CITIGROUP
GLOBAL MARKETS INC.
+1-800-558-3745
(toll free) or
+1-212-723-6108
(collect)
Attention: Liability
Management Group
Bank of
New York Mellon is acting as depositary. Persons with questions
regarding the Offers should contact Citi at the telephone numbers listed
above. If you are in Luxembourg, you may (but are not required to)
contact the The Bank of New York (Luxembourg) S.A., acting as Luxembourg tender
agent, and ask it to assist you in tendering Notes, at Aerogolf Center, 1A
Hoehenhof, L-1736 Senningerberg, Luxembourg. Requests for copies of the Offer to
Purchase and the related Letter of Transmittal may be directed to the Global
Bondholder Services Corporation, acting as information agent, at +1-866-540-1500
(toll free) or +1-212-430-3774 (collect).
About
Telefónica de Argentina S.A.
Telefónica
de Argentina S.A. was incorporated in Argentina in 1990 as an Argentine
sociedad anónima
(a limited
liability company). Telefónica de Argentina S.A. has a non-expiring
license to provide telecommunications services throughout Argentina. Telefónica
de Argentina S.A. also provides other telephone-related services such as
international long-distance service, data transmission and Internet
service.
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CONTACT:
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Telefónica
de Argentina S.A.
Irene
Bertuzzi
(54
11) 4332-3857
bertuzzi@telefonica.com.ar
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SOURCE:
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Telefónica
de Argentina S.A.
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TELEFÓNICA
DE ARGENTINA S.A.
Offers
to Purchase for Cash
Up
to US$50,000,000
and
up to Argentine Ps.
200,000,000 aggregate purchase price for its 8.850%
Conversion
Notes due August 2011, 9.125% Notes due
November
2010 and 8.850% Notes due August 2011
Telefónica
de Argentina S.A., an Argentine
sociedad anónima
(a limited
liability company) (the “
Company
”), hereby offers to
registered holders (each a “
Holder
” and collectively, the
“
Holders
”), upon the
terms and subject to the conditions set forth in this Offer to Purchase (the
“
Offer to Purchase
”)
and in the accompanying letter of transmittal (the “
Letter of Transmittal
”), to
purchase debt securities of the Company of each series listed in the table below
(collectively, the “
Notes
”) for an aggregate
purchase price of up to US$50 million and up to Argentine Ps.200 million in
cash.
This
Offer to Purchase comprises an offer to purchase up to the Maximum U.S. Dollar
Tender Amount (defined herein) (the “
U.S. Dollar Offer
”) and an
offer to purchase up to the Maximum Argentine Peso Tender Amount (defined
herein) (the “
Argentine Peso
Offer
” and, together with the U.S. Dollar Offer, the “
Offers
”) of the Notes.
Holders of Notes may elect to tender Notes in either Offer, but will not be able
to tender the same Notes in both Offers. If the aggregate purchase price of
Notes of all series tendered in the U.S. Dollar Offer exceeds the Maximum U.S.
Dollar Tender Amount, then we will accept for purchase (1) first, all of the
Notes with the First Acceptance Priority Level validly tendered on a pro rata
basis (to the extent necessary), (2) thereafter the Notes with the Second
Acceptance Priority Level validly tendered on a pro rata basis (to the extent
necessary) and (3) thereafter the Notes with the Third Acceptance Priority Level
validly tendered on a pro rata basis (to the extent necessary) (with adjustments
downward to avoid the purchase of Notes in a principal amount other than
multiples of US$1,000) such that the total purchase price payable for the Notes
accepted in the U.S. Dollar Offer does not exceed US$50 million, provided that
in no event will the aggregate purchase price of the 2011 Notes purchased by the
Company in the U.S. Dollar Offer exceed US$25 million. Similarly, if the
aggregate purchase price of Notes of all series tendered in the Argentine Peso
Offer exceeds the Maximum Argentine Peso Tender Amount, then we will accept for
purchase (1) first, all of the Notes with the First Acceptance Priority Level
validly tendered on a pro rata basis (to the extent necessary), (2) thereafter
the Notes with the Second Acceptance Priority Level validly tendered on a pro
rata basis (to the extent necessary) and (3) thereafter the Notes with the Third
Acceptance Priority Level validly tendered on a pro rata basis (to the extent
necessary) (with adjustments downward to avoid the purchase of Notes in a
principal amount other than multiples of US$1,000) such that the total purchase
price payable for the Notes accepted in the Argentine Peso Offer does not exceed
Argentine Ps.200 million, provided that in no event will the aggregate purchase
price of the 2011 Notes purchased by the Company in the Argentine Peso Offer
exceed Argentine Ps.100 million.
For
more information regarding possible proration in the U.S. Dollar Offer and/or
the Argentine Peso Offer with respect to a particular series of Notes, please
see “Terms of the Offers—Maximum Tender Amounts” below.
The “U.S.
Dollar Tender Offer Consideration” for each US$1,000 principal amount of the
8.850% Conversion Notes due August 2011 (the “
2011 Conversion Notes
”), for
each US$1,000 principal amount of the 9.125% Notes due November 2010 (the “
2010 Notes
”) and for each
US$1,000 principal amount of the 8.850% Notes due August 2011 (the “
2011 Notes
”), if applicable,
in accordance with the Acceptance Priority Level, validly tendered and accepted
for purchase pursuant to the Offers will be the applicable U.S. dollar tender
offer consideration for each series of Notes set forth in the table below (in
each case, the “
U.S. Dollar
Tender Offer Consideration
”). Holders of Notes validly tendered in the
U.S. Dollar Offer before the Early Tender Date and accepted for purchase will
receive the applicable U.S. Dollar Tender Offer Consideration plus the
applicable early tender premium for each series of Notes set forth in the table
below (the “
Early Tender
Premium
” and, together with the U.S. Dollar Tender Offer Consideration,
the “
Total U.S. Dollar
Consideration
”). Holders of Notes validly tendered in the U.S. Dollar
Offer after the Early Tender Date and accepted for purchase will receive only
the U.S. Dollar Tender Offer Consideration.
The
“Argentine Peso Tender Offer Consideration” for each US$1,000 principal amount
of the 2011 Conversion Notes, for each US$1,000 principal amount of the 2010
Notes and for each US$1,000 principal amount of the 2011 Notes, if applicable,
in accordance with the Acceptance Priority Level, validly tendered and accepted
for purchase pursuant to the Argentine Peso Offer will be the applicable
Argentine
peso
tender
offer consideration for each series of Notes set forth in the table below (in
each case, the “
Argentine Peso
Tender Offer Consideration
”, and together with the U.S. Dollar Tender
Offer Consideration, the “
Tender Offer Consideration
”).
Holders of Notes validly tendered in the Argentine Peso Offer before the Early
Tender Date and accepted for purchase will receive the applicable Argentine Peso
Tender Offer Consideration plus the applicable Early Tender Premium for each
series of Notes set forth in the table below (the Early Tender Premium together
with the Argentine Peso Tender Offer Consideration, the “
Total Argentine Peso
Consideration
”)
(the
Total Argentine Peso Consideration together with the Total U.S. Dollar
Consideration, the “
Total
Consideration
”). Holders of Notes validly tendered in the Argentine Peso
Offer after the Early Tender Date and accepted for purchase will receive only
the Argentine Peso Tender Offer Consideration.
All
Holders of such purchased Notes may elect to tender all or a portion of their
Notes in the U.S. Dollar Offer and/or the Argentine Peso Offer. Holders that
validly tender Notes in the U.S. Dollar Offer shall receive payment in U.S.
Dollars for their Notes that are accepted for purchase and Holders that validly
tender Notes in the Argentine Peso Offer shall receive payment in Argentine
pesos
for their Notes
that are accepted for purchase, subject to the applicable Maximum Tender Amount.
Payment in Argentine
pesos
will be based on the
Total Argentine Peso Consideration or Argentine Peso Tender Offer Consideration,
as applicable, expressed in U.S. dollars, converted to Argentine
pesos
at the greater of (a)
the applicable U.S. dollar-Argentine
peso
exchange rate prevailing
on the Exchange Rate Date (defined herein) (the “
Exchange Rate
”) and (b)
Argentine Ps.3.790 per US$1.00. We will announce the applicable exchange rate
upon which payment in Argentine
pesos
will be based by press
release promptly following the Exchange Rate Date. In addition, all Holders of
such purchased Notes will also receive the applicable accrued and unpaid
interest on the Notes up to, but excluding, the date of payment of the
applicable Tender Offer Consideration (the “
Settlement Date
”) in the
applicable Offer currency. The applicable Tender Offer Consideration, the Early
Tender Premium, if any, and the applicable accrued and unpaid interest will be
payable on the Settlement Date. Any payments of such accrued and unpaid interest
on the Notes will not be made from the applicable Maximum Tender
Amount.
The
Offers are being made on the terms and subject to the conditions set forth in
this Offer to Purchase and in the accompanying Letter of Transmittal. The
outstanding Notes of each series are represented by global certificates
registered in the name of The Depository Trust Company or its nominee (“
DTC
”). All Holders of Notes
electing to tender in these Offers must do so pursuant to DTC’s book-entry
procedures, but only Holders who hold their Notes through Euroclear or
Clearstream will be able to participate in the Argentine Peso
Offer.
Notes tendered pursuant to the Offers
may be validly withdrawn at any time up to the Withdrawal Date (defined herein),
but, except as provided herein or required by law, after such time may not be
validly withdrawn. The Company may, with respect to either or both Offers,
extend or otherwise amend the Early Tender Date or the Expiration Date, or
increase the Maximum Tender Amount, without extending the Withdrawal Date or
otherwise reinstating withdrawal rights of Holders.
If either or both
Offers are terminated at any time with respect to any or all series of Notes,
the Notes of such series tendered pursuant to such Offer will be promptly
returned to the tendering Holders.
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The
Offers will expire at 11:59 p.m., New York City time, on October 22, 2009
(12:59 a.m. Buenos Aires time, on October 23, 2009), unless extended by
the Company (such date and time, as the same may be extended with respect
to either or both Offers, the “
Expiration
Date
”). In order to receive the Early Tender Premium
(defined below), Holders of Notes must tender their Notes before 5:00
p.m., New York City time (6:00 p.m. Buenos Aires time), on October 7,
2009, unless extended by the Company (such date and time, as the same may
be extended, the “
Early
Tender Date
”). Holders who tender their Notes after the
Early Tender Date will receive only the Tender Offer Consideration. The
Offers are governed by the times and dates referred to herein based on New
York City time. Times and dates based on Buenos Aires time are provided
solely for your convenience.
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Acceptance
Priority Level
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Aggregate
Principal Amount Outstanding
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U.S.
Dollar
Tender Offer
Consideration(1)
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Argentine
Peso
Tender Offer
Consideration(1)(2)
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Early
Tender
Premium(1)(3)
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Total U.S.
Dollar Consideration(1)
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Total Argentine
Peso
Consideration(1)(2)
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8.850%
Conversion Notes due August 2011
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879378AL1
US879378AL14
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1
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US$28,576
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US$1055.00
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US$1071.00
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US$15.00
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US$1070.00
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US$1086.00
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9.125%
Notes due November 2010
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879378AJ6
US879378AJ67
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2
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US$195,507,000
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US$1045.00
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US$1061.00
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US$15.00
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US$1060.00
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US$1076.00
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8.850%
Notes due
August
2011
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879378AK3
US879378AK31
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3
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US$134,644,000
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US$1055.00
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US$1071.00
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US$15.00
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US$1070.00
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US$1086.00
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(1) Per
US$1,000 principal amount of Notes.
(2) Will
be paid in Argentine
pesos
. Payment in Argentine
pesos
will be based on
the Argentine Peso Tender Offer Consideration or Total Argentine Peso
Consideration, as applicable, expressed in U.S. dollars, converted to Argentine
pesos
at the greater of
(a) the Exchange Rate prevailing on the Exchange Rate Date and (b) Argentine
Ps.3.790 per US$1.00.
(3) Will
be payable in U.S. dollars and/or Argentine
pesos
(depending on whether
the Holder validly tenders such Notes in the U.S. Dollar Offer or the Argentine
Peso Offer). Payment in Argentine
pesos
will be based on the
Argentine Peso Tender Offer Consideration or Total Argentine Peso Consideration,
as applicable, expressed in U.S. dollars, converted to Argentine
pesos
at the greater of (a)
the Exchange Rate prevailing on the Exchange Rate Date and (b) Argentine
Ps.3.790 per US$1.00.
The
Dealer
Manager for the Offer is:
Citi
September
24, 2009
Upon the
terms and subject to the conditions of the Offers, the Company will notify The
Bank of New York Mellon (the “
Depositary
”) in writing,
promptly after the Expiration Date, which Notes tendered, if any, are accepted
for purchase and payment pursuant to the Offers.
Notwithstanding
any other provision of the Offers, the Company’s obligation to accept for
purchase, and to pay for, Notes validly tendered pursuant to the Offers (up to
the applicable Maximum Tender Amount) is subject to, and conditioned upon, the
satisfaction of or, where applicable, its waiver with respect to either or both
Offers of the General Conditions (defined herein).
The Offers are not conditioned on any
minimum amount of Notes being tendered and either or both Offers may be amended,
extended, withdrawn or terminated, in whole or in part, with respect to one or
more series of Notes.
The
Company reserves the right, subject to applicable law, with respect to the Notes
and the Offers to:
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·
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accept
for purchase and pay for all Notes validly tendered before the Early
Tender Date or Expiration Date, as applicable, and to keep either or both
Offers open or extend the Early Tender Date or Expiration Date to a later
date and time with respect to one or both series of Notes as announced by
the Company;
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·
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waive
any or all conditions to either or both Offers with respect to one or both
series of Notes;
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·
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terminate
either or both Offers with respect to one or both series of
Notes;
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·
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otherwise
amend either or both Offers in any respect with respect to one or both
series of Notes; or
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·
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delay
accepting any or all series of
Notes.
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None
of the Company, the Depositary, the Luxembourg Tender Agent, the Information
Agent, the Dealer Manager or the trustee with respect to the Notes subject to
the Offers is making any recommendation as to whether Holders should tender
Notes in response to the Offers.
See
“
Terms of the Offers—Risk
Factors
” and “
Material
U.S. Federal Income Tax Considerations
” for a discussion of certain
factors that should be considered in evaluating the Offers.
The
Company expressly reserves the absolute right, in its sole discretion, subject
to applicable law, from time to time to purchase any Notes that remain
outstanding after the Expiration Date through open market purchases or privately
negotiated transactions, one or more additional tender or exchange offers or
otherwise, on terms that may be more or less favorable to Holders of Notes than
the terms of these Offers, or to exercise any of its rights to redeem any series
of Notes under the indenture governing such series of Notes. Any future
purchases by the Company will depend on various factors existing at that time.
There can be no assurance as to which, if any, of these alternatives (or
combinations thereof) the Company will choose to pursue in the
future.
