REG - American Axle & Mfg. Dowlais Group PLC - UPDATE ON AAM’S FINANCING ARRANGEMENTS

DowlaisAnnouncement

25/02/2025 07:00

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RNS Number : 2803Y  American Axle & Mfg Hldgs, Inc.  25 February 2025

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN, INTO OR FROM ANY JURISDICTION
WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OR
REGULATIONS OF SUCH JURISDICTION

 

FOR IMMEDIATE RELEASE

25 February 2025

 

RECOMMENDED CASH AND SHARE COMBINATION

OF

DOWLAIS GROUP PLC ("DOWLAIS")

WITH

AMERICAN AXLE & MANUFACTURING HOLDINGS, INC. ("AAM")

UPDATE ON AAM'S FINANCING ARRANGEMENTS AND INVESTOR PRESENTATION

On 29 January 2025, the boards of AAM and Dowlais announced that they had
reached agreement on the terms of a recommended cash and share offer to be
made by AAM for the entire issued and to be issued ordinary share capital of
Dowlais (the "Combination"), to be implemented by way of a court-sanctioned
scheme of arrangement under Part 26 of the Companies Act (the "Scheme") (the
"2.7 Announcement").

Unless otherwise defined in this announcement, capitalised terms used in this
announcement shall have the same meanings given to them in the 2.7
Announcement.

Financing of the Combination

AAM announces that, on 24 February 2025, AAM and certain of its subsidiaries
entered into a second amendment and incremental facility agreement ("Second
Amendment") between, amongst others, American Axle & Manufacturing, Inc.
as borrower, JPMorgan Chase Bank, N.A. as administrative agent and certain
financial institutions as lenders in relation to the financing of the
Combination.

As previously disclosed in the 2.7 Announcement, on 29 January 2025, AAM and
certain of its subsidiaries entered into the Bridge Credit Agreements. AAM
further announces that, on 24 February 2025, AAM and certain of its
subsidiaries entered into: (i) an amended and restated first lien bridge
credit agreement with the lenders party thereto, and JPMorgan Chase Bank, N.A.
as administrative agent (the "Amended and Restated First Lien Bridge Credit
Agreement"); and (ii) an amended and restated second lien bridge credit
agreement with the lenders party thereto, and JPMorgan Chase Bank, N.A. as
administrative agent (the "Amended and Restated Second Lien Bridge Credit
Agreement" and together with the Amended and Restated First Lien Bridge Credit
Agreement, the "Amended and Restated Bridge Credit Agreements"). The Amended
and Restated Bridge Credit Agreements amend and restate the Bridge Credit
Agreements to, among other things, make certain conforming changes consistent
with the Second Amendment.

As previously disclosed in the 2.7 Announcement, on 29 January 2025, AAM and
certain of its subsidiaries entered into the Backstop Credit Agreement.
Following entry into the Second Amendment, on 24 February 2025, AAM and
certain of its subsidiaries delivered a backstop termination letter effective
as of 24 February 2025, pursuant to which the Backstop Credit Agreement was
terminated (the "Backstop Termination Letter Agreement").

In addition to the Second Amendment, the Backstop Termination Letter Agreement
and the Amended and Restated Bridge Credit Agreements, on 24 February 2025,
AAM and certain of its subsidiaries entered into the following amended and
restated fee and engagement letters to, among other things, make certain
conforming changes consistent with the Second Amendment: (i) an amended and
restated fee credit letter; (ii) an amended and restated arranger fee letter;
(iii) an amended and restated administrative agent fee letter; (iv) an amended
and restated securities engagement letter; (v) an amended and restated
engagement and syndication letter (together, the "Fee and Engagement
Letters").

Copies of the Second Amendment, the Backstop Termination Letter Agreement, the
Amended and Restated Bridge Credit Agreements and the Fee and Engagement
Letters will be available, subject to certain restrictions relating to persons
in, or resident in, Restricted Jurisdictions, on AAM's website
at https://www.aam.com/investors (https://www.aam.com/investors) by no later
than 12 noon on the Business Day following this announcement.

