Liberty Latin America Ltd S-3ASR, filed Sep 10, 2020
Liberty Latin America Ltd. (LILA)
As filed with the Securities and Exchange Commission on September 10, 2020
Registration No. 333-
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
LIBERTY LATIN AMERICA LTD.
(Exact name of registrant as specified in its charter)
| Bermuda | 2 Church Street Hamilton, Bermuda HM 11 (441) 295-5950 |
98-1386359 | ||
| (State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) | |||
| (Address, including zip code, and telephone number, including area code, of registrant’s principal executive offices) | ||||
John M. Winter
Senior Vice President,
Chief Legal Officer and Secretary
2 Church Street
Hamilton, Bermuda HM 11
(441) 295-5950
(Name, address, including zip code, and telephone number, including area code, of agent for service)
Copies to:
Adorys Velazquez
Beverly Reyes
Baker Botts L.L.P.
30 Rockefeller Plaza
New York, New York 10112
(212) 408-2500
Approximate date of commencement of proposed sale to the public: As soon as practicable after this registration statement becomes effective and all other conditions to the proposed transactions described herein have been satisfied.
If the only securities being registered on this Form are being offered pursuant to dividend or interest reinvestment plans, please check the following box. ☐
If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, other than securities offered only in connection with dividend or interest reinvestment plans, check the following box. ☒
If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐
If this Form is a registration statement pursuant to General Instruction I.D. or a post-effective amendment thereto that shall become effective upon filing with the Commission pursuant to Rule 462(e) under the Securities Act, check the following box. ☒
If this Form is a post-effective amendment to a registration statement filed pursuant to General Instruction I.D. filed to register additional securities or additional classes of securities pursuant to Rule 413(b) under the Securities Act, check the following box. ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act:
| Large accelerated filer ☒ |
Accelerated filer ☐ |
Non-accelerated filer ☐ |
Smaller reporting company ☐ | |||
| Emerging growth company ☐ |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 7(a)(2)(B) of the Securities Act. ☐
CALCULATION OF REGISTRATION FEE
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| Title of Each Class of Securities to be Registered | Amount to be Registered(1) |
Proposed maximum offering price per unit(2) |
Proposed maximum aggregate |
Amount of fee(4) | ||||
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Class C Common Shares, par value $0.01 per share |
49,089,607 | $7.14 | $350,499,794 | $45,495 | ||||
| Subscription rights to purchase Class C Common Shares (“Class C Rights”) |
— | — | (3) | (3) | ||||
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| (1) | The number of the Registrant’s Class C common shares, par value $0.01 per share (“Class C common shares”), being registered has been determined based upon the maximum number of Class C common shares estimated to be offered by the Registrant pursuant to the rights offering contemplated hereby, which number has been determined based on the number of the Registrant’s Class A common shares, par value $0.01 per share, Class B common shares, par value $0.01 per share, and Class C common shares outstanding on the record date for the distribution of the Class C Rights (the “rights distribution record date”), each multiplied by 0.2690, which is the number of subscription rights that the Registrant intends to distribute for each of the Registrant’s common shares outstanding on the rights distribution record date. Because fractional subscription rights will be rounded up to the nearest whole right as described in the registration statement, the number of Class C common shares being registered hereby also includes up to 70,000 Class C common shares which may be issued as a result of the rounding up of the subscription rights. The actual number of Class C common shares offered may be less than the maximum number stated in the table. |
| (2) | Calculated in accordance with Rule 457(i) under the Securities Act of 1933, as amended. |
| (3) | Pursuant to Rule 457(g), no separate registration fee is payable with respect to the rights being offered hereby as the rights are being registered in the same registration statement as the securities to be offered pursuant thereto. |
| (4) | Calculated on the basis of $129.80 per million of the proposed maximum aggregate offering price. |
PROSPECTUS
LIBERTY LATIN AMERICA LTD.
Class C Common Shares, par value $0.01 per share
Subscription Rights to Purchase up to 49,019,607 Class C Common Shares at $7.14 per Share*
Liberty Latin America Ltd. (Liberty Latin America, which is also referred to in this prospectus as we, us, our or the company) is an international provider of fixed, mobile and subsea telecommunications services. Through our subsidiaries, we provide residential and business-to-business (B2B) services in (i) over 20 countries, primarily in Latin America and the Caribbean, through Cable & Wireless Communications Limited (C&W), (ii) Chile, through VTR Finance NV (VTR Finance), formerly known as VTR Finance B.V., and its subsidiaries, which includes VTR.com SpA (VTR), (iii) Puerto Rico, through Liberty Communications PR Holding LP (Liberty PR), formerly known as Leo Cable LP, and its subsidiaries, which includes Liberty Communications of Puerto Rico LLC, formerly known as Liberty Cablevision of Puerto Rico LLC (LCPR), collectively “Liberty Puerto Rico,” and (iv) Costa Rica, through LBT CT Communications, S.A. (LBT CT) and its subsidiary, Cabletica S.A. (Cabletica).
We are distributing (the rights distribution) to holders of our Class A common shares, Class B common shares and Class C common shares (each as defined below) 0.2690 of a subscription right (a Class C Right or a right) to purchase one Class C common share for each Class A common share, Class B common share and Class C common share (the rights offering) held as of 5:00 p.m., New York City time, on September 8, 2020 (the rights distribution record date).
If all conditions to the rights distribution are satisfied, at 5:00 p.m., New York City Time, on September 10, 2020 (the rights distribution date):
| • | You will receive 0.2690 of a Class C Right for each Class A common share, par value $0.01 per share (Class A common share or LILA), held by you as of the rights distribution record date; |
| • | You will receive 0.2690 of a Class C Right for each Class B common share, par value $0.01 per share (Class B common share or LILAB), held by you as of the rights distribution record date; and |
| • | You will receive 0.2690 of a Class C Right for each Class C common share, par value $0.01 per share (Class C common share or LILAK, and together with LILA and LILAB, the common shares), held by you as of the rights distribution record date. |
The total number of Class C Rights to be issued to you will be rounded up to the nearest whole number (after taking into account the aggregate number of Class C Rights you would otherwise be entitled to receive in respect of the aggregate number of common shares held of record by you as a result of the rights offering). Such rounding will be made with respect to each beneficial shareholder.
The maximum number of Class C Rights to be issued in the rights distribution pursuant to which our rightsholders may acquire an equivalent number of our Class C common shares is 49,019,607.*
The rights offering will commence on September 11, 2020. In the rights offering, each Class C Right will entitle the holder to a basic subscription privilege and an oversubscription privilege. Under the basic subscription privilege, each whole Class C Right entitles its holder to purchase one Class C common share at a subscription price of $7.14, which is equal to an approximate 25% discount to the volume weighted average trading price of our Class C common shares beginning on August 31, 2020 and ending on (and including) September 2, 2020 (such price, the subscription price, and such trading day period, the subscription price determination period). Under the oversubscription privilege, each rightsholder which exercises its basic subscription privilege, in full, will have the right to subscribe, at the subscription price, for up to that number of Class C common shares which are not purchased by rightsholders under their basic subscription privilege. If a rightsholder delivers an oversubscription request for Class C common shares and we receive oversubscription requests for more Class C common shares than we have available for oversubscription, the rightsholder will receive its pro rata portion of the available Class C common shares based on the number of shares it purchased under its basic subscription privilege or, if less, the number of shares for which it oversubscribed.
All exercises of Class C Rights are irrevocable even if our board determines, in its sole discretion, to extend the expiration time. The rights offering will expire at 5:00 p.m., New York City time, on September 25, 2020, unless we extend it, with the length of such extension to be determined by our board of directors (or a committee thereof) in its sole discretion. However, we do not intend to extend the expiration time of the rights offering for more than 25 trading days past the original eleven trading day subscription period.
