Security.” The Notes were represented on issue by global notes. The Notes were delivered through Euroclear Bank SA/NV (“Euroclear”) and Clearstream Banking, société anonyme (“Clearstream”) on February 6, 2015 (the “Issue Date”). This offering memorandum includes information on the terms of the Notes and the Notes Guarantees, including redemption and repurchase prices, security, covenants and transfer restrictions. There is currently no public market for the Notes. Application was made to list the Notes on the Official List of the Luxembourg Stock Exchange and for trading on the Euro MTF market of the Luxembourg Stock Exchange (the “Euro MTF”). This offering memorandum constitutes a prospectus for the purposes of Luxembourg law dated July 10, 2005 on prospectuses for securities as amended. This offering memorandum shall only be used for the purposes for which it has been published. Investing in the Notes involves risk. See “Risk Factors” beginning on page 35. Price: 100% plus accrued interest, if any, from the Issue Date. The Notes and the Notes Guarantees have not been, and will not be, registered under the U.S. Securities Act of 1933, as amended (the “U.S. Securities Act”), or the laws of any other jurisdiction. The Notes and the Notes Guarantees may not be offered or sold within the United States or to, or for the account or benefit of, U.S. persons, except to qualified institutional buyers in reliance on the exemption from registration provided by Rule 144A under the U.S. Securities Act (“Rule 144A”) and to non-U.S. persons in offshore transactions in reliance on Regulation S under the U.S. Securities Act (“Regulation S”). You are hereby notified that sellers of the Notes and the Notes Guarantees may be relying on the exemption from the provisions of Section 5 of the U.S. Securities Act provided by Rule 144A. Outside the United States, sellers may be relying on Regulation S under the U.S. Securities Act. See “Notice to Investors” and “Transfer Restrictions” for additional information about eligible offerees and transfer restrictions. Sole Global Coordinator and Bookrunner Goldman Sachs International The date of this offering memorandum is February 26, 2015 FJORD_IFC.indd 1 15/01/2015 15:53 TABLE OF CONTENTS Summary ........................................................................ 1 Risk Factors ...................................................................... 35 Use of Proceeds ................................................................... 72 Capitalization ..................................................................... 73 Selected Historical Financial Data .................................................... 74 Management’s Discussion and Analysis of Our Financial Condition and Results of Operations . 78 Industry .......................................................................... 112 Business ......................................................................... 116 Management ...................................................................... 144 Principal Shareholders .............................................................. 148 Related Party Transactions .......................................................... 149 Description of Other Indebtedness .................................................... 150 Description of the Notes ............................................................ 160 Taxation ......................................................................... 239 Certain Limitations on Validity and Enforceability ........................................ 247 Book-Entry, Delivery and Form ....................................................... 251 Transfer Restrictions ............................................................... 255 Plan of Distribution ................................................................. 257 Legal Matters ..................................................................... 260 Independent Auditors ............................................................... 261 Enforceability of Judgments ......................................................... 262 Where You Can Find More Information ................................................ 263 Listing and General Information ...................................................... 264 Index to Financial Statements ........................................................ F-1 i IMPORTANT INFORMATION ABOUT THIS OFFERING MEMORANDUM We have not authorized anyone to provide any information or to make any representations other than those contained in this offering memorandum. We take no responsibility for, and can provide no assurance as to the reliability of, any other information that others may give you. This offering memorandum is an offer to sell only the Notes offered hereby, but only under circumstances and in jurisdictions where it is lawful to do so. The information contained in this offering memorandum is current only as of its date. Our business, financial condition, results of operations and prospects may have changed since that date. This offering memorandum is a document that we are providing only to prospective purchasers of the Notes. You should read this offering memorandum before making a decision whether to purchase the Notes. You must not use this offering memorandum for any other purpose. We have prepared this offering memorandum, and we are solely responsible for its contents. You are responsible for making your own examination of us and your own assessment of the merits and risks of investing in the Notes. In making your investment decision, you should not consider any information in this offering memorandum to be investment, legal or tax advice. You should consult your own counsel, accountant and other advisors for legal, tax, business, financial and related advice regarding purchasing the Notes. By purchasing the Notes, you will be deemed to have acknowledged that: • you have reviewed this offering memorandum; • you have had an opportunity to request, receive and review additional information that you need from us; • you have made certain acknowledgements, representations and agreements as set forth under the captions “Notice to Investors;” and • the Initial Purchaser is not responsible for, and is not making any representation to you concerning, our future performance or the accuracy or completeness of this offering memorandum. None of the Initial Purchaser, the Trustee, the Paying Agent or the Transfer Agent undertakes to review the financial condition or affairs of any of the Company or the Guarantors during the life of the Notes nor to advise any investor or potential investor in the Notes of any information coming to the attention of the Initial Purchaser. THE SECURITIES OFFERED HEREBY HAVE NOT BEEN RECOMMENDED BY ANY UNITED STATES FEDERAL OR STATE SECURITIES COMMISSION OR REGULATORY AUTHORITY. FURTHERMORE, THE FOREGOING AUTHORITIES HAVE NOT CONFIRMED THE ACCURACY OR DETERMINED THE ADEQUACY OF THIS DOCUMENT. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. The distribution of this offering memorandum and the Offering