THIS
OFFER TO PURCHASE AND THE ACCOMPANYING LETTER OF TRANSMITTAL SHOULD BE READ
CAREFULLY BEFORE A DECISION IS MADE WITH RESPECT TO THE OFFERS.
IMPORTANT
INFORMATION
Each
series of the Notes is represented by a global certificate registered in the
name of DTC. DTC is the only registered holder of the Notes. DTC facilitates the
clearance and settlement of Notes transactions through electronic book-entry
changes in accounts of DTC participants. DTC participants include securities
brokers and dealers, banks, trust companies, clearing corporations and other
organizations.
A
beneficial owner whose Notes are held by a broker, dealer, commercial bank,
trust company or other nominee and who desires to tender such Notes in the
Offers must contact its nominee and instruct the nominee to tender its Notes on
its behalf.
To
properly tender Notes in either Offer, the Depositary must receive, prior to the
Early Tender Date or Expiration Date, as applicable:
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·
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an
agent’s message through the automated tender offer program (“
ATOP
”) of DTC relating
to the applicable Offer; and
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·
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Holders
participating in the Argentine Peso Offer must hold their Notes through
Euroclear or Clearstream and also deliver a properly completed Letter of
Transmittal according to the procedure for book-entry transfer described
in this Offer to Purchase.
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For more
information regarding the procedures for tendering your Notes, see “
Terms of the Offers—Procedures for
Tendering
.”
The Bank
of New York Mellon (Luxembourg) S.A. is acting as Luxembourg tender agent (the
“
Luxembourg Tender
Agent
”) in connection with the Offers. If you are in Luxembourg, you may
(but are not required to) contact the Luxembourg Tender Agent and ask it to
assist you in tendering Notes according to the procedures described herein. Any
services in connection with the Offers may be performed in Luxembourg, at the
offices of the Luxembourg Tender Agent, where all information and documentation
in connection with the Offers will be available free of charge.
Requests
for additional copies of this Offer to Purchase and requests for assistance
relating to the procedures for tendering Notes may be directed to Global
Bondholders Services Corporation (the “
Information Agent
”) at the
address and telephone number on the back cover of this Offer to Purchase.
Requests for assistance relating to the terms and conditions of the Offers may
be directed to the Dealer Manager at the address and telephone number on the
back cover of this Offer to Purchase. Beneficial owners may also contact their
broker, dealer, commercial bank, trust company or other nominee for assistance
regarding the Offers.
This
Offer to Purchase contains important information that Holders are urged to read
before any decision is made with respect to the Offers.
This
Offer to Purchase does not constitute an offer to purchase Notes in any
jurisdiction in which, or to or from any person to or from whom, it is unlawful
to make such offer or solicitation under applicable securities or blue sky laws.
In those jurisdictions where the securities, blue sky or other laws require the
Offer to be made by a licensed broker or dealer, the Offers will be deemed to be
made on the Company’s behalf by the Dealer Manager or one or more registered
brokers or dealers licensed under the laws of such jurisdiction.
The
delivery of this Offer to Purchase shall not under any circumstances create any
implication that the information contained herein is correct as of any time
subsequent to the date hereof or that there has been no change in the
information set forth herein or in any attachments hereto or in the affairs of
the Company since the date hereof.
No
dealer, salesperson or other person has been authorized to give any information
or to make any representation not contained in this Offer to Purchase, and, if
given or made, such information or representation may not be relied upon as
having been authorized by the Company, the Depositary, the Information Agent,
the Luxembourg Tender Agent, the Dealer Manager or the trustee.
Neither
the Securities and Exchange Commission nor the CNV nor any state securities
commission has approved or disapproved this Offer to Purchase or determined if
this Offer to Purchase is truthful or complete. Any representation to the
contrary is a criminal offense.
You
should carefully consider all of the information contained in this Offer to
Purchase prior to tendering your Notes. In particular, we urge you to
carefully consider the information set forth under “Risk Factors”, including
exchange control risks described therein and other risks and uncertainties
relating to us, our business and tendering the Notes.
Each
of the series of Notes has been issued under the Indenture between the Company
and The Bank of New York Trust Company, N.A., dated as of August 7, 2003 (as so
amended, the “Indenture”).
The
trustee has not independently verified and makes no representation or warranty,
express or implied, and assumes no responsibility, for the accuracy or adequacy
of the information provided in these Offers to Purchase. The trustee will
conclusively rely on the results of these Offers as reported by the Depositary
and us, and the trustee will have no liability in connection with such
information.
United
Kingdom
The
communication of this Offer to Purchase, the Letter of Transmittal and any other
documents or materials relating to the Offers are not being made and such
documents and/or materials have not been approved by an authorized person for
the purposes of section 21 of the Financial Services and Markets Act 2000.
Accordingly, such documents and/or materials are not being distributed to, and
must not be passed on to, the general public, and are only for circulation to
persons falling within Article 43(2) of the Financial Services and Markets Act
2000 (Financial Promotion) Order 2005 (the “
Order
”) or to other persons
to whom it may lawfully be communicated in accordance with the
Order.
Argentina
The
Argentine
Comisión Nacional de
Valores
(“CNV”) authorized the public offering of the Notes in Argentina
through Certificate No. 294 dated July 8, 2003. Such authorization means only
that the information requirements imposed by CNV at such time have been
fulfilled. The CNV has not expressed, and will not express, any opinion in
connection with the information contained in this Offer to
Purchase.
Uruguay
The Notes
issued by the Company are not and will not be registered before the Central Bank
of Uruguay. The Offers in cash to repurchase said Notes constitute a private
placement under Section 2 of Uruguayan law 16,749.
IMPORTANT
DATES
Holders
of Notes should take note of the following dates in connection with the Offers.
The Offers are governed by the times and dates referred to herein based on New
York City time. Times and dates based on Buenos Aires time are provided solely
for your convenience.
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Date
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Calendar
Date and Time
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Event
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Early
Tender
Date
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5:00
p.m., New York City time (6:00 p.m. Buenos Aires time), on October 7,
2009, unless extended or earlier terminated.
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The
last day for Holders to tender Notes to qualify for the payment of the
Total Consideration.
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Withdrawal
Date
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5:00
p.m., New York City time (6:00 p.m. Buenos Aires time), on October 7,
2009, unless extended or earlier terminated.
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The
last day to validly withdraw tenders of Notes. Notes tendered after the
Withdrawal Date may not be withdrawn, except as required by
law.
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Exchange
Rate Date
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12:00
p.m., New York City time (1:00 p.m. Buenos Aires time), on October
20, 2009, unless extended or earlier terminated.
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The
date on which the Exchange Rate will be determined for the purpose of
calculating the price in Argentine
pesos
at which the
Company will purchase Notes from Holders who have validly tendered in the
Argentine Peso Offer. We will announce the applicable exchange rate upon
which payment in Argentine pesos will be based by press release promptly
following the Exchange Rate Date.
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Expiration
Date
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11:59
p.m., New York City time, on October 22, 2009 (12:59 a.m. Buenos Aires
time, on October 23, 2009), unless extended or earlier terminated with
respect to any or all series of the Notes.
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The
last day for Holders to tender Notes to qualify for payment of the Tender
Offer Consideration for Notes tendered after the Early Tender
Date.
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Settlement
Date
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Promptly
after the Expiration Date, expected to be October 27, 2009, provided that
the General Conditions have either been satisfied or, where applicable,
waived, and assuming the Offers are not extended.
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The
Company will, in the case of the U.S. Dollar Offer, deposit with the
Depositary the amount of cash necessary to pay, and the Depositary will
pay, to each Holder whose Notes are accepted for purchase in the U.S.
Dollar Offer the Total U.S. Dollar Offer Consideration or the U.S. Dollar
Tender Offer Consideration, as applicable, plus the applicable accrued and
unpaid interest in respect of such Notes and, in the case of the Argentine
Peso Offer, such payments will be made directly by the Company to the
accounts of Euroclear and/or Clearstream at a financial institution in
Argentina for further credit by Euroclear and/or Clearstream to the
accounts of their participants. See “
Terms of the Offers—Risk
Factors—Holders may be unable to transfer out of Argentina Argentine pesos
received in the Argentine Peso Offer
” for information regarding
Argentine exchange control risk. The Company shall have no obligation to
pay interest by reason of any delay by the Depositary or DTC in making
payments to the Holders in the U.S. Dollar Offer or by Euroclear and/or
Clearstream in the Argentine Peso
Offer.
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TABLE
OF CONTENTS
Page
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Important
Information
|
iv
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Important
Dates
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vi
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Summary
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1
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Telefónica
de Argentina S.A.
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9
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Available
Information
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10
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Documents
Incorporated by Reference
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10
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Forward-Looking
Statements
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11
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Purpose
of the Offers
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11
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Terms
of the Offers
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12
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General
|
12
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Total
Consideration
|
13
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Maximum
Tender Amounts
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13
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Source
and Amount of Funds
|
14
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Conditions
of the Offers
|
14
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Risk
Factors
|
16
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Procedures
for Tendering
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17
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Determination
of Validity
|
21
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Acceptance
of Notes for Purchase; Payment for Notes
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21
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Return
of Unaccepted Notes
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23
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Early
Tender Date; Expiration Date; Extensions; Amendments
|
23
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Withdrawal
Rights
|
24
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No
Appraisal Rights
|
24
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Fees
and Expenses
|
25
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Brokerage
Commissions
|
25
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Transfer
Taxes
|
25
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Certain
U.S. Federal Income Tax Considerations
|
26
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Material
Argentine Tax Considerations
|
28
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Dealer
Manager, Depositary, Luxembourg Tender Agent and Information
Agent
|
32
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Miscellaneous
|
33
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SUMMARY
The
following summary is provided solely for the convenience of
Holders. This summary is not intended to be complete and is qualified
in its entirety by reference to, and should be read in conjunction with, the
information appearing elsewhere or incorporated by reference in this Offer to
Purchase. Each undefined capitalized term used in this Summary has
the meaning set forth elsewhere in this Offer to Purchase. Holders
are urged to read this Statement in its entirety.
|
The
Offeror
|
|
Telefónica
de Argentina S.A., an Argentine
sociedad anónima
(limited liability company
)
|
|
The
Notes
|
|
|
|
|
|
Acceptance
Priority Level
|
|
Aggregate
Principal Amount Outstanding
|
|
|
|
8.850%
Conversion Notes due August 2011
|
|
879378AL1
US879378AL14
|
|
1
|
|
US$28,576
|
|
|
|
|
|
|
|
|
|
|
|
|
|
9.125%
Notes due November 2010
|
|
879378AJ6
US879378AJ67
|
|
2
|
|
US$195,507,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
8.850%
Notes due August 2011
|
|
879378AK3
US879378AK31
|
|
3
|
|
US$134,644,000
|
|
|
|
|
|
The
Offers
|
|
We
are offering to purchase for cash, upon the terms and subject to the
conditions set forth in this Offer to Purchase, the outstanding Notes set
forth above up to the Maximum Tender Amounts at the prices per Note as set
forth on the cover of this Offer to Purchase.
|
|
|
|
|
|
Purpose
of the Offers
|
|
The
purpose of the Offers is to repurchase a portion of the Notes, reduce the
Company’s exposure to fluctuations in the U.S. dollar-Argentine peso
exchange rate and for liability management purposes. The Company intends
to fund the purchase of the Notes pursuant to the Offers with cash on
hand. The Company reserves the right, but shall not be required and
assumes no obligation, to cancel any repurchased Notes.
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|
|
|
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Maximum
Tender Amounts
|
|
The
Company is offering to purchase the Notes for an aggregate purchase price
of up to US$50 million in the U.S. Dollar Offer (the “
Maximum U.S. Dollar Tender
Amount
”), provided that in no event will the aggregate purchase
price of the 2011 Notes purchased by the Company in the U.S. Dollar Offer
exceed US$25 million, and up to Argentine Ps.200 million in the Argentine
Peso Offer (the “
Maximum
Argentine Peso Tender Amount
”) (each a “
Maximum Tender Amount
”
and, together, the “
Maximum Tender
Amounts
”), provided that in no event will the aggregate purchase
price of the 2011 Notes purchased by the Company in the Argentine Peso
Offer exceed Argentine Ps.100 million. Holders of Notes may elect to
tender Notes in either Offer, but will not be able to tender the same
Notes in both Offers. Holders of purchased Notes will receive payment in
U.S. dollars or Argentine
pesos
,
depending on
whether the Holder validly tenders Notes in the U.S. Dollar Offer or the
Argentine Peso Offer, subject to the applicable Maximum Tender Amount.
Payments will be made in Argentine
pesos
in the Argentine
Peso
|
|
|
|
Offer
directly by the Company to the accounts of Euroclear and/or Clearstream at
a financial institution in Argentina for further credit by Euroclear
and/or Clearstream to the accounts of their participants See “
Terms of the Offers—Risk
Factors—Holders may be unable to transfer out of Argentina Argentine pesos
received in the Argentine Peso Offer
” for information regarding
Argentine exchange control risk.
If
the aggregate purchase price of Notes of all series tendered in the U.S.
Dollar Offer exceeds the Maximum U.S. Dollar Tender Amount, then we will
accept for purchase (1) first, all of the Notes with the First Acceptance
Priority Level validly tendered on a pro rata basis (to the extent
necessary), (2) thereafter the Notes with the Second Acceptance Priority
Level validly tendered on a pro rata basis (to the extent necessary) and
(3) thereafter the Notes with the Third Acceptance Priority Level validly
tendered on a pro rata basis (to the extent necessary) (with adjustments
downward to avoid the purchase of Notes in a principal amount other than
multiples of US$1,000) such that the total purchase price payable for the
Notes accepted in the U.S. Dollar Offer does not exceed US$50 million,
provided that in no event will the aggregate purchase price of the 2011
Notes purchased by the Company in the U.S. Dollar Offer exceed US$25
million.
Similarly,
if the aggregate purchase price of Notes of all series tendered in the
Argentine Peso Offer exceeds the Maximum Argentine Peso Tender Amount,
then we will accept for purchase (1) first, all of the Notes with the
First Acceptance Priority Level validly tendered on a pro rata basis (to
the extent necessary), (2) thereafter the Notes with the Second Acceptance
Priority Level validly tendered on a pro rata basis (to the extent
necessary) and (3) thereafter the Notes with the Third Acceptance Priority
Level validly tendered on a pro rata basis (to the extent necessary) (with
adjustments downward to avoid the purchase of Notes in a principal amount
other than multiples of US$1,000) such that the total purchase price
payable for the Notes accepted in the Argentine Peso Offer does not exceed
Argentine Ps.200 million, provided that in no event will the aggregate
purchase price of the 2011 Notes purchased by the Company in the Argentine
Peso Offer exceed Argentine Ps.100 million.
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|
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Expiration
Date
|
|
Each Offer will
expire at 11:59 p.m., New York City time, on October 22, 2009 (12:59 a.m.