You are responsible for the method of delivery of rights certificates, any necessary accompanying documents and payment of the subscription price to the subscription agent. If you send the rights certificates and other items by mail, we recommend that you send them by registered mail, properly insured, with return receipt requested. There may be unexpected delays in mail processing times as a result of the coronavirus (COVID-19) pandemic. You should allow a sufficient number of days to ensure delivery to the subscription agent and clearance of any payment by uncertified check prior to the expiration time.
No vote of Liberty Latin America’s shareholders is required or is being sought to authorize or effectuate the rights offering. No action is required of you to receive your Class C Rights.
We have been informed by John Malone, a director emeritus of our company, and Searchlight Capital Partners, L.P., who together own approximately 25.4% of the aggregate voting power of our outstanding common shares, that they each intend to exercise in full their respective basic subscription privileges in the rights offering. In addition, each member of our board and executive management team has advised us that he or she intends to exercise his or her basic subscription rights in full. However, neither we nor our board of directors (nor any committee thereof) has made any recommendation as to whether you should exercise or transfer your rights. You should decide whether to transfer your rights, subscribe for Class C common shares, or simply take no action with respect to your rights based on your own assessment of your best interests.
Our Class A common shares and Class C common shares trade on the Nasdaq Global Select Market under the symbols “LILA” and “LILAK,” respectively. Our Class B common shares are quoted on the OTC Grey Markets under the symbol “LILAB.” We expect to list the Class C Rights on the Nasdaq Global Select Market on a “when-issued” basis on September 10, 2020 under the symbol “LILRV” and in the “regular way” on September 11, 2020 (the first trading day following the rights distribution date and the commencement date for the rights offering) under the symbol “LILAR.”
In reviewing this prospectus, you should carefully consider the matters described under the caption “Risk Factors” beginning on page 13.
Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or has passed upon the adequacy or accuracy of this prospectus as truthful or complete. Any representation to the contrary is a criminal offense.
WE ARE NOT ASKING YOU FOR A PROXY AND YOU ARE REQUESTED NOT TO SEND US A PROXY.
In connection with this offering, J.P. Morgan Securities LLC, the dealer manager for this offering, will receive a fee for its marketing and soliciting services. See “Plan of Distribution.”
The dealer manager for the rights offering:
J.P. Morgan
The date of this prospectus is September 10, 2020.
| * | Plus additional Class C common shares which may be issued as a result of rounding fractional Class C Rights up to the nearest whole right as described herein. |
| TABLE OF CONTENTS
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| ENFORCEMENT OF CIVIL LIABILITIES UNDER UNITED STATES FEDERAL SECURITIES LAWS | 1 | |||
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| 13 | ||||
| 16 | ||||
| 19 | ||||
| 31 | ||||
| MATERIAL BERMUDA TAX CONSEQUENCES OF THE RIGHTS DISTRIBUTION AND THE RIGHTS OFFERING | 37 | |||
| 38 | ||||
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Unless otherwise indicated or unless the context requires otherwise, all references in this prospectus to “Liberty Latin America,” the “company,” “we,” “us,” “our,” or similar references, mean Liberty Latin America Ltd.
We and our dealer manager, J.P. Morgan Securities LLC (the dealer manager), have not authorized anyone to provide any information other than that contained or incorporated by reference in this prospectus or in any free writing prospectus prepared by or on behalf of us or to which we have referred you. We take no responsibility for, and can provide no assurance as to the reliability of, any other information that others may give you. You should assume that the information appearing in this prospectus is accurate only as of the date on its cover page and that any information previously filed with the Securities and Exchange Commission (the SEC) that is incorporated by reference is accurate only as of the date such document is incorporated by reference. Our business, financial condition, results of operations and prospects may have changed since those dates.
ENFORCEMENT OF CIVIL LIABILITIES UNDER UNITED STATES FEDERAL SECURITIES LAWS
We are a Bermuda exempted company. As a result, the rights of holders of Class C Rights or Class C common shares are governed by Bermuda law and our memorandum of association and bye-laws. The rights of shareholders under Bermuda law may differ from the rights of shareholders of companies incorporated in other jurisdictions, including the U.S. and the U.K. Certain of our directors are not residents of the United States, and a substantial portion of our assets are located outside the United States. As a result, it may be difficult for investors to effect service of process on those persons in the United States or to enforce in the United States judgments obtained in U.S. courts against us or those persons based on the civil liability provisions of the U.S. securities laws. It is doubtful whether courts in Bermuda will enforce judgments obtained in other jurisdictions, including the United States, or entertain actions in Bermuda against us or our directors or officers under the securities laws of those jurisdictions. Our registered address in Bermuda is 2 Church Street, Hamilton HM 11, Bermuda.
WHERE YOU CAN FIND MORE INFORMATION
This prospectus is a part of a registration statement we have filed with the SEC under the Securities Act of 1933, as amended (the Securities Act). As permitted by SEC rules, this prospectus does not contain all of the information we have included in the registration statement and the accompanying exhibits and schedules we file with the SEC. You may refer to the registration statement, exhibits and schedules for more information about us and the securities.
We are required to comply with the reporting requirements of the Securities Exchange Act of 1934, as amended (the Exchange Act), and, in accordance with those requirements, we file annual, quarterly and current reports, proxy statements and other information with the SEC. The SEC maintains a website that contains information we file electronically with the SEC, which you can access over the Internet at http://www.sec.gov. In addition, our SEC filings and other information about us may also be obtained from our website at www.lla.com, although information on our website is not incorporated by reference into and does not constitute a part of this prospectus. Our Class A common shares and Class C common shares are listed on the Nasdaq Global Select Market under the symbols “LILA,” and “LILAK,” respectively.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The SEC allows us to “incorporate by reference” information into this prospectus, which means that we can disclose important information to you by referring you to other documents. The information incorporated by
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reference is an important part of this prospectus and is deemed to be part of this prospectus except for any information superseded by this prospectus or any other document incorporated by reference into this prospectus. Any statement, including financial statements, contained in our Annual Report on Form 10-K for the year ended December 31, 2019, shall be deemed to be modified or superseded to the extent that a statement, including financial statements, contained in this prospectus or in any other later incorporated document modifies or supersedes that statement. We incorporate by reference the documents listed below and any future filings made by us with the SEC under Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act prior to the termination of the offering described herein (other than any filing or portion thereof that is furnished, rather than filed, under applicable SEC rules):
| • | our Annual Report on Form 10-K for the year ended December 31, 2019, filed on February 19, 2020, (including the description of our Class C common shares contained in Exhibit 4.8 thereto, and any amendment or report filed for the purpose of updating such description) and Amendment No. 1 thereto on Form 10-K/A, filed on April 29, 2020; |
| • | our Quarterly Reports on Form 10-Q for the quarters ended March 31, 2020 and June 30, 2020, filed on May 5, 2020 and August 5, 2020, respectively; and |
| • | our Current Reports on Form 8-K (other than any portion thereof furnished or deemed furnished) filed on January 30, 2020, March 17, 2020 and June 30, 2020. |
Any statement contained in the filings (or portions of filings) incorporated by reference in this prospectus will be deemed to be modified or superseded for purposes of this prospectus to the extent that a statement contained in this prospectus or in any filing by us with the SEC prior to the completion of this offering modifies, conflicts with or supersedes such statement. Any statement so modified or superseded will not be deemed, except as so modified or superseded, to constitute a part of this prospectus.
You may request a copy of these filings, at no cost, by writing or telephoning us at the following address or phone number:
Liberty Latin America Ltd.
2 Church Street
Hamilton, Bermuda HM 11
Telephone: (441) 295-5950
Attention: Investor Relations
TRADE NAMES, TRADEMARKS AND SERVICE MARKS
Any trade names, trademarks and service marks appearing in or incorporated by reference into this prospectus are our property or the property of our affiliates or are licensed by us or our affiliates, and may be registered in the United States Patent and Trademark Office and / or in foreign trademark offices. Trade names, trademarks and service marks of other organizations appearing in or incorporated by reference into this prospectus are the property of their respective holders.
