British Airways convertible b

RNS Number : 0578V

British Airways PLC

26 October 2010

 



NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN OR INTO THE UNITED STATES OF AMERICA, CANADA, AUSTRALIA, SOUTH AFRICA, JAPAN OR NEW ZEALAND OR IN ANY OTHER JURISDICTION IN WHICH OFFERS OR SALES WOULD BE PROHIBITED BY APPLICABLE LAW

British Airways Plc

("British Airways" or the "Company")

£350,000,000 5.80 per cent. convertible bonds due 2014

(ISIN: XS0440057783, Common Code 044005778) (the "Bonds")

Further to the announcement in connection with the publication of the merger shareholder documents in relation to the proposed merger between British Airways and Iberia Lineas Aereas de España S.A. ("Iberia"), British Airways announces that it has entered into a supplemental trust deed with International Consolidated Airlines Group, S.A. ("IAG"), BA Holdco S.A. ("BA Holdco") and the Trustee dated 26 October 2010 (the "Supplemental Trust Deed"), amending and supplementing the trust deed dated 13 August 2009 between British Airways and the Trustee (the "Trust Deed").

Capitalised terms used but not defined in this announcement have the meanings given in the terms and conditions of the Bonds (the "Conditions").

Provided that certain conditions are satisfied (and unless an earlier date is notified in writing by British Airways to the Trustee), the Supplemental Trust Deed will become effective on 17 January 2011.  British Airways shall notify holders of the Bonds of the date on which the Supplemental Trust Deed becomes effective in accordance with its terms (the "Supplemental Trust Deed Effective Date").

Summary of terms of the Supplemental Trust Deed

Under the terms of the Supplemental Trust Deed, provided the Supplemental Trust Deed Effective Date has occurred (and the Supplemental Trust Deed has not been terminated in accordance with its terms), with effect from the date on which IAG's shares are admitted to the official list of the UK Listing Authority and admitted to trading on the main market of the London Stock Exchange (the "Listing Date"):

(i)         IAG shall irrevocably and unconditionally guarantee the Company's obligations under the Trust Deed (as supplemented and amended by the Supplemental Trust Deed), the Bonds and the Coupons, including the due and punctual payment of all amounts expressed to be payable by the Company under the Trust Deed (as supplemented and amended by the Supplemental Trust Deed) and the Conditions (the "Guarantee");

(ii)         the Conditions shall be replaced in their entirety by new terms and conditions (the "New Conditions"); and

(iii)        the Trust Deed shall be amended to reflect, among other things, the provision by IAG of the Guarantee and certain consequential amendments.

Amongst other things, the New Conditions provide that each Bond will be convertible at the option of the holder into ordinary shares of €0.50 each in the capital of IAG (the "IAG Shares") at an initial conversion price of £1.89 per IAG Share.  The conversion price will be subject to adjustment in certain circumstances which include, for example, whenever there is a consolidation, reclassification or subdivision in relation to the IAG Shares. 

The Supplemental Trust Deed also provides a mechanism for regulating what will happen in the event that the scheme of arrangement to be effected by British Airways under sections 895 to 899 of the Companies Act 2006 (the "Scheme") does not become effective or the Listing Date does not occur within specified periods. 

Subject to certain exceptions set out therein, the Supplemental Trust Deed will terminate, unless the Company and the Trustee agree otherwise, if the Scheme has not become effective within fifteen London business days of the Supplemental Trust Deed Effective Date.

A separate communication to Bondholders will be made via Clearstream, Luxembourg and Euroclear.

Expected Timetable

The following is an indicative timetable of certain dates relevant to the Bonds and the Supplemental Trust Deed.  These dates are indicative only and will depend, amongst other things, on whether any of the meetings of the shareholders of the Company and Iberia required to implement the proposed merger are adjourned for any reason and the date on which the High Court of Justice of England and Wales sanctions the Scheme.

