Carlyle Aviation is the commercial aviation investment and servicing arm within Carlyle’s $61 billion global credit platform. The closing of the transaction follows the receipt of regulatory approval from all government authorities required by the merger agreement and approval by Fly Leasing’s shareholders. Carlyle Aviation used funds from its fifth aviation fund, SASOF V, for this acquisition.
In addition, Fly Leasing announced the expiration and final results of the previously announced offer by Carlyle Aviation Elevate Merger Subsidiary (Elevate) to exchange the 5.25% senior notes due 2024 of Fly Leasing for newly issued 7% senior notes due 2024 and the solicitation by Elevate of consents to certain proposed amendments and certain proposed waivers to the indenture governing the old notes pursuant to the exchange offer and consent solicitation statement, dated May 28.
Pursuant to the terms of the merger agreement, each common share, par value $0.001 per share, of Fly Leasing issued and outstanding immediately prior to the effective time of the merger, including shares represented by American depositary shares (ADS), other than certain excluded shares (as described in Fly Leasing’s proxy statement relating to the merger), were canceled and converted into the right to receive $17.05 per share in cash, without interest, subject to deduction for any required withholding tax.
ADS holders of record as of the effective time of the merger who hold physical certificated American depositary receipts (ADR) will receive a letter of transmittal and instructions on how to surrender their ADR certificates in exchange for the merger consideration (net of any applicable withholding taxes). ADR holders of record should wait to receive the letter of transmittal before surrendering their ADR certificates. For ADS represented by book entry that are entitled to the merger consideration, payment of the merger consideration (net of any applicable withholding taxes) will be made to ADS holders promptly after Deutsche Bank Trust Company Americas, Fly Leasing’s ADS depositary, receives the merger consideration.
Fly Leasing also requested that trading of its ADS on the New York Stock Exchange be suspended as of Aug. 3. Fly Leasing requested that the NYSE file a Form 25 with the U.S. Securities and Exchange Commission notifying the SEC of the delisting of its ADS on the NYSE and the deregistration of Fly Leasing’s registered securities. The deregistration will become effective 90 days after the filing of the Form 25 or such shorter period as may be determined by the SEC. Fly Leasing intends to terminate its reporting obligations under the Securities Exchange Act of 1934, as amended, by filing a Form 15 with the SEC. Fly Leasing’s obligation to file with the SEC certain reports and forms, including Form 20-F and Form 6-K, will be suspended immediately as of the filing date of the Form 15 and will terminate once the deregistration becomes effective.
Exchange Offer and Consent Solicitation
The exchange offer and consent solicitation expired at 11:59 p.m. EST on July 30. As of the expiration date, according to the information provided by D.F. King & Co., as the exchange agent and information agent for the exchange offer and consent solicitation, $290,447,000 in aggregate principal amount of the old notes, representing approximately 97% of the total outstanding principal amount of the old notes, were validly tendered and accepted for exchange by Elevate in connection with the exchange offer and consent solicitation.
The exchange offer and consent solicitation were subject to the terms and conditions described in the exchange offer and consent solicitation statement, including the consummation of the merger with an affiliate of Carlyle Aviation, receipt of consents of the holders of at least a majority in principal amount of the then outstanding old notes and the “minimum issue condition,” pursuant to which, at the expiration date, the aggregate principal amount of new notes to be issued pursuant to the exchange offer must be at least $150 million.
The amount of outstanding old notes validly tendered and not validly withdrawn as of the expiration date satisfies the minimum issue condition of the exchange offer and the receipt of the requisite consents in the consent solicitation.
In connection with the receipt of the requisite consents to the proposed amendments and proposed waivers, Fly Leasing and the trustee under the existing indenture amended the existing indenture to give effect to the proposed amendments and proposed waivers. Following settlement of the exchange offer and consent solicitation, the amendment to the existing indenture became effective.
In addition, following settlement of the exchange offer and consent solicitation, the new notes were issued pursuant to an indenture, dated Aug. 2, between Elevate and UMB Bank. Substantially concurrently with the issuance of the new notes and the closing of the merger of Elevate with and into Fly Leasing, Fly Leasing, as the surviving company, and UMB entered into a supplemental indenture to the new notes indenture pursuant to which Fly Leasing assumed all obligations of Elevate under the new notes indenture and the new notes.
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