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The following is a summary of material information discussed in this prospectus. It is included for convenience only and should not be considered complete. You should carefully review this entire prospectus, including the risk factors and the documents incorporated by reference into this prospectus, to better understand the rights offering and our business and financial position.
Our Company
We are an international provider of fixed, mobile and subsea telecommunications services. We provide residential and B2B communications services in (i) over 20 countries, primarily in Latin America and the Caribbean, through C&W, (ii) Chile and Costa Rica, through VTR/Cabletica, and (iii) Puerto Rico, through Liberty Puerto Rico. C&W also provides (i) B2B services in certain other countries in Latin America and the Caribbean and (ii) wholesale communication services over its subsea and terrestrial fiber optic cable networks that connect over 40 markets in that region.
C&W owns less than 100% of certain of its consolidated subsidiaries, including The Bahamas Telecommunications Company Limited (C&W Bahamas) (a 49.0%-owned entity that owns all of our operations in the Bahamas), Cable & Wireless Jamaica Limited (C&W Jamaica) (a 92.3%-owned entity that owns the majority of our operations in Jamaica), and Cable & Wireless Panama, S.A. (C&W Panama) (a 49.0% owned entity that owns most of our operations in Panama). In addition, we own Cabletica through our 80.0% ownership of its parent, LBT CT.
We were originally formed as a Bermuda company on July 11, 2017, as a wholly-owned subsidiary of Liberty Global plc (Liberty Global) under the name LatAm Splitco Ltd. and we changed our name to Liberty Latin America Ltd. on September 22, 2017. During October 2017, the Board of Directors of Liberty Global authorized a plan to distribute to the holders of Liberty Global’s LiLAC Shares (as defined and described in note 1 to our audited consolidated financial statements in our 2019 Annual Report) common shares in our company (the Split-Off), which was completed on December 29, 2017.
Our Business
We are a leading telecommunications company with operations in Chile, Panama, Puerto Rico, Costa Rica, the Caribbean, including Jamaica, and other parts of Latin America. The communications and entertainment services that we deliver to our residential and business customers include video, broadband internet, telephony and mobile services. In most of our operating footprint, we offer a “triple-play” of bundled services of digital video, internet and telephony in one subscription. We are also focused on leveraging our full-service product suite to deliver fixed-mobile convergence offerings. Available fixed service offerings depend on the bandwidth capacity of a particular system and whether it has been upgraded for two-way communications.
Our business products and services also include enterprise-grade connectivity, data center, hosting and managed solutions, as well as IT solutions with customers ranging from small and medium enterprises to international companies and governmental agencies. We also operate an extensive subsea and terrestrial fiber optic cable network that connects over 40 markets in the region, providing connectivity solutions both within and outside our operating footprint.
We are the largest fixed-line provider of high-speed broadband and video services across a number of our markets, including Chile, Puerto Rico, Jamaica and Trinidad and Tobago. We also operate the largest telephony network in most of our C&W markets where we provide residential communications services. In addition, we offer mobile services throughout most of our operating footprint. Across C&W’s markets, we are a mobile network operator in Panama and most of our Caribbean markets, including the Bahamas and Jamaica. As a network provider, we are able to offer a full range of voice and data services, including value-added, data-based and fixed-mobile converged services. In Chile, VTR provides mobile services as a mobile virtual network operator (MVNO) and leases a third-party’s radio access network.
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At June 30, 2020, we (i) owned and operated fixed networks that passed 7,622,600 homes and served 6,120,300 revenue generating units (RGUs), comprising 2,703,600 broadband internet subscribers, 1,969,600 video subscribers and 1,447,100 fixed-line telephony subscribers and (ii) served 3,309,700 mobile subscribers.
Recent Developments
AT&T Acquisition
On October 9, 2019, our wholly-owned subsidiary, Liberty PR, agreed to acquire AT&T’s wireless and wireline operations in Puerto Rico and the U.S. Virgin Islands (the AT&T Acquisition) in an all-cash transaction. The AT&T Acquisition is valued at an enterprise value of $1.95 billion on a cash- and debt-free basis, subject to certain adjustments. We intend to finance this acquisition through a combination of net proceeds from our $1.0 billion principal amount term loan facility due October 15, 2026, the 6.75% senior secured notes due October 15, 2027 of our subsidiary, LCPR Senior Secured Financing Designated Activity Company, and available liquidity. In connection with the AT&T Acquisition, we expect to incur significant operating and capital costs to integrate the businesses of AT&T with our existing operations in Puerto Rico.
The AT&T Acquisition is subject to the satisfaction of customary closing conditions, including reviews by the United States Federal Communications Commission and clearance by the Department of Justice (DOJ) under the Hart-Scott-Rodino Antitrust Improvement Act of 1976, as amended (the HSR Act). On January 10, 2020, we received a request for additional information and documentary materials (a Second Request) from the DOJ regarding the AT&T Acquisition. This information request was issued in conjunction with the DOJ’s review of the transaction under the HSR Act. Issuance of the Second Request extends the waiting period under the HSR Act until 30 days after both Liberty Latin America and AT&T have substantially complied with the Second Request or such later time as such parties may agree with the DOJ, unless the waiting period is terminated earlier by the DOJ. We are continuing to work cooperatively with the DOJ in connection with its review. We expect the AT&T Acquisition to close during the fourth quarter of 2020.
Telefonica-Costa Rica Acquisition
On July 30, 2020, we entered into a definitive agreement to acquire Telefónica S.A.’s wireless operations in Costa Rica in an all-cash transaction based upon an enterprise value of $500 million on a cash- and debt-free basis (the Telefonica-Costa Rica Acquisition). The transaction is subject to certain customary closing conditions, including regulatory approvals, and is expected to close in the first half of 2021.
VTR Class Action
On August 25, 2020, VTR was notified that the Chilean National Consumer Authority (“Sernac”, the Spanish acronym for Servicio Nacional del Consumidor) had filed a class action complaint against VTR in the 14 Santiago Civil Court. The complaint relates to consumer complaints regarding VTR’s broadband service and capacity during the pandemic and raises claims regarding, among other things, VTR’s disclosure of its broadband speeds and aggregate capacity availability and VTR’s response to address the causes of service instability during the pandemic. VTR was also notified in August about two additional class action complaints filed by consumer associations (ODECU and AGRECU) making similar claims and allegations. The class action complaint of ODECU was filed in the 21st Civil Court of Santiago, and the class action complaint of AGRECU was filed in the 26th Civil Court of Santiago. The complaint of SERNAC and ODECU seeks (i) the Court declare that VTR has infringed the rules of the Consumer Protection Law; (ii) the responsibility of VTR for such infractions and if so, establish the corresponding fines; and (iii) compensatory damages. In the case of AGRECU, the complaint only seeks compensatory damages. We believe that the allegations contained in the complaints are without merit, in particular as it relates to VTR’s service and response during the pandemic and intend to defend the complaints vigorously. We cannot predict at this point the length of time that these actions will be ongoing or the liability, if any, which may arise therefrom.