Investor presentation

On 24 February 2025, AAM held an investor meeting for its current and
prospective shareholders. In accordance with Rule 20.1(c) of the Code, a copy
of the presentation used during this investor meeting will be available,
subject to certain restrictions relating to persons in, or resident in,
Restricted Jurisdictions, on AAM's website at https://www.aam.com/investors
(https://www.aam.com/investors) by no later than 12 noon on the Business Day
following this announcement.

Enquiries

 AAM

 Christopher M. Son, Vice President, Marketing & Communications      +1 (313) 758-4814

 J.P. Morgan (Exclusive financial adviser to AAM)

 David Walker / Ian MacAllister                                      +1 (212) 270 6000
 Robert Constant / Jonty Edwards                                     +44 (0) 203 493 8000

 FGS Global (PR adviser to AAM)

 Jared Levy / Jim Barron                                             +1 212 687 8080
 Charlie Chichester / Rory King                                      +44 20 7251 3801

Allen Overy Shearman Sterling LLP is acting as legal adviser to AAM in
connection with the Combination.

Disclaimers

Important notices relating to financial advisers

J.P. Morgan Securities LLC, together with its affiliate J.P. Morgan Securities
plc (which conducts its UK investment banking business as J.P. Morgan Cazenove
and which is authorised in the United Kingdom by the Prudential Regulation
Authority and regulated in the United Kingdom by the Prudential Regulation
Authority and the Financial Conduct Authority). J.P. Morgan is acting as
financial adviser exclusively for AAM and no one else in connection with the
Combination and will not regard any other person as its client in relation to
the Combination and will not be responsible to anyone other than AAM for
providing the protections afforded to clients of J.P. Morgan or its
affiliates, nor for providing advice in relation to the Combination or any
other matter or arrangement referred to herein.

Further information

This announcement is for information purposes only and is not intended to, and
does not, constitute or form part of any offer or invitation to purchase,
otherwise acquire, subscribe for, sell or otherwise dispose of, any securities
or the solicitation of any vote or approval in any jurisdiction pursuant to
the Combination or otherwise. In particular, this announcement is not an offer
of securities for sale into the U.S. No offer of securities shall be made in
the U.S. absent registration under the U.S. Securities Act, or pursuant to an
exemption from, or in a transaction not subject to, such registration
requirements. The Combination will be made solely through the Scheme Document
(or, if the Combination is implemented by way of a Takeover Offer, the
Takeover Offer documents), which, together with the accompanying Forms of
Proxy and Forms of Election in relation to the Mix and Match Facility, which
will contain the full terms and conditions of the Combination, including
details of how to vote in respect of the Combination. Any decision in respect
of the Combination should be made only on the basis of the information in the
Scheme Document (or, if the Combination is implemented by way of a Takeover
Offer, the Takeover Offer documents).

Dowlais will prepare the Scheme Document to be distributed to Dowlais
Shareholders. Dowlais and AAM urge Dowlais Shareholders to read the Scheme
Document (or any other document by which the Combination is made) in full when
it becomes available because it will contain important information relating to
the Combination, including details of how to vote in respect of the Scheme.

The statements contained in this announcement are made as at the date of this
announcement, unless some other time is specified in relation to them, and
publication of this announcement shall not give rise to any implication that
there has been no change in the facts set forth in this announcement since
such date.

This announcement does not constitute a prospectus or a prospectus
equivalent document.

This announcement has been prepared for the purpose of complying with English
law and the Code and the information disclosed may not be the same as that
which would have been disclosed if this announcement had been prepared in
accordance with the laws of jurisdictions outside England.

The Combination will be subject to the applicable requirements of English law,
the Code, the Panel, the London Stock Exchange and the FCA.

Neither the SEC nor any U.S. state securities commission has approved,
disproved or passed judgment upon the fairness or the merits of the
Combination or determined if this announcement is adequate, accurate or
complete. Any representation to the contrary is a criminal offence in the U.S.