Buenos Aires time, on October 23, 2009), unless the Company extends or
earlier terminates either or both Offers.
If a broker,
dealer, commercial bank, trust company or other nominee holds your Notes,
such nominee may have an earlier deadline for accepting the Offers. You
should promptly contact the broker, dealer, commercial bank, trust company
or other nominee that holds your Notes to determine its
deadline.
|
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Early
Tender for the Offers
|
|
Each
Holder validly tendering Notes before the Early Tender Date and whose
Notes are accepted for purchase shall be entitled to receive the Total
U.S. Dollar Consideration and/or the Total Argentine Peso Consideration,
as applicable, which includes the Early Tender Premium, with respect to
the Notes so tendered and accepted for purchase, subject to the terms and
conditions set forth in this Offer to Purchase. A Holder validly tendering
Notes after the Early Tender Date will receive only the U.S. Dollar Tender
Offer Consideration and/or the Argentine Peso Tender Offer Consideration,
as applicable.
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|
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Early
Tender Date
|
|
The
Early Tender Date for each Offer will be at 5:00 p.m., New York City
time (6:00 p.m. Buenos Aires time), on October 7, 2009, unless the Company
extends or earlier terminates either or both Offers.
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Consideration
for the Offers
|
|
Holders
who validly tender their Notes before the Early Tender Date and whose
Notes are accepted for purchase will receive the Total U.S. Dollar
Consideration and/or the Total Argentine Peso Consideration, as
applicable, as described below.
Holders
who validly tender their Notes after the Early Tender Date and whose Notes
are accepted for purchase will receive only the U.S. Dollar Tender Offer
Consideration and/or the Argentine Peso Tender Offer Consideration, as
applicable, as described below.
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|
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U.S.
Dollar Tender Offer Consideration
|
|
The
consideration for each US$1,000 face amount of the 2011 Conversion Notes,
each US$1,000 face amount of the 2010 Notes and each US$1,000 face amount
of the 2011 Notes validly tendered and accepted for purchase in the U.S.
Dollar Offer will be the applicable U.S. Dollar Tender Offer Consideration
set forth in the table on the cover of this Offer to Purchase for each
series of Notes.
|
|
|
|
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Argentine
Peso Tender Offer Consideration
|
|
The
consideration for each US$1,000 face amount of the 2011 Conversion Notes,
each US$1,000 face amount of the 2010 Notes and each US$1,000 face amount
of the 2011 Notes validly tendered and accepted for purchase in the
Argentine Peso Offer will be the applicable Argentine Peso Tender Offer
Consideration set forth in the table on the cover of this Offer to
Purchase for each series of Notes.
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Total
U.S. Dollar Consideration
|
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Total
U.S. Dollar Consideration is the aggregate of the U.S. Dollar Tender Offer
Consideration with respect to each series of Notes plus the Early Tender
Premium for each series of Notes set forth in the table on the cover of
this Offer to Purchase. In the interest of clarity, the Early
Tender Premium is included in the Total U.S. Dollar Consideration and is
NOT paid in addition to the Total U.S. Dollar
Consideration.
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Total
Argentine Peso Consideration
|
|
Total
Argentine Peso Consideration is the aggregate of the Argentine Peso Tender
Offer Consideration with respect to each series of Notes plus the Early
Tender Premium for each series of Notes set forth in the table on the
cover of this Offer to Purchase. In the interest of clarity,
the Early Tender Premium is included in the Total Argentine Peso
Consideration and is NOT paid in addition to the Total Argentine Peso
Consideration.
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|
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Exchange
Rate
|
|
The
applicable U.S. dollar-Argentine
peso
exchange rate will
be the greater of (a) the exchange rate for the purchase of U.S. dollars
prevailing on the Exchange Rate Date as reported by Argentina’s Central
Bank (
tipo de cambio de
referencia
), which can be accessed via:
https://mbrservices.net/emtatest/currate.asp, and (b) Argentine Ps.3.790
per US$1.00. We will announce the applicable exchange rate upon which
payment in Argentine
pesos
will be based by
press release promptly following the Exchange Rate
Date.
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Exchange
Rate Date
|
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12:00
p.m., New York City time (1:00 p.m. Buenos Aires time), on October
20, 2009, unless the Company extends or earlier terminats the Argentine
Peso Offer (the “
Exchange Rate
Date
”).
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Accrued
Interest
|
|
Subject
to the terms and conditions of the Offers, in addition to the Total
Consideration or the Tender Offer Consideration, as applicable, Holders
who validly tender their Notes and whose Notes are accepted for purchase
in the Offers will also be paid the applicable accrued and unpaid interest
from the last interest payment date to, but excluding, the Settlement
Date, payable on the Settlement Date. Any payments of such accrued and
unpaid interest on the Notes will not be made from the applicable Maximum
Tender Amount. Under no circumstances will any interest be payable because
of any delay in the transmission of funds to Holders by the Depositary or
DTC in making payments to the Holders in the U.S. Dollar Offer or by
Euroclear and/or Clearstream in the Argentine Peso Offer. The amount
payable to Holders who validly tender their Notes in the Argentine Peso
Offer on account of such accrued interest will be converted into Argentine
pesos
at the
Exchange Rate and will be paid together with the purchase price for the
Notes accepted by the Company in the Argentine Peso
Offer.
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Settlement
Date
|
|
Each
Offer will settle promptly after its Expiration Date. Assuming
the Offers are not extended, the Company expects that the Settlement Date
for both Offers will be October 27, 2009.
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Acceptance
of Tendered Notes and Payment
|
|
Upon
the terms of the Offers and upon satisfaction or waiver of the conditions
to either or both Offers specified herein under “
Terms of the Offers—Conditions
of the Offers,
” the Company will (a) accept for purchase Notes
validly tendered (or defectively tendered, if the Company has waived such
defect) up to the Maximum Tender Amounts (and subject to possible
proration as described in this Offer to Purchase) with respect to the
Offers, and (b) promptly pay the Total Consideration or Tender Offer
Consideration, as the case may be, (plus the applicable accrued and unpaid
interest), on the Settlement Date for all Notes accepted for
purchase.
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Payment
of the Total Consideration with respect to Notes accepted for purchase in
either Offer that are validly tendered before the applicable Early Tender
Date, and payment of the Tender Offer Consideration with respect to Notes
accepted for purchase in either Offer that are validly tendered after the
applicable Early Tender Date and before the applicable Expiration Date,
will, in each case, be made on the applicable Settlement
Date.
The
Company reserves the right, subject to applicable law, with respect to
either or both Offers to (a) accept for purchase and pay for all
Notes validly tendered before the Early Tender Date or Expiration Date, as
applicable, and to keep the Offers open or extend the Early Tender Date or
Expiration Date to a later date and time with respect to one or more
series of Notes as announced by the Company; (b) waive any or all
conditions to the Offers with respect to one or more series of Notes; (c)
terminate the Offers with respect to one or more series of Notes; or (d)
otherwise amend the Offers in any respect with respect to one or more
series of Notes.
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|
|
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|
|
Conditions
of the Offers
|
|
The
Company’s obligation to accept for purchase, and to pay for, Notes validly
tendered (up to the Maximum Tender Amounts) is subject to, and conditioned
upon, the satisfaction or, where applicable, waiver of the General
Conditions. See “Terms of the Offers—Conditions of the
Offers.” The Offers are not conditioned on any minimum amount
of Notes being tendered. Subject to applicable law, the Company
expressly reserves the right, in its sole discretion, to terminate either
or both Offers at any time with respect to any or all series of
Notes. If either or both Offers are terminated at any time with
respect to any or all series of Notes, the Notes of such series tendered
pursuant to such Offers will be promptly returned to the tendering
Holders.
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How
to Tender Notes
|
|
If
your Notes are registered in the name of a broker, dealer, commercial
bank, trust company or other nominee, you should contact that registered
holder promptly and instruct him, her or it to tender your Notes on your
behalf.
To
properly tender Notes in the U.S. Dollar Offer, the DTC participant
through whom you hold Notes must comply with the ATOP procedures of
DTC.
To
properly tender Notes in the Argentine Peso Offer, you must hold your
Notes through Euroclear or Clearstream and your Euroclear or Clearstream
participant must tender the Notes by (i) delivering “blocking”
instructions (defined herein) to Euroclear or Clearstream in accordance
with the procedures and deadlines specified by Euroclear or Clearstream
prior to the Expiration
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Date
or Early Tender Date, as the case may be, and (ii) completing, singing and
dating the Letter of Transmittal, or a facsimile of the Letter of
Transmittal; and mailing or delivering the Letter of Transmittal or
facsimile thereof (with the original to follow) to the Depositary prior to
the Expiration Date or Early Tender Date, as the case may be.
For
the avoidance of doubt, all payments made in connection with the Argentine
Peso Offer will be made to an account held by Euroclear or Clearstream, as
applicable, with a financial institution in
Argentina. Euroclear or Clearstream, as applicable, will then
credit such funds to their respective participants for further crediting
to the accounts of the beneficial owners whose Notes are validly tendered
and accepted in the Argentine Peso Offer.
Beneficial owners may not be
able to receive the Argentine peso funds resulting from the Argentine Peso
Offer unless they have an account denominated in Argentine pesos in
Argentina. For the avoidance of doubt, payment for Notes tendered in the
Argentine Peso Offer will occur outside of the DTC system.
See
“
Terms of the
Offers—Risk Factors—Holders may be unable to transfer out of Argentina
Argentine pesos received in the Argentine Peso Offer.
”
In
turn, the DTC participants through which Euroclear and/or
Clearstream hold the Notes must:
·
comply
with the ATOP procedures of DTC, and
·
(i)
complete and sign and date the Letter of Transmittal, or a facsimile of
the Letter of Transmittal (with the original to follow); (ii) indicate the
account numbers of Euroclear or Clearsteam, as the case may be, at a
financial institution in Argentina where
the Argentine
pesos
in respect
of any Note, validly tendered and accepted for purchase in the Argentine
Peso Offer can be deposited; (iii) have signatures guaranteed by a member
firm of a registered national securities exchange or of the Financial
Industry Regulatory Authority, Inc., a commercial bank or trust company
having an office or correspondent in the United States, or an “eligible
guarantor institution” within the meaning of Rule 17Ad-15 under the
Exchange Act and (iv) mail or deliver the Letter of Transmittal or
facsimile thereof (with the original to follow) to the Depositary prior to
the Early Tender Date or Expiration Date, as applicable.
To the extent an account number
as described in (ii) above is not provided, the Notes for which the
related account information is lacking will not be purchased and will be
returned.
See
“
Terms of the
Offers—Procedures for Tendering
.” For further information, call the
Depositary or the Dealer Manager or consult your broker, dealer,
commercial bank or trust company for
assistance.
|
|
|
|
If
you are in Luxembourg, you may (but are not required to) contact the
Luxembourg Tender Agent and ask it to assist you in tendering Notes
according to the procedures described herein. Any services in connection
with the Offers may be performed in Luxembourg, at the offices of the
Luxembourg Tender Agent, where all information and documentation in
connection with the Offers will be available free of
charge.
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|
|
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|
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Withdrawal
Rights
|
|
Tenders
of Notes in either Offer may be validly withdrawn at any time up to 5:00
p.m., New York City time (6:00 p.m. Buenos Aires time), on October 7,
2009 (the “
Withdrawal
Date
”) unless the Company extends such date with regard to either
or both Offers but, except as provided herein or required by law, after
such time may not be validly withdrawn.
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|
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Risk
Factors
|
|
See
“
Terms of the
Offers—Risk Factors
” for a discussion of certain factors that
should be considered in evaluating the Offers, including exchange control
risk described under “
Terms of the Offers—Risk
Factors—Holders may be unable to transfer out of Argentina Argentine pesos
received in the Argentine Peso Offer.
”
|
|
|
|
|
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Certain
U.S. Federal Income Tax Considerations
|
|
For
a discussion of certain U.S. federal income tax considerations of the
Offers applicable to U.S. Holders of Notes, see “
Certain U.S. Federal Income
Tax Considerations.
”
|
|
|
|
|
|
Material
Argentine Tax Considerations
|
|
For
a discussion of material Argentine tax considerations of the Offers
applicable to Holders of Notes, see “
Material Argentine Tax
Considerations.
”
|
|
|
|
|
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Untendered
or Unpurchased Notes
|
|
Any
tendered Notes that are not accepted for purchase by the Company will be
returned without expense to their tendering Holder. Notes not tendered or
otherwise not purchased pursuant to the Offers will remain outstanding. If
the Offers are consummated, the aggregate principal amount that remains
publicly held of each series of Notes that is purchased in part in the
Offers will be reduced at that time. This may adversely affect
the liquidity of and, consequently, the market price for the Notes of such
series that remain outstanding after consummation of the
Offers.
|
|
|
|
|
|
Dealer
Manager
|
|
Citigroup
Global Markets Inc. is serving as Dealer Manager in connection with the
Offers. The Dealer Manager’s contact information appears on the
back cover of this Offer to Purchase.
|
|
|
|
|
|
Depositary
|
|
The
Bank of New York Mellon is serving as Depositary in connection with the
Offers.
|
|
|
|
|
|
Information
Agent
|
|
Global
Bondholder Services Corporation is serving as Information Agent in
connection with the Offers. Requests for additional copies of
this Offer to Purchase should be directed to the Information
Agent. Its contact information appears on the
back
cover of this Offer to
Purchase.
|
|
Luxembourg
Tender Agent
|
|
The
Bank of New York Mellon (Luxembourg) S.A. is acting as Luxembourg Tender
Agent in connection with the Offers.
|
|
|
|
|
|
Brokerage
Commissions
|
|
No
brokerage commissions are payable by Holders to the Company, the Dealer
Manager, the Depositary or the Information Agent. If your Notes
are held through a broker or other nominee who tenders the Notes on your
behalf, your broker may charge you a commission for doing
so. You should consult with your broker or nominee to determine
whether any charges will apply. See “
Terms of the
Offers.
”
|
|
|
|
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TELEFÓNICA
DE ARGENTINA S.A.
Telefónica
de Argentina S.A. (referred to herein as the “
Company,
” “
we
” or “
our
”) was incorporated in
Argentina in 1990 as an Argentine
sociedad anónima
(a limited
liability company). Telefónica S.A. indirectly holds approximately
98.0% of our outstanding shares. Our principal executive offices are located at
Avenida Ingeniero Huergo 723 (C1107AOH), Buenos Aires, Argentina, and our
telephone number is (5411) 4332-2066. Our website address is
www.telefonica.com.ar
. Material
contained on our website is not part of and is not incorporated by reference in
this Offer to Purchase.
We have a
non-expiring license to provide telecommunications services throughout
Argentina. We also provide other telephone-related services such as
international long-distance service, data transmission and Internet
service.