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Consolidated Net Leverage Ratio as of June 30, 2020
As a supplement to the financial information included in our Form 10-Q for the six months ended June 30, 2020, we have set forth below our consolidated net leverage ratio. Our consolidated net leverage ratio, a non-GAAP measure, is defined as adjusted total debt and finance lease obligations (total carrying value of debt and finance lease obligations plus discounts, premiums and deferred finance costs, less projected derivative principal-related cash receipts) less cash and cash equivalents and restricted cash held in escrow at Liberty Puerto Rico that will be used to fund a portion of the AT&T Acquisition to annualized Adjusted OIBDA for the six months ended June 30, 2020. For purposes of this calculation, adjusted total debt and finance lease obligations is measured using swapped foreign currency rates. We believe our consolidated net leverage ratio is useful because it allows our investors to consider the aggregate leverage on the business inclusive of any leverage at the Liberty Latin America level, not just at each of our operations. Investors should view consolidated net leverage as a supplement to, and not a substitute for, ratios that would be calculated based upon measures presented in accordance with U.S. GAAP. Reconciliations of the numerator and denominator used to calculate the consolidated net leverage ratio as of June 30, 2020 are set forth below (in millions, except ratio):
| Total debt and finance lease obligations |
$ | 8,841.0 | ||
| Add: Discounts, premiums and deferred financing costs, net |
142.2 | |||
| Less: Projected derivative principal-related cash receipts (a) |
(31.0 | ) | ||
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| Adjusted total debt and finance lease obligations |
8,952.2 | |||
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| Less: |
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| Cash and cash equivalents |
1,752.4 | |||
| Restricted cash (b) |
1,352.9 | |||
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| Net debt and finance lease obligations |
$ | 5,846.9 | ||
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| Adjusted OIBDA: |
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| Adjusted OIBDA for the six months ended June 30, 2020 (c) |
$ | 696.5 | ||
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| Annualized Adjusted OIBDA for the six months ended June 30, 2020 |
$ | 1,393.0 | ||
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| Consolidated net leverage ratio |
4.2X |
| (a) | Amount represents the U.S. equivalent and is based on interest rates and exchange rates that were in effect as of June 30, 2020. For a discussion of our projected cash flows associated with derivative instruments, please see Item 3. Quantitative and Qualitative Disclosures About Market Risk—Projected Cash Flows Associated with Derivative Instruments in our Report on Form 10-Q for the six months ended June 30, 2020. |
| (b) | Amount relates to restricted cash held in escrow at Liberty Puerto Rico that will be used to fund a portion of the AT&T Acquisition. |
| (c) | Adjusted OIBDA is a non-GAAP measure. See below for reconciliation of Adjusted OIBDA to the nearest U.S. GAAP measure. |
Adjusted OIBDA Reconciliation
Adjusted OIBDA is a non-GAAP measure and the primary measure used by our chief operating decision maker to evaluate segment operating performance. Adjusted OIBDA is also a key factor that is used by our internal decision makers to (i) determine how to allocate resources to segments and (ii) evaluate the effectiveness of our management for purposes of incentive compensation plans. Adjusted OIBDA is defined as operating income or loss before share-based compensation, depreciation and amortization, provisions and provision releases related to significant litigation and impairment, restructuring and other operating items. Other operating items include (i) gains and losses on the disposition of long-lived assets, (ii) third-party costs directly associated
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with successful and unsuccessful acquisitions and dispositions, including legal, advisory and due diligence fees, as applicable, and (iii) other acquisition-related items, such as gains and losses on the settlement of contingent consideration. Our internal decision makers believe Adjusted OIBDA is a meaningful measure because it represents a transparent view of our recurring operating performance that is unaffected by our capital structure and allows management to (i) readily view operating trends, (ii) perform analytical comparisons and benchmarking between segments and (iii) identify strategies to improve operating performance in the different countries in which we operate. We believe this measure is useful to investors because it is one of the bases for comparing our performance with the performance of other companies in the same or similar industries, although our measure may not be directly comparable to similar measures used by other public companies. Adjusted OIBDA should be viewed as a measure of operating performance that is a supplement to, and not a substitute for, operating income or loss, net earnings or loss and other U.S. GAAP measures of income. A reconciliation of our operating loss to total Adjusted OIBDA for the six months ended June 30, 2020 is presented in the following table (in millions):
| Operating loss |
$ | (98.2 | ) | |
| Share-based compensation expense |
47.3 | |||
| Depreciation and amortization |
429.9 | |||
| Impairment, restructuring and other operating items, net |
317.5 | |||
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| Adjusted OIBDA |
$ | 696.5 | ||
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Additional Information
For additional information regarding our business, financial condition, results of operations, and other important information regarding our company, we refer you to our filings with the SEC incorporated by reference in this prospectus. For instructions on how to find copies of these documents, see “Where You Can Find More Information.”
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The Rights Offering
The following is a brief summary of the terms of the rights offering. Please see “The Rights Offering” for a more detailed description of the matters described below.
| Q: | What is a rights offering? |
| A: | A rights offering is a distribution of subscription rights on a pro rata basis to shareholders of a company. We will distribute (the rights distribution) to holders of our Class A common shares, Class B common shares and Class C common shares as of the rights distribution record date (as defined below), 0.2690 of a transferable subscription right issued by us to purchase one Class C common share (a Class C Right or a right) for each Class A common share, Class B common share and Class C common share, as applicable, held as of the rights distribution record date. |
| Q. | What are the record and distribution dates for the rights offering? |
| A. | Each holder of record of our common shares as of 5:00 p.m., New York City time, on September 8, 2020 (the rights distribution record date) will be entitled to receive Class C Rights on the rights distribution date, which will be 5:00 p.m., New York City time, on September 10, 2020. |
| Q. | Are there other key dates relating to the rights offering? |
| A. | Yes. Below is a list of the key dates for the rights offering of which you should be aware. With the exception of the rights distribution record date and rights distribution date, such dates are subject to change in the event our board of directors (or a committee thereof) determines to extend the rights offering (as discussed herein). For more information regarding these dates, we encourage you to review “The Rights Offering” below, as that section of the prospectus describes other timing considerations of which you should be aware regarding the rights offering (for example, dates by which different forms of payment upon the exercise of rights are deemed received). |
| Date |
Event / Action | |
| 5:00 p.m., New York City time, on September 8, 2020 |
Rights distribution record date. | |
| September 10, 2020 |
Expected when-issued trading period for the Class C Rights on the Nasdaq Global Select Market under the symbol “LILRV.” | |
| 5:00 p.m., New York City time, on September 10, 2020 |
Rights distribution date. | |
| September 11, 2020 |
Commencement of the rights offering.
Expected commencement of “regular way” trading for the Class C Rights on the Nasdaq Global Select Market under the symbol “LILAR.” | |
| 5:00 p.m., New York City time, on September 18, 2020 (five business days prior to the expiration date, as may be adjusted in the event of an extension of the expiration time) | Date by which the subscription agent must have received appropriate materials from holders of rights in order to have the subscription agent sell such rights.
Date by which registered foreign holders of Class C Rights must notify the subscription agent and establish to the satisfaction of the subscription agent that they are permitted to exercise their Class C Rights.
Date by which the subscription agent must have received appropriate materials from holders of rights | |
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| Date |
Event / Action | |
| in order to transfer all or a portion of such holder’s rights. |
| 5:00 p.m., New York City time, on September 25, 2020 |
Expiration of the rights offering. |
| Q. | What are the Class C Rights? |
| A. | Each whole Class C Right entitles its holder to purchase one Class C common share from us, at a subscription price of $7.14, which is equal to an approximate 25% discount to the volume weighted average trading price of our Class C common shares beginning on August 31, 2020 and ending on (and including) September 2, 2020 (such price, the subscription price and such trading day period, the subscription price determination period). |
| Q. | What do I have to do to receive Class C Rights? |
| A. | Nothing. Holders of our common shares on the rights distribution record date are not required to pay any cash or deliver any other consideration, or give up any common shares, to receive the Class C Rights distributable to them in the rights distribution. |
Because it is expected that the ex-dividend date for the rights offering will occur on the first trading day immediately following the rights distribution date, if you are a holder of Class A common shares, Class B common shares or Class C common shares on the rights distribution record date, you will be entitled to receive the Class C Rights issuable in respect of those shares only if you continue to hold them through the rights distribution date. See “The Rights Offering—Trading Prior to the Rights Distribution Record Date.”
