Reported by Consejeros Editorial Team
Tubos Reunidos informed the National Securities Market Commission (CNMV) on Monday that, within the framework of the insolvency proceedings involving its subsidiaries, the Civil Division of the Court of First Instance in Vitoria-Gasteiz has issued two rulings declaring and ordering the publication in the Public Insolvency Register of the terms and conditions submitted by the Insolvency Administrator aimed at regulating the process for the sale of its subsidiaries, production units and the parent company.
Thus, as reported by the company, “these are the rules governing the bidding process for the potential acquisition of the mixed production unit or the Group’s companies”. The transaction includes the parent company and the companies Tubos Reunidos Group, Tubos Reunidos Premium Threads, Aplicaciones Tubulares, Tubos Reunidos Services, Tubos Reunidos GmbH, Tubos Reunidos America and RDT.
In this regard, the procedure will commence with the signing of a confidentiality agreement. Once the duly signed confidentiality letter has been received, together with a copy of the signatory’s powers of attorney, the potential buyer will have the opportunity to participate in a legal and financial review or audit of the production unit or companies (“Due Diligence”).
“For the purposes of conducting the Due Diligence, the individuals identified by the prospective buyer in the Confidentiality Letter will have access to the virtual data room (the ‘Data Room’)”. Access to the Data Room will remain open 24 hours a day (except during periods when access is suspended for maintenance and updates to the Data Room provider’s operating systems) and for a period of 30 working days (in accordance with the local calendar in Vitoria-Gasteiz) from the day following the end of the Initial Period (the “Data Room Access Period”). The Data Room shall contain only the relevant information relating to the Production Unit and the companies.
Once potential interested parties have accessed all relevant information relating to the companies included within the scope of the transaction, including, in particular, employment-related documentation, they shall be granted the opportunity to hold up to a maximum of two meetings, to be held on consecutive days, with the legal representatives of the workers at the Amurrio, Trápaga and Iruña de Oca plants.
‘The purpose of these meetings will be to enable interested parties to gain a direct, comprehensive and verified understanding of the labour situation within the companies, including, amongst other matters, the workforce structure, types of employment contracts, applicable working conditions, current collective agreements and, where applicable, any other relevant circumstances that may affect the continuity of operations and the subrogation of employment contracts’.
In order to be selected from among the potential buyers who proceed to the next phase and thus be able to submit final offers for the acquisition of the Production Unit or companies, the potential buyer must submit, via the coordinator designated in the Confidentiality Agreement (the “Coordinator”) and within five working days from the end of the Data Room Access Period, an initial offer for the acquisition of the Production Unit or the company or companies.
The Initial Offer shall be binding as regards the price, and that price shall be the minimum amount that the Potential Buyer may offer in its Final Offer should it be selected to proceed to the next phase of the Tender Process.
‘It will be viewed favourably if potential bidders include in their initial proposals the provision of interim financing in favour of the companies included within the scope of the transaction, prior to the completion of the transfer’.
In order to prevent parties who do not have a genuine interest in submitting a final offer that is binding in all its terms for the acquisition of the Production Unit and/or the companies within the scope of the transaction from participating in the Tender Process—which could thereby undermine the tender process and the potential acquisition of the Production Unit or companies— alongside the submission of the Initial Offer, the Potential Purchaser must deposit, by way of a security deposit, an amount equivalent to 5% of the price of their Initial Offer.
Once the period for submitting Initial Offers has elapsed, the offers will be analysed and a maximum of five Potential Buyers who have offered the highest prices in their Initial Offers will be selected (individually, a “Selected Potential Buyer”, and collectively, the “Selected Potential Buyers”), provided that they comply with the requirements set out above and, in particular, with the information that must be included in the Initial Offer.
The Selected Potential Buyer will have the opportunity to participate in a question-and-answer process (the “Q&A”) regarding the financial and legal aspects of the Production Unit. The Q&A procedure will consist of submitting questions relating to the information made available via the Data Room.
Once the above process has been completed, the Selected Prospective Buyer must submit their final binding bid, which must be submitted within a maximum of 10 working days from the end of the Meeting Period.
Once the deadline for submitting offers has passed, thenotary in Vitoria-Gasteiz, in the sole presence of theinsolvency administrators and the insolvent companies, will proceed to open the envelopes containing the offers received. The company and the Insolvency Administrators will assess, evaluate and rank the bids in accordance with, amongst other factors, the impact on the continuity of business operations and the future viability of the business; the maintenance of employment and agreed working conditions; or the commitment to interim financing, to the extent that it guarantees operational continuity during the processing and execution of the transaction.
Once the corporate conditions of the bid have been met, the insolvency administrators shall notify the relevant section of the selected bid, together with the agreement reached, within a maximum period of 72 hours, so that the Court of First Instance may, following the necessary procedural steps in accordance with the TRLC, authorise the sale of the Production Unit or the companies to the selected bidder.
