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SUBSEQUENT EVENTS | 12 Months Ended
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Dec. 31, 2012
SUBSEQUENT EVENTS |
SUBSEQUENT EVENTS | 2. SUBSEQUENT EVENTS Merger with the PPG Chemicals Business On July 18, 2012, Georgia Gulf Corporation (now known as Axiall Corporation), PPG Industries, Inc. ("PPG"), Splitco, a wholly-owned subsidiary of PPG, and Grizzly Acquisition Sub, Inc., a wholly-owned subsidiary of the Company ("Merger Sub"), entered into an Agreement and Plan of Merger (as amended, the "Merger Agreement") pursuant to which we combined with the Merged Business (as defined below) in a Reverse Morris Trust transaction (the "Transactions"). On January 28, 2013 (the "Closing Date"), we completed the Transactions and changed our name to Axiall Corporation. In connection with the Transactions, PPG and Splitco, among other things, entered into a Separation Agreement, dated as of July 18, 2012 (the "Separation Agreement"), pursuant to which PPG transferred to Splitco, substantially all of the assets and liabilities of PPG's business relating to the production of chlorine, caustic soda and related chemicals, including, among other things, PPG's 60 percent interest in Taiwan Chlorine Industries, Ltd., a joint venture between PPG and China Petrochemical Development Corporation (collectively, the "Merged Business"). In addition, PPG completed an exchange offer made to PPG shareholders, which resulted in (i) the exchange of each share of PPG common stock, par value $1.66 2/3 per share, accepted by PPG in the exchange offer for 3.2562 shares of Splitco common stock, par value $0.001 per share; and (ii) the separation of Splitco from PPG. Immediately after the expiration and consummation of the PPG exchange offer, Merger Sub merged with and into Splitco, whereby the separate corporate existence of Merger Sub ceased and Splitco continued as the surviving company and as our wholly-owned subsidiary (the "Merger"). In the Merger, each share of Splitco common stock was converted into the right to receive one share of our common stock which means that each share of PPG common stock accepted by PPG in the exchange offer was effectively converted into 3.2562 shares of our common stock. Upon consummation of the Transactions, we issued 35,249,104 shares of our common stock to the former PPG shareholders, participating in the exchange offer, together with cash in lieu of any fractional shares. Immediately after the consummation of the Merger, approximately 50.5 percent of the outstanding shares of our common stock were held by pre-Merger holders of PPG common stock and approximately 49.5 percent of the outstanding shares of our common stock were held by our pre-Merger stockholders. In connection with the Merger and the related transactions, we entered into certain additional agreements with PPG and Splitco relating to, among other things, certain tax matters, certain employee matters, the provision of certain transition services during a transition period following the consummation of the Merger and the sharing of facilities, services and supplies. As consideration for Splitco's acquisition of the Merged Business, Splitco distributed (the "Special Distribution") to PPG: (i) the cash proceeds of approximately $279.0 million in new bank debt incurred by Splitco under a senior secured term loan facility (the "Term Facility"), which included $67.0 million necessary to fund a net working capital adjustment under the Merger Agreement; and (ii) $688.0 million in aggregate principal amount of 4.625 percent senior notes due 2021 issued by Splitco (the "Splitco Notes"). Upon the consummation of the Merger, the Company and certain subsidiaries of the Company became guarantors of the Term Facility and the Splitco Notes. The value of the Transactions of approximately $2.7 billion consists of $967 million of cash paid to PPG, shares of our common stock received by PPG shareholders valued at approximately $1.8 billion, based on the closing stock sale price of $50.24 on the last trade date prior to the Closing Date of the Transactions, plus the assumption of liabilities, including pension liabilities and other post-retirement obligations. The initial accounting for the Transactions (including the allocation of the purchase price to acquired assets and liabilities) is not complete given the limited amount of time since the Closing Date. Splitco Senior Notes Offering On the Closing Date, Splitco issued $688.0 million in aggregate principal amount of the Splitco Notes. The Splitco Notes were initially issued by Splitco to PPG in the Special Distribution as partial consideration for Splitco's acquisition of the Merged Business. PPG then transferred the Splitco Notes to certain financial institutions in satisfaction of existing debt obligations of PPG held by those financial institutions. Pursuant to a purchase agreement, dated January 17, 2013, among Splitco, the financial institutions and the initial purchasers thereunder, on January 30, 2013, the initial purchasers purchased the Splitco Notes held by the financial institutions and resold them to investors in the Splitco Notes offering. Splitco did not receive any net proceeds from the sale of the Splitco Notes. The Splitco Notes bear interest at a rate of 4.625 percent per annum, payable semi-annually in arrears on February 15 and August 15, commencing on August 15, 2013. Interest will accrue from January 30, 2013. The Splitco Notes will mature on February 15, 2021. Upon the consummation of the Merger, the Company and certain subsidiaries of the Company became guarantors of the Splitco Notes. The Splitco Notes are fully and unconditionally guaranteed, jointly and severally, on a senior