| Q. | What is the basic subscription privilege? |
| A. | The basic subscription privilege entitles each holder of a whole Class C Right to purchase one Class C common share, for the subscription price. |
| Q. | What is the oversubscription privilege? |
| A. | The oversubscription privilege entitles each holder of a whole Class C Right, if the holder fully exercises its basic subscription privilege, to subscribe at the subscription price for up to that number of Class C shares, as applicable, that are offered in the rights offering but are not purchased by the other rightsholders under their basic subscription privilege. |
| Q. | What are the limitations on the oversubscription privilege? |
| A. | We will be able to satisfy exercises of the oversubscription privilege only if rightsholders subscribe for less than all of the Class C common shares that may be purchased under the basic subscription privilege of the Class C Rights. If sufficient shares are available, we will honor the oversubscription requests in full. If oversubscription requests exceed the shares available, we will allocate the available shares pro rata among those who oversubscribed in proportion to the number of Class C common shares that each rightsholder purchases pursuant to its basic subscription privilege or, if less, the number of shares for which it oversubscribed. Only record date shareholders who exercise in full all rights issued to them are entitled to exercise the oversubscription privilege. You may not exercise your oversubscription privilege if you transfer all or a portion of your rights. |
| Q. | How will fractional Class C Rights be treated in the rights offering? |
| A. | We will not issue, or pay cash in lieu of, fractional rights. Instead, the total number of Class C Rights to be issued to you will be rounded up to the nearest whole number (after taking into account the aggregate number of Class C Rights you would otherwise be entitled to receive in respect of the aggregate number of common shares held of record by you as a result of the rights offering). Such rounding will be made with respect to each beneficial shareholder. |
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| Q. | Do the Class C Rights provide the holder with any right to subscribe for our Class A common shares or Class B common shares? |
| A. | No. Class C Rights only entitle the holders to subscribe for Class C common shares. |
| Q. | When will the rights offering commence and when will it expire? |
| A. | The rights offering will commence on September 11, 2020, and will remain open for a eleven trading day period. The rights offering will expire at 5:00 p.m., New York City time, on September 25, 2020 (such date and time, the expiration time), unless we extend it. We may extend the expiration time for any reason and for any length of time at the discretion of our board of directors. However, we do not intend to extend the expiration time of the rights offering for more than 25 trading days past the original eleven trading day period. If we do not complete the rights offering by the eleventh trading day of the subscription period and the expiration time has not been extended beyond such date, we will cause the subscription agent to return to each exercising holder the entirety of such holder’s aggregate subscription price previously paid. |
| Q. | Are there any conditions to the rights distribution? |
| A. | The completion of the rights distribution is subject to the satisfaction of the following conditions: |
| • | the effectiveness under the Securities Act of the Registration Statement on Form S-3, of which this prospectus forms a part; |
| • | the approval of the Nasdaq Stock Market LLC (Nasdaq) for the listing of our Class C Rights; and |
| • | our board of directors shall not have revoked the rights distribution prior to the rights distribution date. |
| Q. | Can you terminate the rights offering? |
| A. | Yes. Our board of directors (or a committee thereof) may determine to abandon the rights distribution at any time prior to the rights distribution date, and, even after the Class C Rights have been distributed, may also determine to abandon the rights offering prior to its commencement or terminate the rights offering following its commencement for any reason before the expiration time. |
| Q. | If you terminate the rights offering, will my subscription payment be refunded to me? |
| A. | Yes. If we terminate the rights offering, the subscription agent will return promptly all subscription payments received by it. We will not pay interest on, or deduct any amounts from, subscription payments if we terminate the rights offering. |
| Q. | If I purchase subscription rights in the market and you terminate the rights offering, will I be reimbursed the price I paid to purchase my rights? |
| A. | No. If you purchase Class C Rights in the market and we terminate the rights offering at any time, you will incur the loss of the entire price you paid to acquire your Class C Rights. |
| Q. | Why are you conducting the rights offering and how will you use the proceeds received from the rights offering? |
| A. | We are conducting the rights offering to raise capital to finance acquisitions, including the recently announced Telefonica-Costa Rica Acquisition, and for general corporate purposes. See “Use of Proceeds” for a more detailed description. We determined the subscription price and the number of Class C Rights to distribute based on, among other things, the market price of our Class C common shares, discounts used in similar rights offerings, the general conditions of the securities markets and the amount of proceeds, after any deductions for expenses related to the rights offering, we wish to raise. |
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| Q. | How many Class C common shares do you expect to be outstanding following the rights offering? |
| A. | Assuming the rights offering is fully subscribed, and without giving effect to any anti-dilution adjustments associated with outstanding equity awards or rounding of the Class C Rights as described herein, we estimate that we would have outstanding 180,395,049 Class C common shares immediately following the completion of the rights offering. |
| Q. | How might the rights offering affect the trading price of your Class C common shares? |
| A. | We cannot assure you as to how the rights offering will impact the trading price of our Class C common shares. Historically, due to the inclusion of a discounted subscription price and the resulting dilution, rights offerings have adversely impacted the trading price of the underlying shares, especially during the period the rights offering remains open. |
| Q. | How do I exercise my Class C Rights? |
| A. | Subscription materials, including rights certificates, will be made available to holders upon the commencement of the rights offering. Each record holder who wishes to exercise the basic subscription privilege under its Class C Rights should properly complete and sign the applicable rights certificate and deliver the rights certificate together with payment of the subscription price for each Class C common share subscribed for to the subscription agent before the expiration time. Each record holder who further wishes to exercise the oversubscription privilege under its rights must also include payment of the subscription price for each Class C common share subscribed for under the oversubscription privilege. We recommend that any rightsholder who uses the United States mail to effect delivery to the subscription agent use insured, registered mail with return receipt requested. There may be unexpected delays in mail processing times as a result of the COVID-19 pandemic. Rightsholders should allow a sufficient number of days to ensure delivery to the subscription agent and clearance of any payment by uncertified check prior to the expiration time. Any holder who cannot deliver its rights certificate to the subscription agent before the expiration time may use the procedures for guaranteed delivery described under the heading “The Rights Offering—Delivery of Subscription Materials and Payment—Guaranteed Delivery Procedures.” We will not pay interest on subscription payments. We have provided more detailed instructions on how to exercise the rights under the heading “The Rights Offering” beginning with the section entitled “—Exercising Your Class C Rights,” in the rights certificates themselves and in the document entitled “Instructions for Use of Liberty Latin America Ltd. Class C Rights Certificates” that accompanies this prospectus and under “The Rights Offering—Delivery of Subscription Materials and Payment”. |
| Q. | How may I pay the subscription price? |
| A. | Your cash payment of the subscription price must be made by wire transfer of immediately available funds or personal check drawn upon a U.S. bank payable to the subscription agent, Computershare. Please see “The Rights Offering—Delivery of Subscription Materials and Payment.” |
| Q. | What should I do if I want to participate in the rights offering but my common shares will be held in the name of my broker or a custodian bank on the rights distribution record date? |
| A. | We will ask brokers, dealers and nominees holding our common shares on behalf of other persons to notify these persons of the rights offering. Any beneficial owner wishing to sell or exercise its Class C Rights will need to have its broker, dealer or nominee act on its behalf. Each beneficial owner should complete and return to its broker, dealer or nominee the form entitled “Beneficial Owner Election Form.” This form will be available with the other subscription materials from brokers, dealers and nominees holding our common shares on behalf of other persons on the rights distribution record date. |
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| Q. | Will I receive subscription materials by mail if my address is outside the United States? |
| A. | No. We will not mail rights certificates to any person with an address outside the United States. Instead, the subscription agent will hold rights certificates for the account of all registered foreign holders. To exercise those Class C Rights, each such holder must notify the subscription agent on or before 5:00 p.m., New York City time, on the fifth business day before the expiration time, and establish to the satisfaction of the subscription agent that it is permitted to exercise its Class C Rights under applicable law. The subscription agent will attempt to sell, if feasible, the Class C Rights held on behalf of any registered foreign holder who fails to notify the subscription agent and provide acceptable instructions to it by such time (and assuming no contrary instructions are received). The net proceeds, if any, of any such sale, reduced by any applicable tax withholding (including backup withholding), will be payable to the applicable registered foreign holder. |
| Q. | Will I be charged any fees if I exercise my rights? |
| A. | We will not charge a fee to holders for exercising their rights. However, any holder exercising its rights through a broker, dealer or nominee will be responsible for any fees charged by its broker, dealer or nominee. |
| Q. | May I transfer my Class C Rights if I do not want to purchase any shares? |
| A. | Yes. The Class C Rights being distributed to holders of our common shares are transferable, and we expect that they will begin trading on the Nasdaq Global Select Market on a “when-issued” basis on September 10, 2020 under the symbol “LILRV” and in the “regular way” on September 11, 2020 (the first trading day following the rights distribution date and the commencement date for the rights offering) under the symbol “LILAR” and will cease trading at the close of market immediately prior to the expiration time. However, we cannot assure you that a trading market for the Class C Rights will develop. |
If you wish to transfer all or a portion of your rights, you must notify the subscription agent on or before 5:00 p.m. New York City time on the fifth business day before the expiration time for the subscription agent to receive and process your transfer instructions and issue and transmit a new rights certificate to your transferee or transferees with respect to transferred Class C Rights, and to you with respect to any rights you retained.