We are organized through the following
commercial units
:
|
|
·
|
Corporate
customers—this business unit attends to our approximately 1,000 top
customers, including government offices, and specializes in the
development of integrated and high quality solutions. Our main goal is to
focus on the needs and opportunities of big companies and the customers
and opportunities they offer in terms of service
demand;
|
|
|
·
|
Small
and midsize business customers—this business unit serves approximately
180,000 customers by supplying differential service and hands-on advice,
and promoting growth in small and medium enterprises through value
propositions based on an understanding of customers’ needs, training and
development of new products and services tailored to each specific
need;
|
|
|
·
|
Residential
customers—this business unit represents our traditional business, and is
focused on households, pensioners and public telephones. This unit serves
more than four million lines in
service;
|
|
|
·
|
Wholesale
business—this business unit serves other telecommunication providers, such
as cellular companies, or fixed-line providers, with network access and
facilities. In addition to the necessary interconnection service, the
wholesale business offers optional products and services (such as direct
digital lines, long-distance transmission, broadband links, and IP
traffic).
|
AVAILABLE
INFORMATION
The
Company currently files reports and other information with the SEC in accordance
with the United States Notes Exchange Act of 1934, as amended (the “
Exchange
Act
”). Such reports and other information (including the
documents incorporated by reference into this Offer to Purchase) may be
inspected and copied at the Public Reference Section of the SEC at 100
F Street, NE, Washington, DC 20549. Copies of such material can
also be obtained at prescribed rates from the Public Reference Section of the
SEC at its Washington address. The SEC also maintains a site on the
World Wide Web (http://www.sec.gov) that contains reports, proxy statements and
other information regarding companies like the Company that file electronically
with the SEC.
The
Company is also required to disclose material information to the CNV, which is
made publicly available in Spanish only through the CNV’s website.
Copies of
the materials referred to in the preceding paragraph, as well as copies of this
Offer to Purchase and any current amendment or supplement to the Offers, may
also be obtained from the Information Agent at its address set forth on the back
cover of this Offer to Purchase. If you are in Luxembourg, you may (but are not
required to) contact the Luxembourg Tender Agent and ask it to assist you in
tendering Notes according to the procedures described herein.
DOCUMENTS
INCORPORATED BY REFERENCE
The
following documents filed with the SEC with respect to the Company are
incorporated herein by reference and shall be deemed to be a part
hereof:
|
|
·
|
Annual
Report on Form 20-F for the year ended December 31, 2008;
and
|
|
|
·
|
Current
Reports on Form 6-K filed on April 21, 2009, April 23, 2009, April
27, 2009, May 7, 2009 (both filings), June 1, 2009, June 24, 2009, June
30, 2009, July 7, 2009 (regarding the purchase by the Company’s
controlling shareholder of residual shareholdings in the Company), July
28, 2009, and August 7, 2009.
|
All
documents filed by the Company pursuant to Section 13(a), 13(c), 14 or
15(d) of the Exchange Act after the date of this Offer to Purchase and before
the Expiration Date shall be deemed to be incorporated by reference in and made
a part of this Offer to Purchase from the date of filing such
documents.
Any
statement contained herein or contained in a document incorporated or deemed to
be incorporated by reference herein shall be deemed to be modified or superseded
for purposes of this Offer to Purchase to the extent that a statement contained
herein or in any other subsequently filed document that also is or is deemed to
be incorporated by reference herein modifies or supersedes such
statement.
The
Luxembourg Tender Agent and Information Agent will provide without charge to
each person to whom this Offer to Purchase is delivered upon the request of such
person, a copy of any or all of the documents incorporated herein by reference,
other than exhibits to such documents (unless such exhibits are specifically
incorporated by reference into such documents). Requests for such documents
should be directed to the Luxembourg Tender Agent and Information Agent at their
respective addresses set forth on the back cover of this Offer to
Purchase.
FORWARD-LOOKING
STATEMENTS
Statements
included or incorporated by reference herein may constitute “forward-looking
statements” within the meaning of the Private Notes Litigation Reform Act of
1995. Forward-looking statements are based on expectations,
forecasts, and assumptions by the Company’s management and involve a number of
risks, uncertainties, and other factors that could cause actual results to
differ materially from those stated, including, without limitation, those set
forth in “Item 3D—Risk Factors” of the Company’s Annual Report on Form 20-F for
the year ended December 31, 2008, incorporated herein by
reference.
The
Company cannot be certain that any expectations, forecasts, or assumptions made
by its management in preparing these forward-looking statements will prove
accurate, or that any projections will be realized. It is to be
expected that there may be differences between projected and actual
results. The forward-looking statements speak only as of the date of
their initial issuance, and the Company does not undertake any obligation to
update or revise publicly any forward-looking statements, whether as a result of
new information, future events, or otherwise.
PURPOSE
OF THE OFFERS
The
purpose of the Offers is to repurchase a portion of the Notes, reduce the
Company’s exposure to fluctuations in the U.S. dollar-Argentine
peso
exchange rate and for
liability management purposes. The Company intends to fund the purchase of the
Notes pursuant to the Offers with cash on hand. The Company reserves the right,
but shall not be required and assumes no obligation, to cancel any repurchased
Notes.
TERMS
OF THE OFFERS
General
The
Company is offering to purchase for cash, upon the terms and subject to the
conditions set forth in this Offer to Purchase, the outstanding Notes set forth
on the cover of this Offer to Purchase up to the Maximum Tender Amounts of the
Notes.
The
U.S. Dollar
Tender Offer
Consideration for each US$1,000 face amount of the 2011 Conversion Notes, for
each US$1,000 face amount of the 2010 Notes and for each US$1,000 face amount of
the 2011 Notes if applicable, in accordance with the Acceptance Priority Level,
validly tendered before the Early Tender Date and accepted for purchase will be
the Total U.S. Dollar Consideration, which will be payable on the Settlement
Date. The Total U.S. Dollar Consideration is the U.S. Dollar Tender Offer
Consideration plus the Early Tender Premium for each series of Notes set forth
in the table on the cover of this Offer to Purchase. In the interest
of clarity, the Early Tender Premium is included in the Total U.S. Dollar
Consideration and is NOT paid in addition to the Total U.S. Dollar
Consideration. Holders of Notes tendering after the Early Tender Date, but
before the Expiration Date, will only be eligible to receive the U.S. Dollar
Tender Offer Consideration, which will be payable to such Holders on the
Settlement Date.
The
Argentine Peso
Tender Offer
Consideration for each US$1,000 face amount of the 2011 Conversion Notes, for
each US$1,000 face amount of the 2010 Notes and for each US$1,000 face amount of
the 2011 Notes if applicable, in accordance with the Acceptance Priority Level,
validly tendered before the Early Tender Date and accepted for purchase will be
the Total Argentine Peso Consideration, which will be payable on the Settlement
Date. The Total Argentine Peso Consideration is the Argentine Peso Tender Offer
Consideration plus the Early Tender Premium for each series of Notes set forth
in the table on the cover of this Offer to Purchase. In the interest
of clarity, the Early Tender Premium is included in the Total Argentine Peso
Consideration and is NOT paid in addition to the Total Argentine Peso
Consideration. Holders of Notes tendering after the Early Tender Date, but
before the Expiration Date, will only be eligible to receive the Argentine Peso
Tender Offer Consideration, which will be payable to such Holders on the
Settlement Date.
Holders
of Notes may elect to tender Notes in either Offer, but will not be able to
tender the same Notes in both Offers. All Holders of purchased Notes may elect
to receive payment in U.S. dollars and/or Argentine
pesos
,
depending on whether
the Holder tenders Notes in the U.S. Dollar Offer and/or the Argentine Peso
Offer, subject to the applicable Maximum Tender Amount. Payment in Argentine
pesos
will be based on
the Total
Argentine Peso
Consideration or
Argentine
Peso
Tender Offer Consideration, as applicable, expressed in U.S.
dollars, converted to Argentine
pesos
at the greater of (a)
the Exchange Rate prevailing on the Exchange Rate Date as reported by
Argentina’s Central Bank (
tipo
de cambio de referencia
), which can be accessed via:
https://mbrservices.net/emtatest/currate.asp, and (b) Argentine Ps.3.790 per
US$1.00. We will announce the applicable exchange rate upon which payment in
Argentine pesos will be based by press release promptly following the Exchange
Rate Date. Adjustments to the Exchange Rate will be calculated to the nearest
1/1,000th of an Argentine
peso
, with five
ten-thousandths rounded upward (
e.g.
, 3.8295 would be rounded
up to 3.830).
If a
broker, dealer, commercial bank, trust company or other nominee holds your
Notes, such nominee may have an earlier deadline for accepting the Offers. You
should promptly contact the broker, dealer, commercial bank, trust company or
other nominee that holds your Notes to determine its deadline.
Upon the
terms and subject to the conditions of the Offers, in addition to the Total
Consideration or the Tender Offer Consideration, as applicable, Holders who
validly tender their Notes in the Offers and whose Notes are accepted for
purchase will also be paid the applicable accrued and unpaid interest from the
last interest payment date to, but excluding, the Settlement Date payable on the
Settlement Date in the applicable Offer currency. Any payments of
such accrued and unpaid interest on the Notes will not be made from the
applicable Maximum Tender Amount. Under no circumstances will any interest be
payable because of any delay in the transmission of funds to Holders by the
Depositary or DTC in making payments to the Holders in the U.S. Dollar Offer or
by Euroclear and/or Clearstream in the Argentine Peso Offer. The amount payable
to Holders who validly tender their Notes in the Argentine Peso Offer on account
of such accrued interest will be converted into Argentine
pesos
at the greater of
(a) the
Exchange Rate prevailing on the Exchange Rate Date and (b) Argentine Ps.3.790
per US$1.00 and will be paid together with the purchase price for the Notes
accepted by the Company in such Offer.
Notes
that are validly tendered before the Expiration Date may be subject to proration
or may not be purchased at all. The purchase of any Notes by the
Company will be made in accordance with the Acceptance Priority Level for such
Notes, subject to the availability of U.S. dollars or Argentine
pesos
with respect to the
applicable Maximum Tender Amount.
For more information
regarding possible proration of the Offers with respect to a particular series
of Notes or the election to receive payment in U.S. dollars or Argentine
pesos
, please see “—Maximum Tender
Amounts” below.
Notes
tendered pursuant to the Offers may be validly withdrawn at any time up to the
Withdrawal Date but, except as provided herein or required by law, after such
time may not be validly withdrawn. The Company may, with respect to either or
both Offers, extend or otherwise amend the Early Tender Date or the Offer
Expiration Date, or increase the Maximum Tender Amounts, without extending the
Withdrawal Date or otherwise reinstating withdrawal rights of
Holders. If either or both Offers are terminated at any time with
respect to any or all series of Notes, the Notes of such series tendered
pursuant to such Offer will be promptly returned to the tendering
Holders.
Total
Consideration
The U.S. Dollar Tender
Offer Consideration and Argentine Peso Tender Offer Consideration for each
US$1,000 face amount of the 2011 Conversion Notes, each US$1,000 face amount of
the 2010 Notes and each US$1,000 face amount of the 2011 Notes tendered and
accepted for purchase will be determined by reference to the applicable U.S.
Dollar Tender Offer Consideration and Argentine Peso Tender Offer Consideration
set forth in the table on the cover of this Offer to Purchase for each series of
Notes. The Total U.S. Dollar Consideration will be the U.S. Dollar
Tender Offer Consideration plus the Early Tender Premium for each series of
Notes set forth in the table on the cover of this Offer to Purchase. The
Total Argentine Peso Consideration will be the Argentine Peso Tender Offer
Consideration plus the Early Tender Premium for each series of Notes set forth
in the table on the cover of this Offer to Purchase. Holders of purchased Notes
may elect to receive the applicable Tender Offer Consideration and the
applicable Early Tender Premium in U.S. dollars or Argentine
pesos
, depending on whether the Holder tenders
such Notes in the U.S. Dollar Offer or the Argentine Peso Offer.
Maximum
Tender Amounts
The
amount of each series of Notes that is purchased in the Offers will be based on
the applicable Acceptance Priority Level, subject to the Maximum Tender Amounts.
See the front cover of this Offer to Purchase for details of the Maximum Tender
Amounts and the Acceptance Priority Levels.
If the
aggregate purchase price of Notes of all series tendered in the U.S. Dollar
Offer exceeds the Maximum U.S. Dollar Tender Amount, then we will accept for
purchase (1) first, all of the Notes with the First Acceptance Priority Level
validly tendered on a pro rata basis (to the extent necessary), (2) thereafter
the Notes with the Second Acceptance Priority Level validly tendered on a pro
rata basis
(to the extent
necessary)
and (3) thereafter the Notes with the Third Acceptance
Priority Level validly tendered on a pro rata basis
(to the extent necessary)
such
that the total purchase price payable for the Notes accepted does not exceed
US$50 million, provided that in no event will the aggregate purchase price of
the 2011 Notes purchased by the Company exceed US$25 million.
If there
are sufficient remaining U.S. Dollar funds to purchase some, but not all of the
Notes of a series of an applicable Acceptance Priority Level, the amount of
Notes purchased in that series will be prorated based on the aggregate purchase
price of Notes of that series validly tendered and not withdrawn in the U.S.
Dollar Offer. In determining proration for any series, that portion of the
Holder’s tendered Notes that will be accepted will be equal to the total amount
of such tendered Notes multiplied by a fraction, the numerator of which would be
equal to the amount of the Maximum U.S. Dollar Tender Amount remaining available
for application to the U.S. Dollar Offer and the denominator of which would be
equal to the aggregate principal amount of such series of Notes tendered in the
U.S. Dollar Offer, rounded downward to the nearest US$1,000 principal
amount.
Similarly,
if the aggregate purchase price of Notes of all series tendered in the Argentine
Peso Offer exceeds the Maximum Argentine Peso Tender Amount, then we will accept
for purchase (1) first, all of the Notes with the First Acceptance Priority
Level validly tendered on a pro rata basis (to the extent necessary), (2)
thereafter the Notes with the Second Acceptance Priority Level validly tendered
on a pro rata basis
(to the
extent necessary)
and (3) thereafter the Notes with the Third Acceptance
Priority Level validly tendered on a pro rata basis
(to the extent necessary)
such
that the total purchase price payable for the Notes accepted does not exceed
Argentine Ps.200 million, provided that in no event will the aggregate purchase
price of the 2011 Notes purchased by the Company exceed Argentine Ps.100
million.
If there
are sufficient remaining Argentine
peso
funds to purchase some,
but not all of the Notes of a series of an applicable Acceptance Priority Level,
the amount of Notes purchased in that series will be prorated based on the
aggregate purchase price of Notes of that series validly tendered and not
withdrawn in the Argentine Peso Offer. In determining proration for any series,
that portion of the Holder’s tendered Notes that will be accepted will be equal
to the total amount of such tendered Notes multiplied by a fraction, the
numerator of which would be equal to the amount of the Maximum Argentine Peso
Tender Amount remaining available for application to the Argentine Peso Offer
and the denominator of which would be equal to the aggregate principal amount of
such series of Notes tendered in the Argentine Peso Offer, rounded downward to
the nearest US$1,000 principal amount.