unsecured basis by the Company and by each of the Company's and Splitco's existing and future domestic subsidiaries, other than certain excluded subsidiaries. The indenture governing the Splitco Notes contains customary covenants, including certain restrictions on the Company and its subsidiaries to pay dividends. These covenants are subject to a number of important exceptions and qualifications. Further, certain of these covenants will cease to apply at all times after the date on which the Splitco Notes receive investment grade ratings from both Moody's Investors Service, Inc. ("Moody's") and Standard & Poor's Rating Service, a division of The McGraw Hill Companies, Inc. ("Standard & Poor's"), provided no default or event of default under the Indenture exists at that time. Such terminated covenants will not be reinstated if the Splitco Notes lose their investment grade ratings at any time thereafter. In connection with the issuance of the Splitco Notes, Splitco and the Company entered into a registration rights agreement on January 30, 2013 relating to the Splitco Notes, pursuant to which Splitco, the Company and the guarantors agreed to use their commercially reasonable efforts to file an exchange offer registration statement registering exchange notes and to use commercially reasonable efforts to complete the exchange offer within 560 calendar days following the closing of the Splitco Notes offering. Senior Secured Term Loan Facility In connection with the Merger, on January 28, 2013, Splitco entered into a credit agreement with a syndicate of banks led by Barclays Bank PLC (the "Splitco Term Loan Agreement") in order to finance the cash portion of the Special Distribution and the net working capital adjustment as required by the Merger Agreement. Upon consummation of the Merger, the Company and each of its existing domestic subsidiaries that guarantee any other indebtedness of the Company joined as guarantors under the Splitco Term Loan Agreement. Splitco has the option to repay amounts outstanding under the Term Facility within 45 days after the Closing Date, or at any time thereafter prior to its maturity date. Borrowings under the Term Facility are expected to mature on the fourth anniversary of the Closing Date. Upon consummation of the Merger, the Company and certain subsidiaries of the Company became guarantors of the Term Facility. Obligations under the Term Facility are fully and unconditionally guaranteed, on a senior secured basis, by the Company and by each of the Company's and Splitco's existing and future domestic subsidiaries, other than certain excluded subsidiaries. The obligations under the Term Facility are secured by all assets of Splitco, the Company and the subsidiary guarantors. At the election of Splitco, the Term Facility bears interest at a rate equal to: (i) the Base Rate (as defined in the Splitco Term Loan Agreement) plus 1.75 percent per annum; or (ii) the reserve adjusted Eurodollar Rate (as defined in the Splitco Term Loan Agreement) plus 2.75 percent per annum; provided that at no time will the Base Rate be deemed to be less than 2.00 percent per annum or the reserve adjusted Eurodollar Rate be deemed to be less than 1.00 percent per annum. Outstanding borrowings under the Term Facility currently bear interest at an effective rate of 3.75 percent per annum. The Splitco Term Loan Agreement contains customary covenants (subject to exceptions), including certain restrictions on the Company and its subsidiaries to pay dividends. In addition, the Company will be subject to a senior secured leverage ratio (as defined in the Splitco Term Loan Agreement) of 3.50 to 1.00. New ABL Revolver On the Closing Date, the Company refinanced its current asset-based revolving credit facility with a syndicate of banks led by General Electric Capital Corporation (the "New ABL Revolver"), pursuant to an amended and restated credit agreement (the "ABL Credit Agreement" and, together with the Splitco Term Loan Agreement, the "Credit Agreements") in order to fund working capital and operating activities, including future acquisitions and the repayment of certain outstanding indebtedness after the Closing Date. Among other things, the New ABL Revolver (i) increases revolver availability from $300.0 million to $500.0 million, subject to applicable borrowing base limitations and certain other conditions; and (ii) includes a $200.0 million sub-facility for borrowings by the Canadian subsidiaries of the Company, a $200.0 million sub-facility for letters of credit and, subject to lender commitments, a $200.0 million "accordion" feature that permits us to increase the size of the facility. Borrowings under the New ABL Revolver are expected to mature on the fifth anniversary of the Closing Date. U.S. borrowing obligations under the New ABL Revolver are fully and unconditionally guaranteed, on a senior secured basis, by each of the Company's existing and subsequently acquired or organized direct or indirect domestic subsidiaries (other than certain excluded subsidiaries). On the Closing Date, Splitco and its subsidiaries became guarantors under the New ABL Revolver. Canadian borrowing obligations under the New ABL Revolver are unconditionally guaranteed by each of the Company's existing and subsequently acquired or organized direct or indirect domestic and Canadian subsidiaries (other than certain excluded subsidiaries). All obligations under the New ABL Revolver, and the guarantees of those obligations, are secured, subject to certain exceptions, by substantially all of the Company's assets and the assets of the guarantors. At our election, with respect to U.S. borrowings under the New ABL Revolver, the New ABL Revolver will bear interest at a rate equal to