| Q. | How may I sell my Class C Rights? |
| A. | Any holder who wishes to sell its rights should contact its broker or dealer. Any holder who wishes to sell its rights may also seek to sell the rights through the subscription agent. Each holder will be responsible for all fees associated with the sale of its rights, whether the rights are sold through its own broker or dealer or the subscription agent. We cannot assure you that any person, including the subscription agent, will be able to sell any rights on your behalf. |
If you wish to have the subscription agent seek to sell your rights, the subscription agent must receive your properly executed rights certificate (along with a properly completed and executed Internal Revenue Service Form W-8 or W-9, as applicable), with appropriate instructions, before 5:00 p.m., New York City time, on the fifth business day before the expiration time. The subscription agent is required to sell your rights only if it is able to find buyers.
Please see “The Rights Offering—Method of Transferring and Selling Class C Rights” for more information.
| Q. | Am I required to subscribe in the rights offering? |
| A. | No. However, any holder of rights who chooses not to exercise its rights will experience dilution to its equity interest in our common shares and our company. |
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| Q. | If I exercise rights in the rights offering, may I cancel or change my decision? |
| A. | No. All exercises of rights are irrevocable. |
| Q. | If I exercise my rights, when will I receive the shares for which I have subscribed? |
| A. | We will issue the Class C common shares for which subscriptions have been properly delivered to the subscription agent prior to the expiration time, as soon as practicable following the expiration time. We will not be able to begin to calculate the number of Class C common shares to be issued to each exercising rightsholder until the third business day after the expiration time, which is one business day after the date by which rights certificates may be delivered to the subscription agent under the guaranteed delivery procedures described under “The Rights Offering—Delivery of Subscription Materials and Payment—Guaranteed Delivery Procedures.” Class C common shares that you purchase in the rights offering will be listed on the Nasdaq Global Select Market. |
| Q. | Have you or your board of directors made a recommendation as to whether I should exercise or transfer my rights or how I should pay my subscription price? |
| A. | No. Neither we nor our board of directors (nor any committee thereof) has made any recommendation as to whether you should exercise or transfer your rights. You should decide whether to transfer your rights, subscribe for Class C common shares, or simply take no action with respect to your rights, based on your own assessment of your best interests. |
| Q. | What are the U.S. federal income tax consequences of the rights distribution and the rights offering to me? |
| A. | For U.S. federal income tax purposes, no gain or loss should be recognized by, and no amount should be included in the income of, U.S. holders (as defined below) of our common shares upon the receipt of Class C Rights in the rights distribution. U.S. holders who receive Class C Rights in the rights distribution generally will not recognize taxable income, gain or loss in connection with the exercise of such Class C Rights. Any U.S. holder who sells its Class C Rights prior to exercise generally will recognize gain or loss upon such sale. For a more complete summary of certain U.S. federal income tax consequences of the rights distribution and the rights offering to U.S. holders of our common shares, please see the section entitled “Certain U.S. Federal Income Tax Consequences.” |
| Q. | What are the Bermuda income tax consequences of the rights distribution and the rights offering to me? |
| A. | There is no Bermuda income tax payable by us or by shareholders who receive Class C Rights in respect of such Class C Rights. For a more complete summary of the material Bermuda income tax consequences of the rights distribution and the rights offering to holders of our common shares, please see the section entitled “Material Bermuda Tax Consequences of The Rights Distribution and The Rights Offering.” |
| Q. | What should I do if I have other questions? |
| A. | If you have questions or need assistance, please contact Innisfree M&A Incorporated, the information agent for the rights offering, at (212) 750-5833 (for banks and brokers) or (877) 750-8312 (toll free). |
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An investment in our common shares, including our Class C common shares, involves risk. You should consider carefully the risks described below relating to the rights offering, along with the information discussed under the heading “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2019, filed with the SEC on February 19, 2020, and in our Quarterly Report on Form 10-Q for the quarter ended March 31, 2020, filed with the SEC on May 5, 2020, which is incorporated by reference into this prospectus, and subsequent periodic filings we may make containing updated disclosures of such factors, together with all the other information included in this prospectus and in the documents we have incorporated by reference. The occurrence of any of the events described as possible risks could have a material adverse effect on the value of our common shares, including the Class C common shares. These risks are not the only ones facing our company. Additional risks not currently known to us or that we currently deem immaterial also may impair our business. See “Where to Find More Information.”
Factors Relating to the Rights Offering
If we abandon the rights distribution or terminate the rights offering, neither we nor the subscription agent will have any obligation to you except to return your subscription payments.
There can be no assurance that the rights distribution or the rights offering will occur, as our board of directors (or a committee thereof) may determine to abandon the rights distribution and, even after the Class C Rights have been distributed, may also determine to abandon the rights offering prior to its commencement or terminate the rights offering following its commencement at any time prior to the expiration time. However, you may not revoke any exercise of your Class C Rights. If we terminate the rights offering, neither we nor the subscription agent will have any obligation to you with respect to the Class C Rights, except to return your subscription payments, without interest or deduction. In addition, if you purchase Class C Rights on the public market and we later terminate the rights offering, you will lose the purchase price you paid for your Class C Rights.
The subscription price may not reflect the value of the Class C common shares.
Our board of directors (or a committee thereof) determined that the subscription price will represent a discount of approximately 25% to the volume weighted average trading price of our Class C common shares over the subscription price determination period (the Measurement Period VWAP). Our board of directors (or a committee thereof) is not making any recommendations regarding your exercise of Class C Rights, and we did not receive a fairness opinion from a financial advisor in determining the subscription price or the terms of the rights offering. The subscription price does not necessarily bear any relationship to the book value of Liberty Latin America’s assets, historic or future cash flows, or financial condition or recent share prices or any other established criteria for valuation, and you should not consider the subscription price as any indication of the value of the Class C common shares. You are urged to make your own decision whether or not to exercise your Class C Rights based on your own assessment of our business and the rights offering.
Shareholders who do not exercise their Class C Rights will experience dilution.
The Class C Rights will permit rightsholders to acquire an aggregate number of our Class C common shares equal to approximately 27.2% of the aggregate number of Class A common shares, Class B common shares and Class C common shares, outstanding prior to the rights distribution record date, at an approximate 25% discount to the Measurement Period VWAP. If you do not exercise your basic subscription privilege in full and the rights offering is fully subscribed and completed, you will experience material dilution in your proportionate interest in the equity ownership of our common shares and our company. If you do not exercise or sell your Class C Rights, you will relinquish any value inherent in the Class C Rights.
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There will not be a prior public market for the Class C Rights, and we cannot assure you that a trading market will develop for the Class C Rights.
There will not be any public market for the trading of Class C Rights prior to the rights distribution, other than one expected day of when-issued trading on the rights distribution date. There can be no assurance that an active trading market will develop or be sustained for the Class C Rights following the rights distribution. We cannot predict the prices at which the Class C Rights may trade after the rights distribution or the effect of the rights distribution on the trading prices of our Class A, Class B and Class C common shares.
There may be unexpected delays in mail processing times as a result of the COVID-19 pandemic and if you do not act on a timely basis and follow subscription instructions, your exercise of rights may be rejected.