The
Offers are not conditioned upon any minimum level of participation. The Company
will not be able to definitively determine whether the Offers are oversubscribed
or what the effects of proration may be until after the Expiration Date has
passed. If proration of a series of tendered Notes is required, the Company or
the Depositary will determine the final proration factor as soon as practicable
after the Expiration Date and will announce the results of proration by press
release.
In
addition, the Company may from time to time purchase any Notes that remain
outstanding after the Expiration Date through open market purchases or privately
negotiated transactions, one or more additional tender or exchange offers or
otherwise, on terms that may or may not be equal to the Tender Offer
Consideration or exercise any of their rights under the indentures under which
such Notes were issued.
Source
and Amount of Funds
The
Company is offering to purchase for cash, upon the terms and subject to the
conditions set forth in this Offer to Purchase, up to the Maximum Tender Amounts
of the outstanding Notes. See “
—Maximum Tender
Amounts.
” The Company expects to fund its purchase of the
Notes pursuant to the Offers from its cash on hand.
Conditions
of the Offers
Notwithstanding
any other provision of the Offers, the Company will not be obligated to accept
for purchase, and pay for, validly tendered Notes of any series pursuant to the
Offers if the General Conditions (as defined below) have not been satisfied with
respect to such series of Notes. The Offers are not conditioned upon
any minimum amount of Notes being tendered. The purchase of any series of Notes
is not conditioned upon the purchase of any other series of Notes, subject to
the Acceptance Priority Levels.
For
purposes of the foregoing provisions, all of the “General Conditions” shall be
deemed to have been satisfied on the Expiration Date, unless any of the
following conditions shall have occurred and be continuing on or after the date
of this Offer to Purchase and before the Expiration Date with respect to any
series of Notes:
(i) any
general suspension of trading in, or limitation on prices for, United States or
Argentine securities or financial markets or suspension of settlement procedures
at DTC, Euroclear or Clearstream, (ii) a material impairment in the trading
market for debt or asset-backed securities in the United States or Argentina,
(iii) a declaration of a banking moratorium or any suspension of payments
in respect of banks in the United States or Argentina (whether or not
mandatory), (iv) any limitation (whether or not mandatory) by any governmental
authority on, or other event having a reasonable likelihood of affecting, the
extension of credit by banks or other lending institutions in the United States
or Argentina, (v) any attack on, outbreak or escalation of hostilities or acts
of terrorism
involving
the United States or Argentina that would reasonably be expected to have a
materially adverse effect on the Company’s business, operations, properties,
condition (financial or otherwise), assets, liabilities or prospects, (vi) the
exchange rate for U.S. dollars to Argentine
pesos
as reported by
Argentina’s Central Bank (
tipo
de cambio de referencia
), which can be accessed via:
https://mbrservices.net/emtatest/currate.asp, shall increase or decrease by more
than 10% at any point in the period from the close of business on the date prior
to the date of this Offer to Purchase to the Expiration Date, (vii) any decline
in the Standard & Poor’s Index of 500 Industrial Companies by an amount in
excess of 10% at any point in the period from the close of business on the date
prior to the date of this Offer to Purchase to the Expiration Date, (viii) any
decline in the Buenos Aires Stock Exchange’s total market capitalization by an
amount in excess of 10% at any point in the period from the close of business on
the date prior to the date of this Offer to Purchase to the Expiration Date,
(ix) any change in tax laws in the United States, Argentina or otherwise that
might impair or make it difficult for the Company to purchase the Notes or (x)
any significant adverse change in the United States or Argentine securities or
financial markets generally or in the case of any of the foregoing existing on
the date hereof, a material acceleration or worsening thereof;
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the
existence of an order, statute, rule, regulation, executive order, stay,
decree, judgment or injunction that shall have been enacted, entered,
issued, promulgated, enforced or deemed applicable by any court or
governmental, regulatory or administrative agency or instrumentality that,
in the Company’s judgment, would or would be reasonably likely to
prohibit, prevent or materially restrict or delay consummation of the
Offers or that is, or is reasonably likely to be, materially adverse to
the business, operations, properties, condition (financial or otherwise),
assets, liabilities or prospects of the
Company;
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there
shall have been instituted, threatened or be pending any action or
proceeding before or by any court, governmental, regulatory or
administrative agency or instrumentality, or by any other person, in
connection with the Offers, that is, or is reasonably likely to be, in the
judgment of the Company, materially adverse to the business, operations,
properties, condition (financial or otherwise), assets, liabilities or
prospects of the Company, or which would or might, in the Company’s
judgment, directly or indirectly prohibit, prevent, restrict or delay
consummation of the Offers or otherwise adversely affect the Offers in any
material manner;
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there
exists any other actual or threatened legal impediment or restriction to
the Offers or any other circumstances that would materially adversely
affect the transactions contemplated by the Offers, or the contemplated
benefits of the Offers to the
Company;
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at
any time on or after the date of this Offer to Purchase, any change (or
any condition, event or development involving a prospective change) shall
have occurred or been threatened in the business, properties, assets,
liabilities, capitalization, stockholders’ equity, condition (financial or
otherwise), operations, licenses, franchises, permits, permit
applications, results of operations or prospects of the Company, which, in
its reasonable judgment, is or may be materially adverse, or it will have
become aware of any fact which, in its reasonable judgment, has or may
have material adverse significance with respect to the Company, including
without limitation a significant deterioration in the Company’s cash
position or non-compliance or breach by the Company with any covenant
under existing contracts or instruments or a default
thereunder;
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an
event or events or the likely occurrence of an event or events that would
or might reasonably be expected to prohibit, restrict or delay the
consummation of the Offers or materially impair the contemplated benefits
to the Company of the Offers; or
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the
trustee objects in any respect to, or takes any action that would be
reasonably likely to materially and adversely affect, the consummation of
the Offers, or takes any action that challenges the validity or
effectiveness of the procedures used by the Company in the making of the
Offers or in the acceptance of
Notes.
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The
conditions described above are solely for the Company’s benefit and may be
asserted by the Company with respect to either or both Offers regardless of the
circumstances giving rise to any such condition, including any action or
inaction by the Company, and may be waived by the Company, in whole or in part,
at any time and from time to time before the Settlement Date. The
Company’s failure at any time to exercise any of its rights will not be deemed a
waiver of any other right, and each right will be deemed an ongoing right which
may be asserted at any time and from time to time. The Company does not intend
to grant withdrawal rights in the event that it waives any
condition.
Subject
to applicable law, the Company expressly reserves the right, in its sole
discretion, to terminate either or both Offers at any time with respect to any
or all series of Notes. If the Company terminates either or both
Offers with respect to the Notes in whole or in part, it will give immediate
notice to the Depositary, and Luxembourg Tender Agent, the Information Agent,
and all of the Notes theretofore tendered pursuant to such Offer and not
accepted for purchase will be returned promptly to the tendering Holders
thereof.
Risk
Factors
In
deciding whether to participate in the Offers, each Holder should consider
carefully, in addition to the other information contained in and incorporated by
reference in this Offer to Purchase, the following risk factors, as well as
those set forth in forth in “Item 3D—Risk Factors” of the Company’s Annual
Report on Form 20-F for the year ended December 31, 2008, incorporated
herein by reference.
Holders
may be unable to transfer out of Argentina Argentine pesos received in the
Argentine Peso Offer
.
Argentina
has exchange controls and transfer restrictions substantially limiting the
ability to convert Argentine
pesos
into U.S. dollars or
other foreign currency and transfer foreign currency abroad. For example,
Argentine residents are not allowed to purchase more than US$2,000,000 per
calendar month and transfer such amount abroad for investment purposes, among
others, without the Argentine Central Bank’s authorization. Non-Argentine
residents are only allowed to purchase up to US$5,000 per calendar month of
foreign currency with Argentine
pesos
and may only transfer
abroad up to US$5,000 per calendar month without the Argentine Central Bank’s
authorization, except in certain circumstances, including the repatriation of
portfolio investments derived from a previous transfer of U.S. dollars into
Argentina if such investments have been maintained in Argentina for at least 365
days, in which case non-Argentine residents may transfer abroad up to US$500,000
per calendar month without the Argentine Central Bank’s authorization.
Consequently, a Holder receiving Argentine
pesos
in an Argentine account
in connection with the Argentine Peso Offer may experience difficulties in
converting, or may not be able to convert, such Argentine
pesos
into U.S. dollars and
transfer them abroad. It is extremely difficult to obtain an
authorization from the Argentine Central Bank to purchase and transfer foreign
currency abroad over the applicable limits. In addition, Argentina may tighten
exchange controls or transfer restrictions in the future, which would further
limit Holders' ability to transfer such funds abroad.
The
Argentine Central Bank and the
Comisión Nacional de Valores
have also adopted regulations that restrict the transfer of securities
from the Argentine clearing systems. Thus, Holders who validly tender Notes in
the Argentine Peso Offer and invest the proceeds in securities may be restricted
in their ability to transfer those securities to accounts outside
Argentina.
Limited
trading market for the Notes.
To the
extent that Notes are tendered and accepted for purchase pursuant to the Offers,
the trading market for Notes subject to the Offers that remain outstanding is
likely to be more limited.
A debt
security with a smaller outstanding principal amount available for trading (a
smaller ‘‘float’’) may command a lower price than would a comparable debt
security with a larger float. Therefore, the market price for Notes that are not
tendered and accepted for purchase pursuant to the Offers may be affected
adversely to the extent that the principal amount of Notes of such series
purchased pursuant to the Offers reduces the float. A reduced float may also
increase the volatility of the trading prices of Notes that are not purchased in
the Offers.
The Notes
may be acquired by the Company other
than through the Offers in the future.
From time
to time in the future, the Company may acquire Notes that are not tendered and
accepted for purchase in the Offers through open market purchases, privately
negotiated transactions, tender offers, exchange offers or otherwise, upon such
terms and at such prices as the Company may determine, which may be more or less
than the price to be paid pursuant to the Offers and could be for cash or other
consideration. Alternatively, the Company may, subject to certain conditions,
redeem any or all of the Notes not purchased pursuant to the Offers at any time
that the Company is permitted to do so under the respective indentures governing
the Notes. There can be no assurance as to which, if any, of these alternatives
(or combinations thereof) the Company will choose to pursue in the
future.
Exchange
rate risk relating to the Argentine Peso Offer.
Payment
for Notes accepted for purchase by the Company pursuant to the Argentine Peso
Offer will be based on the Total Argentine Peso Consideration or Argentine Peso
Tender Offer Consideration, as applicable, expressed in U.S. dollars, converted
to Argentine
pesos
at
the greater of (a) the Exchange Rate prevailing on the Exchange Rate Date and
(b) Argentine Ps.3.790 per US$1.00. Because payment for such Notes will not
occur until the Settlement Date, Holders who have tendered Notes accepted for
purchase by the Company pursuant to the Argentine Peso Offer will bear the risk
of any exchange rate fluctuations during the period between the Exchange Rate
Date and the Settlement Date.
Procedures
for Tendering
Each
series of the outstanding Notes is represented by a global certificate
registered in the name of DTC. DTC is the only registered holder of the Notes.
DTC facilitates the clearance and settlement of transactions through electronic
book-entry changes in accounts of DTC participants. DTC participants include
securities brokers and dealers, banks, trust companies, clearing corporations
and other organizations. Persons that are not DTC participants beneficially own
the Notes only through DTC participants. For the avoidance of doubt, Euroclear
and Clearstream are not registered holders of Notes and hold Notes through DTC
participants as well.
U.S.
Dollar Offer
How
to tender in the U.S. Dollar Offer if you are a beneficial owner but not a DTC
participant.
If you
beneficially own Notes through an account maintained by a broker, dealer,
commercial bank, trust company or other DTC participant and you desire to tender
Notes, you should contact your DTC participant promptly and instruct it to
tender your Notes on your behalf.
How
to tender in the U.S. Dollar Offer if you are a DTC participant.
To
participate in the U.S. Dollar Offer, a DTC participant must comply with the
ATOP procedures of DTC described below.
In
addition, the Depositary must receive, prior to the Early Tender Date or
Expiration Date, as applicable, a properly transmitted agent’s message, as
described in “
—Tendering
through DTC’s ATOP
” below.
The
method of delivery of all required documents to the Depositary is at your
election and risk.
Tendering
through DTC’s ATOP.
The
Depositary and DTC have confirmed that any financial institution that is a
participant in DTC’s system may use DTC’s ATOP to tender in the U.S. Dollar
Offer. DTC participants may do so by causing DTC to transfer the Notes to the
Depositary in accordance with its procedures for transfer. DTC will then send an
agent’s message to the Depositary.
The term
“agent’s message” means a message transmitted by DTC, received by the Depositary
and forming part of the book-entry confirmation, to the effect
that:
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DTC
has received an express acknowledgment from a DTC participant in ATOP that
it is tendering Notes in the U.S. Dollar Offer that are the subject of
such book-entry confirmation;
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such
DTC participant has received and agrees to be bound by the terms of this
Offer to Purchase, including the representations and warranties set forth
under “—
Representations
and Acknowledgments by Holders
”;
and
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the
terms of this Offer to Purchase may be enforced against such DTC
participant.
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Argentine
Peso Offer
For
the avoidance of doubt, you may not participate in the Argentine Peso Offer
unless you beneficially own Notes held through a Euroclear or Clearstream
participant.
How
to tender in the Argentine Peso Offer if you are a beneficial owner but not a
Euroclear or Clearstream participant.
If you
beneficially own Notes through an account maintained by a broker, dealer,
commercial bank, trust company or other Euroclear or Clearstream participant and
you desire to tender Notes, you should contact your Euroclear or Clearstream
participant promptly and instruct it to tender your Notes on your
behalf. If you hold your Notes through a custodian, you may not
tender your Notes directly. You should contact that custodian to tender your
Notes on your behalf.
If
you validly tender Notes in the Argentine Peso Offer and the Company accepts
your Notes in whole or in part, you will receive payment of the purchase price
in Argentine pesos in Argentina and may be subject to limitations in
transferring those funds out of Argentina. See “
—Risk Factors—Holders may be unable
to transfer out of Argentina Argentine pesos received in the Argentine Peso
Offer.
”
How
to tender in the Argentine Peso Offer if you are a Euroclear or Clearstream
participant.
If you
are a direct participant in Euroclear or Clearstream, as the case may be, you
must tender the Notes by (i) delivering “blocking” instructions (as defined
below), to Euroclear or Clearstream in accordance with the procedures and
deadlines specified by Euroclear or Clearstream prior to the Expiration Date or
Early Tender Date, as the case may be, and (ii) completing, singing and dating
the Letter of Transmittal, or a facsimile of the Letter of Transmittal; and
mailing or delivering the Letter of Transmittal or facsimile thereof (with the
original to follow) to the Depositary prior to the Expiration Date or Early
Tender Date, as the case may be.