either (i) the higher of certain U.S. index rates; or (ii) three-month London Interbank Offered Rate ("LIBOR"), in each case, plus an applicable margin based on the Company's utilization under the New ABL Revolver. At the election of the Company, with respect to Canadian borrowings under the New ABL Revolver, the New ABL Revolver will bear interest at a rate equal to either (i) the higher of certain Canadian index rates; or (ii) three-month LIBOR, in each case, plus an applicable margin based on the Company's utilization under the New ABL Revolver. The ABL Credit Agreement contains customary covenants (subject to exceptions), including certain restrictions on the Company and its subsidiaries to pay dividends. In addition, the Company will be subject to a fixed charge coverage ratio (as defined in the ABL Credit Agreement) of 1.10 to 1.00 if excess availability is less than $62.5 million for three consecutive business days. In connection with closing the Transactions, we borrowed $33.0 million under the New ABL Revolver. Outstanding borrowings under the New ABL Revolver currently bear interest at an effective rate of 3.75 percent per annum. Senior Notes Offering On February 1, 2013, we issued $450.0 million in aggregate principal amount of 4.875 percent senior notes due 2023 (the "Senior Notes"). The Senior Notes bear interest at a rate of 4.875 percent per annum, payable semi-annually in arrears on May 15 and November 15 of each year, commencing on May 15, 2013. Interest will accrue from February 1, 2013. The Senior Notes will mature on May 15, 2023. The Senior Notes are fully and unconditionally guaranteed, jointly and severally, on a senior unsecured basis by each of our existing and future domestic subsidiaries, other than certain excluded subsidiaries. We used the net proceeds from the offering of the Senior Notes, together with cash on hand, to fund the repurchase of our 9.0 percent senior secured notes due 2017 (the "9 percent notes") that were validly tendered and not validly withdrawn in our previously announced tender offer and related consent solicitation for the 9 percent notes (the "Tender Offer"). The indenture governing the Senior Notes contains customary covenants, including certain restrictions on the Company and its subsidiaries to pay dividends. Each of these covenants is subject to a number of important exceptions and qualifications. Further, certain of these covenants will cease to apply at all times after the date on which the Senior Notes receive investment grade ratings from both Moody's and Standard & Poor's, provided no default or event of default under the indenture exists at that time. Such terminated covenants will not be reinstated if the Senior Notes lose their investment grade ratings at any time thereafter. In connection with the issuance of the Senior Notes, we entered into a registration rights agreement on February 1, 2013 relating to the Senior Notes, pursuant to which we and the guarantors agreed to use our commercially reasonable efforts to file an exchange offer registration statement registering exchange notes and to use commercially reasonable efforts to complete the exchange offer within 560 calendar days following the closing of the Senior Notes offering. 9 Percent Notes Tender Offer and Redemption On February 1, 2013 and February 15, 2013, we accepted $444.5 million and $2.3 million, respectively, in aggregate principal amount of 9 percent notes that were validly tendered and not validly withdrawn at, or prior to the applicable tender deadlines. The Company used the net proceeds from the sale of the Senior Notes, together with cash on hand, to repurchase the 9 percent notes that were tendered in the Tender Offer for an aggregate tender price of $502.3 million including a make whole payment of $55.4 million. Also, on February 1, 2013, the Company entered into a supplemental indenture to the indenture governing the 9 percent notes with the trustee thereunder following receipt of consents of the requisite holders of the 9 percent notes, which removed substantially all of the restrictive covenants and certain events of default and other provisions in the indenture governing the 9 percent notes. In addition, on February 1, 2013, the Company delivered an irrevocable notice of redemption with respect to all 9 percent notes that remain outstanding following the expiration of the Tender Offer and the purchase of all 9 percent notes validly tendered. Pursuant to the redemption notice and the terms of the indenture governing the 9 percent notes, the Company will redeem the 9 percent notes that remain outstanding on or before March 4, 2013. Following such redemption, the Company's payment obligations under the indenture governing the 9 percent notes, will be terminated. Certificate of Amendment to Increase Authorized Shares In connection with the Transactions and effective January 28, 2013, the Company also filed a Certificate of Amendment to the Company's certificate of incorporation to increase the number of authorized shares of Company common stock from 100,000,000 shares to 200,000,000 shares.

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- Definition The entire disclosure for significant events or transactions that occurred after the balance sheet date through the date the financial statements were issued or the date the financial statements were available to be issued. Examples include: the sale of a capital stock issue, purchase of a business, settlement of litigation, catastrophic loss, significant foreign exchange rate changes, loans to insiders or affiliates, and transactions not in the ordinary course of business. + References No definition available. + Details
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