If you wish to exercise your Class C Rights in this rights offering, you must act on a timely basis to ensure that all required forms and payments are actually received by the subscription agent prior to the expiration time, unless extended. You are responsible for the method of delivery of rights certificates, any necessary accompanying documents and payment of the subscription price to the subscription agent. If you fail to complete and sign the required subscription forms, send an incorrect payment amount, or otherwise fail to follow the subscription procedures that apply to your exercise in this offering, the subscription agent may, depending on the circumstances, reject your subscription or accept it only to the extent of the payment received. In addition, there may be unexpected delays in mail processing times as a result of the COVID-19 pandemic. You should allow a sufficient number of days to ensure delivery to the subscription agent and clearance of any payment by uncertified personal check prior to the expiration time. Neither we nor the subscription agent undertakes to contact you concerning an incomplete or incorrect subscription form or payment, nor are we under any obligation to correct such forms or payment. We have the sole discretion to determine whether a subscription exercise properly follows the subscription procedures.
The receipt of Class C Rights may be treated as a taxable distribution to you.
The U.S. federal income tax consequences of the rights distribution and the rights offering will depend on whether the rights distribution or the rights offering is part of a “disproportionate distribution” within the meaning of the Code (as defined below in the section entitled “Certain U.S. Federal Income Tax Consequences”). We intend to take the position that the Class C Rights issued pursuant to the rights distribution and the rights offering (a) are not part of a “disproportionate distribution” and (b) are not a taxable distribution with respect to your existing Class A, Class B or Class C common shares. The disproportionate distribution rules are complicated, however, and their application is uncertain. Accordingly, it is possible that the IRS could successfully challenge our position. For a more complete summary of certain U.S. federal income tax consequences of the rights distribution and the rights offering to U.S. holders (as defined below) of our common shares, please see the section entitled “Certain U.S. Federal Income Tax Consequences.”
We may be classified as a passive foreign investment company, or PFIC, which could result in adverse U.S. federal income tax consequences for U.S. holders.
In general, a non-U.S. entity treated as a corporation for U.S. federal income tax purposes will be treated as a PFIC (as defined below) in a particular taxable year if either (1) at least 75% of its gross income for the taxable year is “passive” income, or (2) at least 50% of the average value of its assets held during the taxable year is attributable to assets that produce, or are held for the production of, passive income, subject to certain special rules. For this purpose, a non-U.S. corporation is treated as owning directly its proportionate share of the assets and receiving directly its proportionate share of the income of any other corporation in which it owns, directly or indirectly, at least 25% (by value) of the stock.
Based on our business and operations and the business and operations of our subsidiaries, we believe we were not a PFIC for 2019, and we do not expect to be treated as a PFIC for the current taxable year or for
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foreseeable future taxable years. No assurance can be given, however, that the IRS, or a court of law, will accept our position. Further, the determination of whether we are a PFIC in any taxable year is a factual determination made on an annual basis after the close of such taxable year, and our status may change if there are changes in our or our subsidiaries’ assets, income or operations. Accordingly, there can be no assurance that we will not be considered a PFIC for the current taxable year or any future taxable year.
If we are treated as a PFIC for any taxable year in which a U.S. holder (as defined below) is treated as holding our shares (including, under proposed Treasury Regulations, the Class C Rights) for U.S. federal income tax purposes, certain adverse U.S. federal income tax consequences could apply to the U.S. holder. For a more complete summary of certain U.S. federal income tax consequences to U.S. holders, please see the section entitled “Certain U.S. Federal Income Tax Consequences.”
We may have exposure to additional tax liabilities.
We are subject to income taxes as well as non-income based taxes in the U.S., the U.K., the Caribbean and parts of Latin America. In addition, most tax jurisdictions that we operate in have complex and subjective rules regarding the valuation of intercompany services, cross-border payments between affiliated companies and the related effects on income tax and transfer tax. Significant judgment is required in determining our provision for income taxes and other tax liabilities. In the ordinary course of our business, there are many transactions and calculations where the ultimate tax determination is uncertain. In addition, our business has undertaken acquisitions, restructurings and other transactions in prior years where the ultimate tax determination resulting from these transactions remains uncertain. We are regularly under audit by tax authorities in many of the jurisdictions in which we operate. Although we believe that our tax estimates are reasonable, any material differences as a result of final determinations of tax audits or tax disputes could have an adverse effect on our financial position and results of operations in the period or periods for which determination is made.
We are subject to changing tax laws, treaties and regulations in and between countries in which we operate or otherwise have a presence. Also, various income tax proposals in the jurisdictions in which we operate could result in changes to the existing laws on which our deferred taxes are calculated. A change in these tax laws, treaties or regulations, or in the interpretation thereof, could result in a materially higher income or non-income tax expense. Any such material changes could cause a material change in our effective tax rate.
Further changes in the tax laws of the foreign jurisdictions in which we operate could arise as a result of the base erosion and profit shifting project being undertaken by the Organization for Economic Cooperation and Development (OECD). The OECD, which represents a coalition of member countries that includes Chile and the United States, has undertaken studies and is publishing action plans that include recommendations aimed at addressing what they believe are issues within tax systems that may lead to tax avoidance by companies. The OECD has extended inclusion to non-OECD countries under their Inclusive Framework on Base Erosion and Profit Shifting (BEPS), bringing together over 100 countries to collaborate on the implementation of the OECD BEPS Package. This framework allows interested countries and jurisdictions to work with the OECD and G20 members on developing standards on BEPS-related issues and reviewing and monitoring the implementation of the whole BEPS Package. Included within this expanded group of countries are several jurisdictions in which we do business. It is possible that additional jurisdictions in which we do business could react to these initiatives or their own concerns by enacting tax legislation that could adversely affect us or our shareholders through increasing our tax liabilities.
Bermuda recently enacted the Economic Substance Act 2018 requiring affected Bermuda registered companies to maintain a substantial economic presence in Bermuda. This legislation could require us to incur substantial additional cost, and/or incur significant penalties and possibly require us to re-domicile our company to a jurisdiction with higher tax rates. Our results of operations could be materially and adversely affected if we become subject to these or other unanticipated tax liabilities.