“Blocking”
instructions means:
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irrevocable
instructions to block any attempt to transfer the Notes on or prior to the
settlement date;
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irrevocable
instructions to debit your account on the settlement date in respect of
all the Notes you tender, or in respect of such lesser portion of your
Notes as are accepted for purchase by the Company, upon receipt of an
instruction by the Depositary to receive your Notes for the Company,
and
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an
irrevocable authorization to disclose, to the Information Agent,
Luxembourg Tender Agent and the Depositary, the identity of the
participant account holder, the details of the blocking instruction
(including confirmation number) and account information relating
thereto;
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subject,
in each case, to the automatic withdrawal of the irrevocable instructions in the
event that the Argentine Peso Offer is terminated by the Company and your right
to withdraw your offer as set forth in the Offer to Purchase.
Your
offer, which includes your “blocking” instructions, must be delivered and
received by Euroclear or Clearstream in accordance with the procedures
established by them and on or prior to the deadlines established by each of
those clearing systems. You are responsible for informing yourself of these
deadlines and for arranging the due and timely delivery of “blocking”
instructions to Euroclear or Clearstream.
In turn,
the DTC participants through which Euroclear and/or Clearstream hold the Notes
must:
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comply
with the ATOP procedures of DTC described above,
and
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(i)
complete and sign and date the Letter of Transmittal, or a facsimile of
the Letter of Transmittal (with the original to follow); (ii) indicate the
account numbers of Euroclear or Clearsteam, as the case may be, at a
financial institution in Argentina where
the Argentine
pesos
in respect
of any Note, validly tendered and accepted for purchase in the Argentine
Peso Offer can be deposited; (iii) have signatures guaranteed by a member
firm of a registered national securities exchange or of the Financial
Industry Regulatory Authority, Inc., a commercial bank or trust company
having an office or correspondent in the United States, or an “eligible
guarantor institution” within the meaning of Rule 17Ad-15 under the
Exchange Act and (iv) mail or deliver the Letter of Transmittal or
facsimile thereof (with the original to follow) to the Depositary prior to
the Early Tender Date or Expiration Date, as applicable.
To the extent an account number
as described in (ii) above is not provided, the Notes for which the
related account information is lacking will not be purchased and will be
returned.
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To be
validly tendered in the Argentine Peso Offer, the Depositary must receive the
related Letter of Transmittal and other required documents at its address
indicated on the back cover of this Offer to Purchase and the front cover of the
Letter of Transmittal prior to the Early Tender Date or Expiration Date, as
applicable. If you are located in Luxembourg, you may tender Notes by signing
and returning the Letter of Transmittal to the Luxembourg Tender Agent, with a
copy to the Depositary.
For the
avoidance of doubt, all payments made in connection with the Argentine Peso
Offer will be made to an account held by Euroclear or Clearstream, as
applicable, with a financial institution in Argentina. Euroclear or
Clearstream, as applicable, will then credit such funds to their respective
participants for further crediting to the accounts of the beneficial owners
whose Notes are validly tendered and accepted in the Argentine Peso Offer.
Beneficial owners may not be able to
receive the Argentine peso funds resulting from the Argentine Peso Offer unless
they have an account denominated in Argentine pesos in Argentina. For the
avoidance of doubt, payment for Notes tendered in the Argentine Peso Offer will
occur outside of the DTC system.
See “
Terms of the Offers—Risk
Factors—Holders may be unable to transfer out of Argentina Argentine pesos
received in the Argentine Peso Offer.
”
Deadlines
The
method of delivery of the Letter of Transmittal and all other required documents
to the Depositary is at your election and risk. Rather than mail these items,
the Company recommends that you use an overnight delivery service. In all cases,
you should allow sufficient time to assure delivery to the Depositary before the
Early Tender Date or Expiration Date, as applicable. You should not send the
Letter of Transmittal to the Company.
None of
the Company, the Dealer Manager or the Depositary will be responsible for the
communication of offers by:
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holders
of Notes to the direct participant in DTC, Euroclear or Clearstream
through which they hold Notes; or
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holders
of Notes or the direct participant to the Depositary, DTC, Euroclear or
Clearstream.
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Representations
and Acknowledgments By Holders
By
tendering Notes in the Offers, each Holder participating in the U.S. Dollar
Offer and/or the Argentine Peso Offer represents, agrees and acknowledges to the
Company that:
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The
Holder irrevocably constitutes and appoints the Depositary its true and
lawful agent and attorney-in-fact (with full knowledge that the Depositary
also acts as the agent of the Company) with respect to the tendered Notes,
with full power of substitution to (i) transfer ownership of such Notes on
the account books maintained by DTC together with all accompanying
evidences of transfer and authenticity to, or upon the order of, the
Company and (ii) present such Notes for transfer on the books of the
registrar and receive all benefits and otherwise exercise all rights of
beneficial ownership of such Notes, all in accordance with the terms of
the Offer to Purchase. The power of attorney granted in this paragraph
shall be deemed irrevocable and coupled with an
interest.
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The
Holder acknowledges and agrees that a tender of Notes pursuant to any of
the procedures described in the Offer to Purchase and in the instructions
hereto and an acceptance of such Notes by the Company will constitute a
binding agreement between the Holder and the Company upon the terms and
subject to the conditions of the Offer to Purchase. For purposes of the
Offer to Purchase, the Holder understands that the Company will be deemed
to have accepted for purchase validly tendered Notes if, as and when the
Company gives written notice thereof to the
Depositary.
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The
Holder understands that Notes tendered prior to the Withdrawal Date may be
withdrawn by written notice of withdrawal (or a properly transmitted
“Request Message” through ATOP) received by the Depositary at any time
prior to the Withdrawal Date, but not thereafter, unless the applicable
Offer is terminated without any Notes being purchased thereunder. Notes
tendered after the Withdrawal Date may not be withdrawn. If the Company
increases the Maximum Tender Amounts, the Company will ensure that the
applicable Offer remains open for ten business days thereafter; however,
the Company will not be required to extend the Withdrawal Date or
reinstate withdrawal rights in connection with any increase of the Maximum
Tender Amounts. The Company may extend or otherwise amend the Early Tender
Date or the Expiration Date with respect to any series of Notes in either
or both Offers without extending the Withdrawal Date or otherwise
reinstating withdrawal rights of
Holders.
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The
Holder hereby represents and warrants that the Holder has full power and
authority to tender, sell, assign and transfer the Notes tendered hereby
and when such tendered Notes are accepted for purchase and paid for by the
Company pursuant to the applicable Offer, the Company will acquire good
title thereto, free and clear of all liens, restrictions, charges and
encumbrances and not subject to any adverse claim or right. The Holder
will, upon request, execute and deliver any additional documents deemed by
the Depositary or by the Company to be necessary or desirable to complete
the sale, assignment and transfer of the tendered
Notes.
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The
Holder shall indemnify and hold harmless each of the Company and the
Depositary (each, an “Indemnified Party”) against any losses, claims,
damages or liabilities, joint or several, to which any Indemnified Party
may become subject, insofar as such losses, claims, damages or liabilities
(or actions in respect thereof) arise out of or are based upon a breach of
the foregoing representations and warranties and will reimburse any
Indemnified Party for any legal or other expenses reasonably incurred by
such Indemnified Party in connection with investigating or defending any
such action or claim as such expenses are
incurred.
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Notwithstanding
any other provision of the Offer to Purchase, the Holder understands that
the Company’s obligation to accept for purchase, and to pay for, the Notes
validly tendered pursuant to the Offers (up to the applicable Maximum
Tender Amount) is subject to, and conditioned upon, the satisfaction of
or, where applicable, its waiver of the General Conditions. The
undersigned understands that the Offers are not conditioned on any minimum
amount of Notes being tendered and either or both Offers may be amended,
extended, withdrawn or terminated in whole or in part, with respect to one
or more Series of Notes.
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Further,
each Holder participating in the Argentine Peso Offer also represents, agrees
and acknowledges that:
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The
Holder, on its behalf and on behalf of the beneficial owners for whom it
is tendering Notes, has agreed to accept payment in Argentine pesos in
Argentina at the account of Euroclear or Clearstream, as applicable, and
has read and understands the exchange control risk described in “
—Risk Factors—Holders may be
unable to transfer out of Argentina Argentine pesos received in the
Argentine Peso Offer
.”
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The
Holder acknowledges and agrees that the delivery and surrender of the
Notes is not effective, and the risk of loss of the Notes does not pass to
the Depositary, until receipt by the Depositary of a physical copy of the
Letter of Transmittal together with all accompanying evidences of
authority and any other required documents in form satisfactory to the
Company. All questions as to the form of all documents and the
validity (including time of receipt) and acceptance of tenders of Notes
will be determined by the Company, in its sole discretion, which
determination shall be final and
binding.
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Determination
of Validity
The
Company will determine in the Company’s sole discretion all questions as to the
validity, form, eligibility, including time of receipt, and acceptance of
tendered Notes. The Company reserves the absolute right to reject any and all
Notes not validly tendered or any Notes whose acceptance by the Company would,
in the opinion of the Company’s counsel, be unlawful. The Company also reserves
the right to waive any defects or irregularities either before or after the
Expiration Date. The Company’s interpretation of the terms and conditions of the
Offers, including the instructions in the Letter of Transmittal, will be final
and binding on all parties. Unless waived, any defects or irregularities in
connection with tenders of Notes must be cured within a time period that the
Company will determine. Neither the Company, the Depositary, the Luxembourg
Tender Agent nor any other person will have any duty to give notification of any
defects or irregularities nor will any of them incur any liability for failure
to give such notification. Tenders of Notes will not be considered to have been
made until any defects or irregularities have been cured or waived. Any Notes
received by the Depositary that are not validly tendered and as to which the
defects or irregularities have not been cured or waived will be returned by the
Depositary to the tendering owners, via the facilities of DTC, as soon as
practicable following the Expiration Date.
Acceptance
of Notes for Purchase; Payment for Notes
On the
Settlement Date, the Depositary will tender to the Company the aggregate
principal amount of Notes tendered for purchase in the Offers whereupon the
Company will deliver (i) to the Depositary for delivery to tendering Holders of
the Notes, in the case of the U.S. Dollar Offer, the amount of cash necessary to
pay to each Holder whose Notes are accepted in such Offer for purchase the Total
U.S. Dollar Consideration or U.S. Dollar Tender Offer Consideration, as
applicable, plus the applicable accrued and unpaid interest from the last
interest payment date to, but excluding, the Settlement Date in respect of such
Notes, and (ii) directly to the accounts of Euroclear and Clearstream at a
financial institution in Argentina the amount of cash necessary to pay the Total
Argentine Peso Consideration or the Argentine Peso Tender Offer Consideration,
as applicable, for the Notes accepted in Argentine Peso Offer, plus the
applicable accrued and unpaid interest from the last interest payment date to,
but excluding, the Settlement Date in respect of such Notes.
For
purposes of the Offers, the Company will be deemed to have accepted for purchase
validly tendered Notes or defectively tendered Notes with respect to which the
Company has waived such defect, when, as and if the Company gives written notice
of such acceptance to the Depositary.
The
Company will pay for Notes accepted for purchase by the Company pursuant to the
U.S. Dollar Offer by depositing the cash amounts with the Depositary. The
Depositary will act as your agent for the purpose of receiving cash from the
Company and transmitting such cash to you.
In the
case of the U.S. Dollar Offer, payment of cash for Notes accepted for purchase
by the Company pursuant to the U.S. Dollar Offer will be made promptly after the
Expiration Date and will be credited by the Depositary to the appropriate
account at DTC, subject to receipt by the Depositary of:
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timely
confirmation of a book-entry transfer of the Notes into the Depositary’s
account at DTC, pursuant to the procedures set forth in “
— Procedures for
Tendering
” above;
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a
properly transmitted agent’s message;
and
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any
other documents required by this Offer to
Purchase.
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In the
case of the Argentine Peso Offer, payment of cash for Notes accepted for
purchase by the Company pursuant to the Argentine Peso Offer will be made
promptly after the Expiration Date by the Company to the accounts of Euroclear
and/or Clearstream at a financial institution in Argentina for further credit by
Euroclear and/or Clearstream to the accounts of their participants, subject to
receipt by the Depositary of:
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timely
confirmation of a book-entry transfer of the Notes into the Depositary’s
account at DTC, pursuant to the procedures set forth in “
— Procedures for
Tendering
” above;
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a
physical copy of the Letter of Transmittal;
and
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physical
copies of any other documents required by the Letter of
Transmittal.
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In all
cases, tenders of Notes will be accepted only in principal amounts equal to
US$1,000 or integral multiples thereof for each series of Notes set forth in the
table on the cover of this Offer to Purchase.
By
tendering Notes pursuant to the U.S. Dollar Offer, the Holder will be deemed to
have agreed that the delivery and surrender of the Notes is not effective, and
the risk of loss of the Notes does not pass to the Depositary, until receipt by
the Depositary of a properly transmitted agent’s message together with all
accompanying evidences of authority and any other required documents in form
satisfactory to the Company. All questions as to the form of all
documents and the validity (including time of receipt) and acceptance of tenders
of Notes will be determined by the Company, in its sole discretion, which
determination shall be final and binding.
The
Company may transfer or assign, in whole or from time to time in part, to one or
more of its affiliates or any third party the right to purchase all or any of
the Notes tendered pursuant to the Offers, but any such transfer or assignment
will not relieve the Company of its obligations under the Offers and will in no
way prejudice the rights of tendering Holders to receive payment for Notes
validly tendered and accepted for purchase pursuant to the Offers.
If the
aggregate purchase price of Notes of all series tendered in the U.S. Dollar
Offer exceeds the Maximum U.S. Dollar Tender Amount, only US$50 million in
aggregate purchase price of Notes will be accepted for purchase. The Notes
tendered in the U.S. Dollar Offer will be purchased in accordance with, and in
the order of, the Acceptance Priority Levels set forth in the table on the front
cover of this Offer to Purchase. If there are sufficient remaining U.S. dollar
funds to purchase some, but not all of the Notes of a series of an applicable
Acceptance Priority Level, the amount of Notes purchased in that series will be
prorated based on the aggregate principal amount of Notes of that series validly
tendered and not withdrawn in the U.S. Dollar Offer, rounded down to the nearest
integral multiple of US$1,000. In any event, the aggregate purchase price of the
2011 Notes purchased by the Company shall not exceed US$25 million.
If the
aggregate purchase price of Notes of all series tendered in the Argentine Peso
Offer exceeds the Maximum Argentine Peso Tender Amount, only Argentine Ps.$200
million in aggregate purchase price of Notes will be accepted for purchase. The
Notes tendered in the Argentine Peso Offer will be purchased in accordance with,
and in the order of, the Acceptance Priority Levels set forth in the table on
the front cover of this Offer to Purchase. If there are sufficient remaining
Argentine
peso
funds to
purchase some, but not all of the Notes of a series of an applicable Acceptance
Priority Level, the amount of Notes purchased in that series will be prorated
based on the aggregate principal amount of Notes of that series validly tendered
and not withdrawn in the Argentine Peso Offer, rounded down to the nearest
integral multiple of US$1,000. In any event, the aggregate purchase price of the
2011 Notes purchased by the Company shall not exceed Argentine Ps.100 million.
For more information regarding possible proration of the Offers with respect to
a particular series of Notes or the election to receive payment in U.S. dollars
or Argentine
pesos
,
please see “—Maximum Tender Amounts” above.
