JetBlue Airways Corporation (New York) has issued this statement below concerning its partner Lufthansa (Lufthansa Group) (Frankfurt). Lufthansa has offered to its note holders a voluntary option to exchange Lufthansa notes for JetBlue stock:
JetBlue Airways Corporation Chief Financial Officer Mark Powers issued the following statement on the incentive offer commenced by Deutsche Lufthansa AG for bonds issued by its subsidiary in 2012 which are exchangeable for shares of JetBlue common stock:
“Lufthansa and its board representatives have been valued professional colleagues to JetBlue for many years and we expect to continue our various commercial relationships going forward. This offer, which is a continuation of a transaction that began in 2012, will have no impact on our outstanding share count.”
The response is in reaction to the following announcement by Lufthansa to permit voluntary exchange of Lufthansa notes into shares of JetBlue Airways Corporation:
Deutsche Lufthansa AG (“Lufthansa”) is launching a voluntary incentive payment offer (the “Offer”) to holders of the EUR 234.4 million 0.75% exchangeable senior notes due 2017 (the “Notes”) issued by Lufthansa Malta Blues LP (the “Issuer“) and guaranteed by Lufthansa, to exchange their Notes into shares of common stock (the “Shares”) of JetBlue Airways Corporation (“JetBlue”) on the terms and subject to the conditions set forth in the Incentive Payment Offer Document dated February , 2015 (the “Incentive Payment Offer Document”).
Lufthansa will offer a cash incentive payment (the “Cash Incentive Payment”) to holders of the Notes (each a “Noteholder”) who exercise their exchange rights prior to the expiration of the offer on March 17, 2015 at 11:59 p.m., New York City time (the “Expiration Deadline”).
Noteholders who validly accept the Offer prior to or at 5:00 p.m., New York City time, on March 3, 2015 (the “Early Participation Deadline”) will be eligible to receive the Early Participation Consideration, equal to EUR 2,500 per EUR 100,000 principal amount of Notes that are duly submitted for acceptance (the “Early Participation Consideration”). Noteholders who validly accept the Offer after that time but prior to the Expiration Deadline will be eligible to receive the Incentive Offer Consideration only, equal to EUR 1,750 per EUR 100,000 principal amount of Notes that are duly submitted for acceptance (the “Incentive Offer Consideration”). No accrued interest will be paid, and no further payments will be made in respect of Notes exchanged in connection with the Offer.
Noteholders may withdraw their acceptances at any time prior to the Expiration Deadline (11:59 p.m., New York City time on March 17, 2015). Subject to the requirements of applicable law, the expiration time of the Offer and the deadlines for accepting and withdrawing may be extended by Lufthansa in its discretion.
The payment of the Early Participation Consideration or the Incentive Offer Consideration, as the case may be, and the delivery of the Shares are expected to take place on March 26, 2015.
The Offer will not impact the rights of the Noteholders that do not submit their Notes for acceptance in the Offer.
If following the Offer, 90% or more of the Notes originally issued have been exchanged, Lufthansa will have the right to redeem the remaining Notes that remain outstanding at their principal amount together with accrued interest, pursuant to the Indenture governing the Notes.
About the Notes
In 2012, through a fully consolidated Lufthansa Group company, Lufthansa successfully raised EUR 234.4 million in gross proceeds through the issuance of the Notes. The Notes are due in 2017 and are exchangeable into Shares of JetBlue at the option of the Noteholders.
With this incentive payment offer Lufthansa Group intends to improve its financial debt profile. A successful transaction will allow for an early retirement of the Notes and a corresponding reduction in Lufthansa Group’s balance sheet debt, while finalizing the disposition of all or part of its share in JetBlue that was initiated through the issuance of the Notes in 2012.
Morgan Stanley & Co. International plc is acting as dealer manager for the Offer.
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN THE UNITED STATES OR INTO ANY JURISDICTION INTO WHICH SUCH DISTRIBUTION WOULD BE UNLAWFUL. THIS NOTICE IS FOR INFORMATION ONLY AND IS NOT AN OFFER TO PURCHASE OR A SOLICITATION OF OFFERS TO SELL SECURITIES. THE OFFER IS BEING MADE SOLELY PURSUANT TO THE INCENTIVE PAYMENT OFFER DOCUMENT.
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