Overseas Shareholders

The release, publication or distribution of this announcement in jurisdictions
other than the UK, and the availability of the Combination to Dowlais
Shareholders who are not resident in the UK, may be restricted by law and
therefore any persons who are not resident in the UK or who are subject to the
laws of any jurisdiction other than the UK (including Restricted
Jurisdictions) should inform themselves about, and observe, any applicable
legal or regulatory requirements. In particular, the ability of persons who
are not resident in the UK or who are subject to the laws of another
jurisdiction to participate in the Combination or to vote their Dowlais Shares
in respect of the Scheme at the Court Meeting, or to execute and deliver Forms
of Proxy appointing another to vote at the Court Meeting on their behalf, may
be affected by the laws of the relevant jurisdictions in which they are
located or to which they are subject. Any failure to comply with applicable
legal or regulatory requirements of any jurisdiction may constitute a
violation of securities laws in that jurisdiction. To the fullest extent
permitted by applicable law, the companies and persons involved in the
Combination disclaim any responsibility or liability for the violation of such
restrictions by any person.

Unless otherwise determined by AAM or required by the Code, and permitted by
applicable law and regulation, the Combination shall not be made available,
directly or indirectly, in, into or from a Restricted Jurisdiction where to do
so would violate the laws in that jurisdiction and no person may vote in
favour of the Combination by any such use, means, instrumentality or form
within a Restricted Jurisdiction or any other jurisdiction if to do so would
constitute a violation of the laws of that jurisdiction.

Accordingly, copies of this announcement and any formal documentation relating
to the Combination are not being, and must not be, directly or indirectly,
mailed or otherwise forwarded, distributed or sent in or into or from any
Restricted Jurisdiction or any jurisdiction where to do so would constitute a
violation of the laws of such jurisdiction and persons receiving such
documents (including custodians, nominees and trustees) must not mail or
otherwise forward, distribute or send them in or into or from any Restricted
Jurisdiction. Doing so may render invalid any related purported vote in
respect of acceptance of the Combination.

Further details in relation to Dowlais Shareholders in overseas jurisdictions
will be contained in the Scheme Document (or, if the Combination is
implemented by way of a Takeover Offer, the Takeover Offer documents).

Additional information for U.S. investors in Dowlais

The Combination relates to an offer for the shares of an English company and
is proposed to be implemented by means of a scheme of arrangement provided for
under English company law. The Combination, implemented by way of a scheme of
arrangement, is not subject to the tender offer rules or the related proxy
solicitation rules under the U.S. Exchange Act. Accordingly, the Combination
is subject to the disclosure requirements and practices applicable to a scheme
of arrangement involving a target company in the UK listed on the London Stock
Exchange, which differ from the disclosure requirements of the U.S. tender
offer and related proxy solicitation rules. If, in the future, AAM exercises
its right to elect to implement the Combination by way of a Takeover Offer and
determines to extend the Takeover Offer into the U.S., such Takeover Offer
will be made in compliance with applicable U.S. laws and regulations.

The New AAM Shares to be issued pursuant to the Combination have not been and
will not be registered under the U.S. Securities Act, and may not be offered
or sold by AAM in the U.S. absent registration or an applicable exemption from
the registration requirements of the U.S. Securities Act. The New AAM Shares
to be issued pursuant to the Combination will be issued pursuant to the
exemption from registration set forth in Section 3(a)(10) of the U.S.
Securities Act. If, in the future, AAM exercises its right to elect to
implement the Combination by way of a Takeover Offer or otherwise determines
to conduct the Combination in a manner that is not exempt from the
registration requirements of the U.S. Securities Act, it will file a
registration statement with the SEC that will contain a prospectus with
respect to the issuance of New AAM Shares. In this event, Dowlais Shareholders
are urged to read these documents and any other relevant documents filed with
the SEC, as well as any amendments or supplements to all such documents,
because they will contain important information, and such documents will be
available free of charge at the SEC's website at  www.sec.gov
(http://www.sec.gov/)   or by directing a request to AAM's contact for
enquiries identified above.