Holders
of Notes tendered and accepted for purchase pursuant to the Offers will be
entitled to the applicable accrued and unpaid interest on their Notes to, but
excluding, the Settlement Date, payable on the Settlement Date. Under
no circumstances will any additional interest be payable because of any delay by
the Depositary, DTC, Euroclear or Clearstream in the transmission of funds to
the Holders of purchased Notes or otherwise.
If the
Company is delayed in its acceptance for purchase of, or payment for, any Notes
or is unable to accept for purchase or pay for any Notes pursuant to the Offers
for any reason, then, without prejudice to the Company’s rights hereunder, but
subject to applicable law, tendered Notes may be retained by the Depositary on
behalf of the Company (subject to Rule 14e-1 under the Exchange Act, which
requires that the Company pay the consideration offered or return the Notes
deposited by or on behalf of the Holders promptly after the termination or
withdrawal of the Offers).
Tendering
Holders of Notes purchased in the Offers will not be obligated to pay brokerage
commissions or fees to the Dealer Manager, the Depositary or the Company with
respect to the purchase of their Notes. The Company will pay all
other charges and expenses in connection with the Offers. See “—Dealer Manager,
Depositary and Brokerage Commissions.” Any Holder or beneficial owner
that has questions concerning tender procedures should contact the Depositary at
the address and telephone numbers set forth on the back cover of this Offer to
Purchase.
Return
of Unaccepted Notes
Any
tendered Notes that are not accepted for purchase by the Company will be
returned without expense to their tendering Holder. Such non-purchased Notes
will be credited by the Depositary to an account maintained with DTC. These
actions will occur promptly after the expiration or termination of the
Offers.
Early
Tender Date; Expiration Date; Extensions; Amendments
The Early
Tender Date for each Offer is 5:00 p.m., New York City time (6:00 p.m. Buenos
Aires time), on October 7, 2009, unless extended with respect to an Offer, in
which case the Early Tender Date with respect to such Offer will be such date to
which the Early Tender Date is extended. The Expiration Date for each Offer is
11:59 p.m., New York City time, on October 22, 2009 (12:59 a.m. Buenos Aires
time, on October 23, 2009), unless extended with respect to an Offer, in which
case the Expiration Date with respect to such Offer will be such date to which
the Expiration Date is extended. The Company, in its sole discretion,
may extend the Early Tender Date or Expiration Date for an Offer with respect to
any or all series of Notes for any purpose, including to permit the satisfaction
or waiver of all conditions to either or both Offers. To extend the
Early Tender Date or Expiration Date as to a series, or for all series, of
Notes, the Company will notify DTC, and will make a public announcement thereof
before 9:00 a.m., New York City time (10:00 a.m. Buenos Aires time), on the next
business day after the previously scheduled Early Tender Date or Expiration
Date, as applicable. Such announcement will state that the Company is extending
either or both Offers as to such series of Notes for a specified period or on a
daily basis. Without limiting the manner in which the Company may
choose to make a public announcement of any extension, amendment or termination
of either or both Offers, the Company will not be obligated to publish,
advertise or otherwise communicate any such public announcement, other than by
making a timely press release and notice to PR Newswire and to the Argentine
Comisi
ó
n Nacional de Valores
and the
Buenos Aires Stock Exchange.
The
Company expressly reserves the right, subject to applicable law,
to:
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delay
accepting any Notes, to extend the offer period or to terminate either or
both Offers and not accept Notes, as to any or all series of Notes;
and
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amend,
modify or, waive at any time, or from time to time, the terms of either or
both Offers in any respect as to any or all series of Notes, including
waiver of any conditions to consummation of such
Offer.
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If the
Company exercises any such right, the Company will give written notice thereof
to DTC and will make a public announcement thereof as promptly as
practicable.
The
minimum period during which either or both Offers will remain open following
material changes in the terms of either or both Offers or in the information
concerning such Offer will depend upon the facts and circumstances of such
change, including the relative materiality of the changes. With
respect to any material change in consideration or percentage of Notes sought, a
minimum ten business day extension period will be made to allow for adequate
dissemination of such change. If any of the terms of either or both
Offers are amended in a manner determined by the Company to constitute a
material change adversely affecting any Holder, the Company will promptly
disclose any such amendment in a manner reasonably calculated to inform Holders
of such amendment, and the Company will extend such Offer for a time period that
the Company in its sole discretion deems appropriate, depending upon the
significance of the amendment and the manner of disclosure to Holders, if such
Offer would otherwise expire during such time period.
Withdrawal
Rights
Notes
tendered in the Offers may be validly withdrawn up until the Withdrawal Date
but, except as provided herein or required by law, after such time may not be
validly withdrawn. If the Company increases the Maximum Tender Amounts, the
Company will ensure that the Offers remain open for ten business days
thereafter; however, the Company will not be required to extend the Withdrawal
Date or reinstate withdrawal rights in connection with any increase of the
Maximum Tender Amounts. The Company may extend or otherwise amend the Early
Tender Date or the Expiration Date with respect to any series of Notes without
extending the Withdrawal Date or otherwise reinstating withdrawal rights of
Holders.
For a
withdrawal of a tender of Notes to be effective, a written or facsimile
transmission notice of withdrawal must be received by the Depositary prior to
the Withdrawal Date, by mail, fax or hand delivery or by a properly transmitted
‘‘Request Message’’ through ATOP. Any such notice of withdrawal must (a) specify
the name of the person who tendered the Notes to be withdrawn, the name in which
those Notes are registered (or, if tendered by a book-entry transfer, the name
of the participant in DTC whose name appears on the security position listing as
the owner of such Notes), if different from that of the person who deposited the
Notes, (b) contain the description of the Notes to be withdrawn, the certificate
number or numbers of such Notes, unless such Notes were tendered by book-entry
delivery, and the aggregate principal amount represented by such Notes, (c)
unless transmitted through ATOP, be signed by the Holder thereof in the same
manner as the original signature on the Letter of Transmittal, including any
required signature guarantee(s), or be accompanied by documents of transfer
sufficient to have the applicable security registrar register the transfer of
the Notes into the name of the person withdrawing such Notes and (d) if the
Letter of Transmittal was executed by a person other than the registered Holder,
be accompanied by a properly completed irrevocable proxy that authorized such
person to effect such withdrawal on behalf of such Holder.
Euroclear
and Clearstream may impose additional deadlines to process withdrawal
instructions and if you are tendering Notes through Euroclear or Clearstream you
are required to inform yourself of such deadlines.
Withdrawal
of Notes can be accomplished only in accordance with the foregoing
procedures.
Notes
validly withdrawn may thereafter be re-tendered at any time prior to the Early
Tender Date or the Expiration Date, as applicable, by following the procedures
described under ‘‘
—Procedures
for Tendering
’’ above. All questions as to the form and validity
(including time of receipt) of any notice of withdrawal of a tender will be
determined by us, which determination shall be final and binding. None of us,
the Depositary, the Luxembourg Tender Agent, the Dealer Manager, the trustee or
any other person will be under any duty to give notification of any defect or
irregularity in any notice of withdrawal of a tender or incur any liability for
failure to give any such notification.
No
Appraisal Rights
The Notes
are obligations of the Company and are governed by the respective indentures
under which the Notes were issued, each as amended or supplemented to
date. There are no appraisal or other similar statutory rights
available to Holders in connection with the Offers.
Fees
and Expenses
The
Company will bear the fees and expenses of soliciting tenders in this Offer to
Purchase. The Company is making the principal solicitation by mail and overnight
courier. However, where permitted by applicable law, additional solicitations
may be made by facsimile, telephone or in person by the officers and regular
employees of the Company. The Company will also pay the Depositary reasonable
and customary fees for their services and will reimburse them for their
reasonable out-of-pocket expenses. The Company will indemnify the Depositary
against certain liabilities and expenses in connection therewith, including
liabilities under the federal securities laws.
Brokerage
Commissions
You are
not required to pay any brokerage commissions to the Dealer Manager, the
Depositary, the Luxembourg Tender Agent or the Company. If your Notes are held
through a broker or other nominee who tenders Notes on your behalf, your broker
may charge you a commission for doing so. You should consult with your broker or
nominee to determine whether any charges will apply.
Transfer
Taxes
The
Company is not aware of any obligation of Holders who tender their Notes in the
Offers to pay any transfer taxes. However, if transfer tax would apply to the
Offers, then the amount of any transfer taxes, whether imposed on the registered
owner or any other persons, will be payable by the tendering Holder. If
satisfactory evidence of payment of such taxes or exemption from them is not
submitted to the Company by the tendering Holder, the amount of such transfer
taxes will be billed directly to the tendering Holder.
Additionally,
if the payment of the
Total
Consideration or the Tender Offer Consideration, as applicable, is being made to
any person other than the registered Holder of Notes tendered hereby, then the
amount of
any transfer taxes (whether imposed on the registered Holder(s) or such other
person(s)) payable on account of the transfer to such person will be deducted
from the Full Consideration or the Tender Offer Consideration, as the case may
be, unless
satisfactory
evidence of the payment of such taxes or exemption therefrom is
submitted.
CERTAIN
U.S. FEDERAL INCOME TAX CONSIDERATIONS
This
disclosure is limited to the U.S. federal tax issues addressed
herein. Additional issues may exist that are not addressed in this
disclosure and that could affect the U.S. federal tax treatment of the
Offers. This tax disclosure was written in connection with the
promotion or marketing by the Company of the Offers, and it cannot be used by
any Holder for the purpose of avoiding penalties that may be asserted against
the Holder under the Internal Revenue Code of 1986, as amended (the
“Code”). Holders should seek their own advice based on their
particular circumstances from an independent tax advisor.
The
following are certain U.S. federal income tax consequences relating to the sale
of Notes to the Company by U.S. Holders (as defined below) pursuant to the
Offers. This summary is based on the provisions of the Code, U.S.
Treasury regulations promulgated thereunder (the “
Treasury Regulations
”),
judicial authorities and administrative rulings, all as in effect as of the date
hereof and all of which are subject to change, possibly with retroactive
effect. The following applies only to U.S. Holders who hold their
Notes as capital assets.
This
discussion does not describe all of the tax consequences that may be relevant to
a U.S. Holder in light of the U.S. Holder’s particular circumstances or to U.S.
Holders subject to special rules, such as:
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certain
financial institutions;
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dealers
and certain traders in securities, commodities or foreign
currencies;
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persons
who hold Notes as part of a hedge, straddle, or integrated transaction or
similar transaction;
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persons
whose functional currency is not the U.S.
dollar;
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tax-exempt
entities; or
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persons
subject to the alternative minimum
tax.
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If a
partnership or other entity classified as a partnership for U.S. federal income
tax purposes holds a Note, the U.S. federal income tax treatment of a partner
generally will depend on the status of the partner and the activities of the
partnership. Partners in a partnership or other pass-through entity holding
Notes should consult their tax advisors. The effect of any applicable state,
local or foreign tax laws is not discussed.
This
summary of certain U.S. federal income tax consequences is for general
information only and is not tax advice. Holders are urged to consult
their tax advisors with respect to the application of U.S. federal income tax
laws to their particular situations as well as any tax consequences arising
under the laws of any state, local, foreign or other taxing jurisdiction or
under any applicable tax treaty.
Tendering
U.S. Holders
As used
herein, the term “U.S. Holder” of a Note means a beneficial owner of a Note that
is, for U.S. federal income tax purposes:
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an
individual citizen or resident of the United
States,
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a
corporation, or other entity taxable as a corporation, created or
organized in the laws of the United States, any state therein or the
District of Columbia; or
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an
estate or trust the income of which is subject to U.S. federal income
taxation regardless of its source.
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Sale of a Note Pursuant to the
Offers.
The receipt of cash by a U.S. Holder in exchange for a
Note pursuant to the Offers will be a taxable transaction for U.S. federal
income tax purposes. A U.S. Holder tendering a Note will generally
recognize gain or loss in an amount equal to the difference between (i) the
amount of cash received in exchange f
or such Note (other than cash
r
eceived in respect of
accrued but unpaid interest) and (ii) the U.S. Holder
’
s adjusted tax basis in the Note at the
time of sale.
A
U.S. Holder
’
s adjusted tax basis in a Note generally
will be equal to the amount paid for the Note, increased by the
amount
of any market
discount previously included in income with respect to the Note and by any
original issue discount (“
OID”
) previously accrued during the U.S.
Holder
’
s holding period, and reduced (but not
below zero) by the amount of any amortizable bond pr
e
mium previously amortized with respect
to the Note. U.S. Holders who acquired a Note pursuant to the offers
to exchange which commenced in June 2003 (the “
Exchange Offer”
) should refer to the offering documents
related to the Exchange Offer and consult t
h
eir own tax advisors to determine their
adjusted tax basis in the Note.
The amount of any Argentine Pesos
received will be the U.S. dollar value of the Argentine Pesos, determined at the
time of sale. Any gain or loss realiz
ed by a U.S. Holder on a
subseq
uent sale or
disposition of such Argentine Pesos (including its exchange for U.S. dollars)
will be ordinary income or loss.
Any gain or loss recognized on a sale of
a Note pursuant to the Offers will generally be
U.S.
source income for purposes of
comput
ing a U.S.
Holder
’
s foreign tax credit
limitation. Subject to the discussion below under “
Market Discount,”
such gain or loss will generally be
capital gain or loss and will be long-term capital gain or loss if the U.S.
Holder held the Note for more than
one year at the time of such
sale. Long-term capital gains of individuals are generally eligible
for reduced r
ates of
taxation. The deductibility of capital losses is subject to certain
limitations. Amounts received by a U.S. Holder in respect of
accrue
d and unpaid interest
on a Note will generally be taxed as ordinary interest income for
U.S.
federal income tax purposes to the
extent not previously included in income.
Market
Discount
. If a
U.S. Holder's tax basis in a Note is less than its principal am
ount (or, in the case of a Note with
OID, its adjusted issue price), the amount of the difference will be treated as
market discount for U.S. federal income tax purposes, unless this difference is
less than a specified “
de
minimis amount.”
If a U.S. Hold
e
r holds Notes with market discount, any
gain recognized by the U.S. Holder upon the sale of Notes pursuant to the Offers
would be recharacterized as ordinary interest income to the extent of accrued
market discount that had not previously been included as
ordinary income.
Information
Reporting and Backup Withholding.