13 January 2011, 5.30pm            Last date for a Bondholder to submit a Conversion Notice to have a Conversion Date falling prior to the Supplemental Trust Deed Effective Date

17 January 2011            Supplemental Trust Deed Effective Date

21 January 2011            Effective date of the Scheme

24 January 2011            Listing Date

Additional Information

Copies of the Supplemental Trust Deed may be inspected during normal business hours at the offices of the Trustee (currently Fifth Floor, 100 Wood Street, London EC2V 7EX, United Kingdom) and at the offices of the Principal Paying and Conversion Agent (currently 14th Floor, Citigroup Centre, Canada Square, Canary Wharf, London E14 5LB, United Kingdom) from 27 October 2010.

For further information, please contact:

British Airways Shareholder Services

Waterside

PO Box 365

Harmondsworth

UB7 0GB

Disclaimer

The Bonds and the ordinary shares to be issued or delivered upon conversion of the Bonds have not been and will not be registered under the U.S. Securities Act of 1933 (the "Securities Act"), and the Bonds are subject to U.S. tax law requirements. Subject to certain exceptions, the Bonds and the ordinary shares to be issued or delivered upon conversion of the Bonds may not be offered, sold or delivered within the United States or to, or for the account or benefit of, U.S. persons (as defined in the Securities Act).

This announcement is for information purposes only and does not constitute an offer to purchase, sell or exchange or the solicitation of an offer to purchase, sell or exchange any securities or the solicitation of any vote or approval with respect to the merger of British Airways ("BA") and Iberia into IAG (the "Transaction"), nor shall there be any purchase, sale or exchange of securities or such solicitation in any jurisdiction in which such offer, solicitation or sale or exchange would be unlawful prior to the registration or qualification under the laws of such jurisdiction.

This announcement is not to be distributed (directly or indirectly) in or to Canada, Australia, Japan, New Zealand or the Republic of South Africa or any other jurisdiction where to do so would constitute a violation of the relevant laws of such jurisdiction.  This announcement is not an offer of securities for sale in or into Canada, Australia, Japan, New Zealand or the Republic of South Africa or any other jurisdiction where to do so would constitute a violation of the relevant laws of such jurisdiction. 

No money, securities or other consideration is being solicited and, if sent in response to the information contained herein, will not be accepted.

The distribution of this document may, in some countries, be restricted by law or regulation. Accordingly, persons who come into possession of this document should inform themselves of and observe these restrictions. To the fullest extent permitted by applicable law, IAG, BA and Iberia disclaim any responsibility or liability for the violation of such restrictions by any person.

UBS is acting as financial adviser to BA and no one else in connection with the Transaction and will not be responsible to anyone other than British Airways for providing the protections afforded to the clients of UBS nor for providing advice in relation to the Transaction or any other matter referred to herein.

Morgan Stanley are acting as financial advisers to Iberia and no one else in connection with the Transaction and will not be responsible to anyone other than Iberia for providing the protections afforded to the clients of Morgan Stanley nor for providing advice in relation to the Transaction or any other matter referred to herein.

This announcement may contain forward-looking information and statements about BA and Iberia and IAG's businesses after completion of the proposed Transaction. Forward-looking statements are statements that are not historical facts nor guarantees of future performance, and have not been reviewed by BA or Iberia's auditors. These statements include financial projections and estimates and their underlying assumptions, statements regarding plans, objectives and expectations with respect to future operations, products and services, and statements regarding future performance. Forward-looking statements are generally identified by the words "expects," "anticipates," "believes," "intends," "estimates" and similar expressions. Although the managements of BA and Iberia believe that the expectations reflected in such forward-looking statements are reasonable, investors and holders of BA and Iberia shares are cautioned that forward-looking information and statements are subject to various risks and uncertainties, many of which are difficult to predict and generally beyond the control of BA and Iberia, that could cause actual results and developments to differ materially from those expressed in, or implied or projected by, the forward-looking information and statements. These risks and uncertainties include those discussed or identified in the public documents filed by BA with the UKLA and by Iberia with the Comisión Nacional del Mercado de Valores, including BA's 2009/2010 Annual Report and Accounts and Iberia's 2009 Annual Report and Accounts. Investors are cautioned not to place undue reliance on the forward-looking statements, which speak only as of the date they were made. Except as required by applicable law, neither BA nor Iberia undertake any obligation to update any forward-looking information or statements.

 

END

 

 

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