This announcement contains, and the Scheme Document will contain certain
unaudited financial information relating to Dowlais that has been prepared in
accordance with UK-endorsed International Financial Reporting Standards
("IFRS") and thus may not be comparable to financial information of U.S.
companies or companies whose financial statements are prepared in accordance
with U.S. generally accepted accounting principles. U.S. generally accepted
accounting principles differ in certain significant respects from IFRS.

Dowlais is incorporated under the laws of a non-U.S. jurisdiction, some or all
of Dowlais' officers and directors reside outside the U.S., and some or all of
Dowlais' assets are or may be located in jurisdictions outside the U.S.
Therefore, U.S. Dowlais Shareholders (defined as Dowlais Shareholders who are
U.S. persons as defined in the U.S. Internal Revenue Code or "IRC") may have
difficulty effecting service of process within the U.S. upon those persons or
recovering against Dowlais or its officers or directors on judgments of U.S.
courts, including judgments based upon the civil liability provisions of the
U.S. federal securities laws. Further, it may be difficult to compel a
non-U.S. company and its affiliates to subject themselves to a U.S. court's
judgment. It may not be possible to sue Dowlais or its officers or directors
in a non-U.S. court for violations of the U.S. securities laws.

The receipt of New AAM Shares and cash by Dowlais Shareholders as
consideration for the transfer of Dowlais Shares pursuant to the Combination
may be a taxable transaction for U.S. federal income tax purposes and under
applicable U.S. state and local, as well as foreign and other, tax laws. Such
consequences, if any, are not generally described herein. Each Dowlais
Shareholder is urged to consult with legal, tax and financial advisers in
connection with making a decision regarding the Combination, including in
light of the potential application of Section 304 of the IRC to the
Combination.

Forward-looking statements

In this announcement, AAM makes statements concerning its and Dowlais'
expectations, beliefs, plans, objectives, goals, strategies, and future events
or performance, including, but not limited to, certain statements related to
the ability of AAM and Dowlais to consummate AAM's business combination with
Dowlais (the "Business Combination") in a timely manner or at all; future
capital expenditures, expenses, revenues, economic performance, synergies,
financial conditions, market growth, dividend policy, losses and future
prospects and business; and management strategies and the expansion and growth
of AAM's and the combined company's operations.  Such statements are
"forward-looking" statements within the meaning of the Private Securities
Litigation Reform Act of 1995 and relate to trends and events that may affect
AAM's or the combined company's future financial position and operating
results.  The terms such as "will," "may," "could," "would," "plan,"
"believe," "expect," "anticipate," "intend," "project," "target," and similar
words or expressions, as well as statements in future tense, are intended to
identify forward-looking statements.  Forward-looking statements should not
be read as a guarantee of future performance or results and will not
necessarily be accurate indications of the times at, or by, which such
performance or results will be achieved.  These forward-looking statements
involve certain risks and uncertainties that could cause actual results to
differ materially from those expressed or implied by these statements.  These
risks and uncertainties related to AAM include factors detailed in the reports
AAM files with the United States Securities and Exchange Commission (the
"SEC"), including those described under "Risk Factors" in its most recent
Annual Report on Form 10-K and its Quarterly Reports on Form 10-Q.  These
forward-looking statements speak only as of the date of this communication.
AAM expressly disclaims any obligation or undertaking to disseminate any
updates or revisions to any forward-looking statement contained herein to
reflect any change in its or Dowlais' expectations with regard thereto or any
change in events, conditions or circumstances on which any such statement is
based.