Payments to a U.S. Holder pursuant to
the Offers may be subject to certain information reporting requirements (unless
the U.S. Holder is a corporation or other exempt recipient). Backup
withh
olding may also apply
to such payments if the U.S. Holder fails to comply with certain identification
requirements. Backup withholding is not an additional tax, but
instead will be allowed as a credit against such U.S. Holder
’
s
U.S.
federal income tax li
a
bility and may entitle the U.S. Holder
to a refund if the U.S. Holder timely furnishes the required information to the
Internal Revenue Service.
Non-Tendering
Holders
A Holder that does not tender its Notes
in the Offers for
U.S.
federal income tax purpose
s or does not have its tender of Notes
accepted for purchase pursuant to the Offers will not recognize any gain or loss
as a result of the Offers.
THE
U.S.
FEDERAL INCOME TAX DISCUSSION SET
FORTH
ABOVE IS INCLUDED FOR GENERAL
INFORMATION PURPOSES ONLY. AL
L HOLDERS ARE ENCOURAGED TO CONSULT
THEIR OWN TAX ADVISORS TO DETERMINE THE
U.S.
FEDERAL, STATE, LOCAL AND FOREIGN TAX
CONSEQUENCES OF THE OFFERS.
MATERIAL
ARGENTINE TAX CONSIDERATIONS
The
following is a summary of certain Argentine tax consequences arising from this
Offer to Purchase. This summary is based upon tax laws in Argentina and
regulations thereunder as in effect on the date of this Offer to Purchase. It is
subject to any subsequent change, possibly on a retroactive basis, in Argentine
law and regulations that may come into effect after such date. No assurance can
be given that the courts or tax authorities responsible for the application and
administration of the laws and regulations described herein will agree with this
interpretation.
Recipients
of the Tender Offer Consideration or the Total Consideration, as the case may
be, which is hereby offered in payment of their Notes, are advised to consult
their tax advisors as to the tax consequences derived from sale of the Notes
under the national and local tax laws of their countries of residence,
including, without limitation, the consequences that may arise from the
ownership, collection of interest, sale, redemption or other disposition of the
Notes.
For
purposes of this section we assume the following:
that the
Notes qualify for their tax exemption pursuant to section 36 of the Argentine
Negotiable Obligations Law No. 23576, as amended (the “
Negotiable Obligations Law
”).
For such purpose, we assume that the Notes were offered in exchange for other
notes (the “
Originally Placed
Notes
”) which qualified for their exemption pursuant to section 36 of the
Negotiable Obligations Law. The conditions that apply to the Originally Placed
Notes for purposes of the tax treatment provided for in such regulation are the
following:
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·
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that
the notes were placed through a public offering authorized by the
CNV;
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·
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that
the proceeds raised from the placement were to be applied by the issuer
to:
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1.
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working
capital in Argentina;
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2.
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investment
in physical assets located in
Argentina;
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3.
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refinancing
of liabilities; and/or
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4.
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payment
of equity contributions to controlled or related companies, the proceeds
of which are to be solely applied as described above;
and
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·
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that
the issuer evidenced to the CNV, at the time, in the manner and upon the
conditions as it determined, that the funds raised from the
public offering were applied as
aforesaid.
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(i)
Offer to Purchase Outstanding Notes for Cash
For
purposes of this sub-section (i), unless otherwise indicated, we assume that the
Notes have been issued in accordance with the provisions of Negotiable
Obligations Law and qualify for tax exempt treatment under section 36 thereof
(the
section 36
conditions
).
Non-Argentine
Holders
This
analysis applies to holders other than Argentine legal entities, individuals
residing or undivided estates located in Argentina (the “Non-Argentine
Holders”). For purposes of this paragraph, Argentine legal entities
means companies subject to the inflation adjustment rules provided for in Title
VI of the Income Tax Law (in general, companies incorporated under the laws of
Argentina, local branches of foreign companies, sole proprietorships and
individuals engaged in certain commercial activities in Argentina).
Income
Tax
Capital
Gains
Non-Argentine
Holders shall not be subject to Income Tax on capital gains in respect of income
derived from the sale or other disposition of the Notes. Even if the conditions
of section 36 are not complied with, Decree 2284/91, as ratified by Law No.
24,307, provides that foreign persons are not subject to the tax on capital
gains derived from the sale or other disposition of securities such as the
Notes.
Interest
Payments
Accrued
and unpaid interest which will be paid to Non-Argentine Holders in addition to
the Tender Offer Consideration or the Total Consideration, as the case may be,
shall be income tax exempted.
Early
Tender Premium
It could
be reasonably construed that the Early Tender Premium is comprised in the quite
broad exemption set forth in the Negotiable Obligations Law (i.e. applicable to
the gains arising from the purchase, sale, exchange, conversion and disposition
of negotiable obligations).
Value
Added Tax
The
issuance, placement, purchase, transfer, payment of principal and/or interest
on, or redemption of, the Notes, are exempted from the Value Added
Tax.
Argentine
Holders
Income
Tax
Argentine
Entities
For
purposes of this paragraph, Argentine Entities means companies subject to the
inflation adjustment rules provided for in Title VI of the Income Tax Law (in
general, companies incorporated under the laws of Argentina, local branches of
foreign companies, sole proprietorships and individuals engaged in certain
commercial activities in Argentina).
Capital
Gains
Any gain
resulting from the tender of the Notes for the Tender Offer Consideration or the
Total Consideration, as the case may be, by Argentine Entities shall be subject
to income tax at a 35% flat rate.
Interest
Payments
A 35%
withholding tax applies upon Interest paid to Argentine Entities except, among
others, when the holder is a financial institution. Such withholding is treated
as a payment on account of the final Income Tax to be paid by the
Holder.
Early
Tender Premium
The gains
arising from the purchase, sale, exchange, conversion and disposition of
negotiable obligations are subject to tax. It could be reasonably construed that
this treatment applies to the Early Tender Premium.
Argentine
Individuals
Capital
Gains - Interest Payments – Early Tender Premium
In
general, any gain derived from the sale or disposition of the Notes as well as
the interest payments under the Notes will be exempt from Income Tax.
It could be reasonably construed that
this treatment applies to the Early Tender Premium.
Value
Added Tax
The
issuance, placement, purchase, transfer, payment of principal and/or interest
on, or redemption of, the Notes, are exempted from the value added
tax.
Turnover
Tax
Investors
who regularly conduct business or are presumed to conduct business in any
jurisdiction in which they receive interest on the Notes or income from the sale
or transfer thereof, may be subject to Turnover Tax at rates which vary
depending on the specific laws of each Argentine province, unless an exemption
applies.
According
to Section 141.1 of the Tax Code of the City of Buenos Aires and Section 180 c)
of the Tax Code of the Province of Buenos Aires income arising from Notes issued
in accordance with the Negotiable Obligations Law (including interest and income
arising from the transfer of the Notes) are exempted, provided that the Income
Tax exemption applies thereto.
In
addition, investors are encouraged to consult with their own tax advisors if,
according to their particular situation in the Turnover Tax, they may be subject
to the Turnover Tax withholding regime applicable to deposits in bank accounts
set forth by different provinces and the City of Buenos Aires.
Other Tax
Considerations.
Tax
on Debits and Credits on Bank Accounts opened in Argentine financial
entities
The Tax
on Debits and Credits on Bank Accounts applies on certain deposits to and
withdrawals from bank accounts opened in Argentine financial entities regulated
by Law No. 21,526 and to other transactions that, due to their special nature
and characteristics, are similar or could be used in lieu of a bank
account. Therefore, any deposit to or withdrawal from a bank account
opened in an entity regulated by the Law No. 21,526, or any transaction deemed
to be used in lieu of a bank account, would be subject to this tax unless a
particular exemption was applicable. The general tax rate is 0.6% on each credit
and withdrawal. Consequently, if any Holder of the Notes receives the
Tender Offer Consideration or the Total Consideration, as the case may be, and
interest payments in an account opened in an Argentine financial entity, all
payments will be subject to a 0.6% tax.
Decree
No. 534/2004 provides that owners of bank accounts subject to the general tax
rate of 0.6% may take into account as a tax credit 34% of the tax originated in
credits on such bank accounts. This amount may be utilized as a credit for the
Income Tax or the Presumptive Minimum Income Tax. The amount computed as a
credit is not deductible for Income Tax purposes. Decree No. 534/2004 also
states that, under certain circumstances, foreign entities may be exempted from
this tax.
Stamp
and Transfer Tax
Under
Section 35 of the Negotiable Obligations Law and also under the current
legislation of the City of Buenos Aires (Section 385 subsections 48 and 50 of
the Tax Code of the City of Buenos Aires), no stamp taxes shall be payable in
the City of Buenos Aires by Holders of the Notes on the sale or transfer of the
Notes.
No
Argentine transfer taxes are applicable on the sale or transfer of the
Notes.
Court
Tax
In the
event that it becomes necessary to institute enforcement proceedings in relation
to the Offer to Purchase in Argentina, a court tax (currently at a rate of 3%)
will be imposed on the amount of any claim brought before the Argentine courts
sitting in the City of Buenos Aires.
Tax
Treaties
Argentina
has entered into Tax Treaties for the Avoidance of Double Taxation and Tax
Evasion (
Double Tax
Treaties
) with a number of countries (Bolivia, Chile, Germany, Italy,
France, Brazil, Spain, Canada, Finland, Sweden, Denmark, The Netherlands, United
Kingdom, Belgium, Switzerland, Mexico, Norway, Australia and
Russia).
The tax
treatment described in the paragraphs above may vary under certain Double Tax
Treaties.
THE
ARGENTINE TAX DISCUSSION SET FORTH ABOVE IS INCLUDED FOR GENERAL INFORMATION
PURPOSES ONLY. ALL HOLDERS ARE ENCOURAGED TO CONSULT THEIR OWN TAX ADVISORS TO
DETERMINE THE ARGENTINE FEDERAL, STATE, LOCAL AND FOREIGN TAX CONSEQUENCES OF
THE OFFERS.
DEALER
MANAGER, DEPOSITARY, LUXEMBOURG TENDER AGENT AND INFORMATION AGENT
The
Company has retained Citigroup Global Markets Inc. to act as Dealer Manager in
connection with the Offers. The Dealer Manager may contact Holders
regarding the Offers and may request brokers, dealers and other nominees to
forward this Offer to Purchase and related materials to beneficial owners of
Notes.
The
Company has agreed to pay the Dealer Manager a fee for its services as Dealer
Manager in connection with the Offers. In addition, the Company will
reimburse the Dealer Manager for its reasonable out-of-pocket
expenses. The Company has also agreed to indemnify the Dealer Manager
and its respective affiliates against certain liabilities in connection with its
services, including liabilities under the federal securities laws. At
any given time, the Dealer Manager may trade the Notes or other securities of
the Company for its own account or for the accounts of its customers and,
accordingly, may hold a long or short position in the Notes.
The
Dealer Manager has provided in the past, and/or is currently providing, other
investment banking and financial advisory services to the Company. The Dealer
Manager may in the future provide various investment banking and other services
to the Company for which it would receive customary compensation from the
Company.
The Bank
of New York Mellon has been appointed Depositary for the Offers. All deliveries
and correspondence sent to the Depositary should be directed to the address set
forth on the back cover of this Offer to Purchase. The Company has
agreed to pay the Depositary reasonable and customary fees for its services and
to reimburse the Depositary for its reasonable out-of-pocket expenses in
connection therewith. The Company has also agreed to indemnify the Depositary
for certain liabilities, including liabilities under the federal securities
laws.
The Bank
of New York Mellon (Luxembourg) S.A. is acting as Luxembourg Tender Agent in
connection with the Offers. If you are in Luxembourg, you may (but are not
required to) contact the Luxembourg Tender Agent and ask it to assist you in
tendering Notes according to the procedures described herein. Any services in
connection with the Offers may be performed in Luxembourg, at the offices of the
Luxembourg Tender Agent, where all information and documentation in connection
with the Offers will be available free of charge.
Global
Bondholder Services Corporation has been appointed Information Agent for the
Offers. All deliveries and correspondence sent to the Information Agent should
be directed to the address set forth on the back cover of this Offer to
Purchase. The Company has agreed to pay the Information Agent
reasonable and customary fees for its services and to reimburse the Information
Agent for its reasonable out-of-pocket expenses in connection therewith.
Requests for additional copies of documentation may be directed to the
Information Agent at the address set forth on the back cover of this Offer to
Purchase.
MISCELLANEOUS
No person
has been authorized to give any information or make any representations other
than those contained or incorporated by reference herein or in the accompanying
Letter of Transmittal and other materials, and, if given or made, such
information or representations must not be relied upon as having been authorized
by the Company, the Dealer Manager, the Depositary, the Luxembourg Tender Agent,
the Information Agent, the trustee or any other person. The
statements made in this Offer to Purchase are made as of the date on the cover
of this Offer to Purchase and the statements incorporated by reference are made
as of the date of the document incorporated by reference. The
delivery of this Offer to Purchase and the accompanying materials shall not,
under any circumstances, create any implication that the information contained
herein or incorporated by reference is correct as of a later date.
Recipients
of this Offer to Purchase and the accompanying materials should not construe the
contents hereof or thereof as legal, business or tax advice. Each
recipient should consult its own attorney, business advisor and tax advisor as
to legal, business, tax and related matters concerning the Offers.
The
Depositary for the Offers is:
The
Bank of New York Mellon
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By
Regular, Registered or Certified Mail;
Hand
or Overnight Delivery:
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By
Facsimile Transmission
(for
Eligible Institutions Only):
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The
Bank of New York Mellon
Corporate
Trust Operations
Reorganization
Unit
101
Barclay Street – 7 East
New
York, New York 10286
Attention:
Ms. Diane Amoroso
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(212)
298-1915
Attention:
Ms. Diane Amoroso
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For
Confirmation by Telephone:
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(212)
815-2742
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Any
questions regarding procedures for tendering Notes or requests for additional
copies of this Offer to Purchase should be directed to the Information
Agent:
Global
Bondholder Services Corporation
65
Broadway – Suite 723
New
York, New York 10006
Banks and
Brokers, Call Collect:
(212)
430-3774
All
Others Call Toll Free:
(866)
540-1500
If you
are in Luxembourg, any questions regarding procedures for tendering Notes or
requests for additional copies of this Offer to Purchase may be directed to the
Luxembourg Tender Agent:
The
Bank of New York Mellon (Luxembourg) S.A.
Aerogolf
Center
1A
Hoehenhof
L-1736
Senningerberg, Luxembourg
Attention:
Corporate Trust Services
Facsimile:
+352
34 20 90 6035
Any
questions regarding the terms of the Offers should be directed to the Dealer
Manager:
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CITIGROUP
GLOBAL MARKETS INC.
390
Greenwich Street, 1
st
Floor
New
York, New York 10013
Toll
Free: 800-558-3745
Collect:
212-723-6108
Attention:
Liability Management Group
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