Additional Information

This announcement may be deemed to be solicitation material in respect of the
Business Combination, including the issuance of AAM's shares of common stock
in respect of the Business Combination.  In connection with the foregoing
proposed issuance of AAM's shares of common stock, AAM expects to file a proxy
statement on Schedule 14A (together with any amendments and supplements
thereto, the "Proxy Statement") with the SEC.  To the extent the Business
Combination is effected as a scheme of arrangement under English law, the
issuance of AAM's shares of common stock in connection with the Business
Combination would not be expected to require registration under the U.S.
Securities Act of 1933, as amended (the "Securities Act"), pursuant to an
exemption provided by Section 3(a)(10) under the Securities Act.  In the
event that AAM exercises its right to elect to implement the Business
Combination by way of a takeover offer (as defined in the UK Companies Act
2006) or otherwise determines to conduct the Business Combination in a manner
that is not exempt from the registration requirements of the Securities Act,
AAM expects to file a registration statement with the SEC containing a
prospectus with respect to the AAM's shares that would be issued in the
Business Combination.  INVESTORS AND SHAREHOLDERS ARE URGED TO READ THE PROXY
STATEMENT, THE SCHEME DOCUMENT, AND OTHER RELEVANT DOCUMENTS FILED OR TO BE
FILED BY AAM WITH THE SEC OR INCORPORATED BY REFERENCE IN THE PROXY STATEMENT
(IF ANY) CAREFULLY WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN
IMPORTANT INFORMATION ABOUT AAM, THE BUSINESS COMBINATION AND RELATED
MATTERS.  Investors and shareholders will be able to obtain free copies of
the Proxy Statement, the scheme document, and other documents filed by AAM
with the SEC at the SEC's website at http://www.sec.gov (http://www.sec.gov/)
 .  In addition, investors and shareholders will be able to obtain free
copies of the Proxy Statement, the scheme document, and other documents filed
by AAM with the SEC at https://www.aam.com/investors
(https://www.aam.com/investors) .

 Participants in the Solicitation

AAM and its directors, executive officers and certain other members of
management and employees will be participants in the solicitation of proxies
from AAM's shareholders in respect of the Business Combination, including the
proposed issuance of AAM's shares of common stock in connection with the
Business Combination.  Information regarding AAM's directors and executive
officers is contained in its Annual Report on Form 10-K for the fiscal year
ended December 31, 2023, which was filed with the SEC on February 16, 2024,
the definitive proxy statement on Schedule 14A for AAM's 2024 annual meeting
of stockholders, which was filed with the SEC on March 21, 2024 and the
Current Report on Form 8-K of AAM, which was filed with the SEC on May 2,
2024.  Additional information regarding the identity of participants, and
their direct or indirect interests, by security holdings or otherwise, will be
set forth in the Proxy Statement when it is filed with the SEC.  To the
extent holdings of AAM's securities by its directors or executive officers
change from the amounts set forth in the Proxy Statement, such changes will be
reflected on Initial Statements of Beneficial Ownership on Form 3 or
Statements of Change in Ownership on Form 4 filed with the SEC by AAM.  These
documents may be obtained free of charge from the SEC's website at www.sec.gov
and AAM's website at https://www.aam.com/investors
(https://www.aam.com/investors) .

No Offer or Solicitation

This announcement is not intended to and shall not constitute an offer to sell
or the solicitation of an offer to sell or the solicitation of an offer to buy
any securities or a solicitation of any vote of approval, nor shall there be
any sale of securities in any jurisdiction in which such offer, solicitation
or sale would be unlawful prior to registration or qualification under the
securities laws of any such jurisdiction.

Publication on website

This announcement is required to be published pursuant to Rule 26 of the Code
and will be available, subject to certain restrictions relating to persons
resident in Restricted Jurisdictions, on AAM's website at
 https://www.aam.com/investors (https://www.aam.com/investors) promptly and
in any event by no later than 12 noon (London time) on the business day (as
defined in the Code) following the date of this announcement. Neither the
content of the websites referred to in this announcement nor the content of
any website accessible from hyperlinks in this announcement is incorporated
into, or forms part of, this announcement.

Rounding

Certain figures included in this announcement have been subjected to rounding
adjustments. Accordingly, figures shown for the same category presented in
different tables may vary slightly and figures shown as totals in certain
tables may not be an arithmetic aggregation of the figures that precede them.

General

If you are in any doubt about the contents of this announcement or the action
you should take, you are recommended to seek your own independent financial
advice immediately from your stockbroker, bank manager, solicitor, accountant
or independent financial adviser duly authorised under FSMA if you are
resident in the United Kingdom or, if not, from another appropriately
authorised independent financial adviser.

 

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