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CAUTIONARY STATEMENTS REGARDING FORWARD-LOOKING STATEMENTS
Certain statements in this prospectus and in the documents incorporated by reference herein constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. To the extent that statements in this prospectus and in the documents incorporated by reference herein are not recitations of historical fact, such statements constitute forward-looking statements, which, by definition, involve risks and uncertainties that could cause actual results to differ materially from those expressed or implied by such statements. In particular, statements regarding: our business, product, foreign currency and finance strategies; subscriber growth and retention rates; changes in competitive, regulatory and economic factors; anticipated changes in our revenue, expenses or growth rates; debt levels; our liquidity and our ability to access the liquidity of our subsidiaries; credit risks; internal control over financial reporting; foreign currency risks; interest rate risks; compliance with debt, financial and other covenants; our future projected contractual commitments and cash flows; the AT&T Acquisition, including financing plans, the expected closing date, and the potential risks associated with such acquisition; the Telefonica-Costa Rica Acquisition, including the expected closing date; the effects and potential impacts of COVID-19 on our business and results of operations; reductions in operating and capital costs; the remediation of material weaknesses; our share repurchase plan; the intentions of John C. Malone, Searchlight Capital Partners L.P., directors and senior management as to whether to participate in the offering; and other information and statements that are not historical fact. Where, in any forward-looking statement, we express an expectation or belief as to future results or events, such expectation or belief is expressed in good faith and believed to have a reasonable basis, but there can be no assurance that the expectation or belief will result or be achieved or accomplished. In evaluating these statements, you should consider the following list of some but not all of the factors that could cause actual results or events to differ materially from anticipated results or events:
| • | economic and business conditions and industry trends in the countries in which we operate; |
| • | the competitive environment in the industries in the countries in which we operate, including competitor responses to our products and services; |
| • | fluctuations in currency exchange rates, inflation rates and interest rates; |
| • | instability in global financial markets, including sovereign debt issues and related fiscal reforms; |
| • | consumer disposable income and spending levels, including the availability and amount of individual consumer debt; |
| • | changes in consumer viewing preferences and habits, including on mobile devices that function on various operating systems and specifications, limited bandwidth, and different processing power and screen sizes; |
| • | customer acceptance of our existing service offerings, including our video, broadband internet, fixed-line telephony, mobile and business service offerings, and of new technology, programming alternatives and other products and services that we may offer in the future; |
| • | our ability to manage rapid technological changes; |
| • | the impact of 5G and wireless technologies on broadband internet; |
| • | our ability to maintain or increase the number of subscriptions to our video, broadband internet, fixed-line telephony and mobile service offerings and our average revenue per household; |
| • | our ability to provide satisfactory customer service, including support for new and evolving products and services; |
| • | our ability to maintain or increase rates to our subscribers or to pass through increased costs to our subscribers; |
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| • | the impact of our future financial performance, or market conditions generally, on the availability, terms and deployment of capital; |
| • | changes in, or failure or inability to comply with, government regulations in the countries in which we operate and adverse outcomes from regulatory proceedings; |
| • | government intervention that requires opening our broadband distribution networks to competitors; |
| • | our ability to obtain regulatory approval and satisfy other conditions necessary to close acquisitions and dispositions, and the impact of conditions imposed by competition and other regulatory authorities in connection with acquisitions, such as the AT&T Acquisition and the Telefonica-Costa Rica Acquisition; |
| • | our ability to successfully acquire new businesses and, if acquired, to integrate, realize anticipated efficiencies from and implement our business plan with respect to the businesses we have acquired or that we expect to acquire, such as with respect to the AT&T Acquisition and the Telefonica-Costa Rica Acquisition; |
| • | changes in laws or treaties relating to taxation, or the interpretation thereof, in the U.S. or in other countries in which we operate; |
| • | changes in laws and government regulations that may impact the availability and cost of capital and the derivative instruments that hedge certain of our financial risks; |
| • | the ability of suppliers and vendors, including third-party channel providers and broadcasters (including our third-party wireless network provider under our MVNO arrangement), to timely deliver quality products, equipment, software, services and access; |
| • | the availability of attractive programming for our video services and the costs associated with such programming, including retransmission and copyright fees payable to public and private broadcasters; |
| • | uncertainties inherent in the development and integration of new business lines and business strategies; |
| • | our ability to adequately forecast and plan future network requirements, including the costs and benefits associated with our network extension and upgrade programs; |
| • | the availability of capital for the acquisition and/or development of telecommunications networks and services, including property and equipment additions; |
| • | problems we may discover post-closing with the operations, including the internal controls and financial reporting process, of businesses we acquire, such as with respect to the AT&T Acquisition and the Telefonica-Costa Rica Acquisition; |
| • | piracy, targeted vandalism against our networks, and cybersecurity threats or other security breaches, including the leakage of sensitive customer data, which could harm our business or reputation; |
| • | the outcome of any pending or threatened litigation, including the VTR class actions; |
| • | the loss of key employees and the availability of qualified personnel; |
| • | changes in the nature of key strategic relationships with partners and joint venturers; |
| • | our equity capital structure; |
| • | changes in and compliance with applicable data privacy laws, rules, and regulations; |
| • | our ability to recoup insurance reimbursements and settlements from third-party providers; |
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| • | our ability to comply with economic and trade sanctions laws, such as the U.S. Treasury Department’s Office of Foreign Assets Control; and |
| • | events that are outside of our control, such as political conditions and unrest in international markets, terrorist attacks, malicious human acts, hurricanes and other natural disasters, pandemics, including the COVID-19 pandemic, and other similar events. |
The broadband distribution and mobile service industries are changing rapidly and, therefore, the forward-looking statements of expectations, plans and intent in this prospectus and in the documents incorporated by reference herein are subject to a significant degree of risk. These forward-looking statements and the above described risks, uncertainties and other factors speak only as of the date of this prospectus (or, as to documents incorporated by reference, the date of such documents), and we expressly disclaim any obligation or undertaking to disseminate any updates or revisions to any forward-looking statement contained herein, to reflect any change in our expectations with regard thereto, or any other change in events, conditions or circumstances on which any such statement is based, except as required by applicable federal securities laws. Readers are cautioned not to place undue reliance on any forward-looking statement. When considering such forward-looking statements, you should keep in mind the factors described in “Risk Factors” and other cautionary statements contained or incorporated in this document. Such risk factors and statements describe circumstances which could cause actual results to differ materially from those contained in any forward-looking statement.
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General
Our board of directors (or a committee thereof) has determined that, subject to the satisfaction of all conditions to the rights distribution, on the rights distribution date, holders of our common shares will receive 0.2690 of a Class C Right for each Class A common share held by such holder, 0.2690 of a Class C Right for each Class B common share held by such holder, and 0.2690 of a Class C Right for each Class C common share held by such holder, in each case, on the rights distribution record date. The total number of Class C Rights to be issued to each shareholder will be rounded up to the nearest whole number (after taking into account the aggregate number of Class C Rights each shareholder would otherwise be entitled to receive in respect of the aggregate number of common shares held of record by such shareholder, in the aggregate as a result of the rights offering). Such rounding will be made with respect to each beneficial shareholder.
Each Class C Right entitles the holder to a basic subscription privilege and an oversubscription privilege. Under the basic subscription privilege, each whole Class C Right entitles the holder to purchase one Class C common share at a subscription price of $7.14, which is equal to an approximate 25% discount to the Measurement Period VWAP. Each Class C Right also has an oversubscription privilege, as described below under the heading “—Subscription Privileges—Oversubscription Privilege.”
The following describes the rights offering in general and assumes (unless specifically provided otherwise) that you were a holder of our common shares as of the rights distribution record date. If you held your common shares in a brokerage account or through a dealer or other nominee as of the rights distribution record date, please see the information included below under the heading “—Delivery of Subscription Materials and Payment—Beneficial Owners.” As used in this prospectus, the term “business day” means any day on which securities may be traded on the Nasdaq Global Select Market.
You are responsible for the method of delivery of rights certificates, any necessary accompanying documents and payment of the subscription price to the subscription agent. If you send the rights certificates and other items by mail, we recommend that you send them by registered mail, properly insured, with return receipt requested. There may be unexpected delays in mail processing times as a result of the COVID-19 pandemic. You should allow a sufficient number of days to ensure delivery to the subscription agent and clearance of any payment by uncertified check prior to the expiration time.
Reasons for the Rights Offering
We are conducting the rights offering in order to raise capital to finance acquisitions, including the recently announced Telefonica-Costa Rica Acquisition, and for general corporate purposes. See “Use of Proceeds.”
Conditions to the Rights Distribution
The rights distribution is subject to the satisfaction of the following conditions:
| • | the effectiveness under the Securities Act of the Registration Statement on Form S-3, of which this prospectus forms a part; |
| • | the approval of Nasdaq for the listing of our Class C Rights; and |
| • | our board of directors (or a committee thereof) shall not have revoked the rights distribution prior to the rights distribution date. |
Trading Prior to the Ex-Dividend Date
The record date for the rights distribution is 5:00 p.m., New York City time, on September 8, 2020. After the rights distribution record date and prior to the ex-dividend date for the rights offering, our Class A, Class B
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and Class C common shares will trade or quote, as applicable, with an entitlement to receive Class C Rights. If you were a holder of our Class A, Class B or Class C common shares on the rights distribution record date, you would be entitled to receive the Class C Rights issuable in respect of those shares only if you continue to hold them through the rights distribution date, which is 5:00 p.m., New York City time, on September 10, 2020.
Determination of Subscription Price and Distribution Ratio
We determined the subscription price and the number of Class C Rights to distribute based on, among other things, the market price of our Class C common shares, discounts used in similar rights offerings, the general conditions of the securities markets and the amount of proceeds, after any deductions for expenses related to the rights offering, we wish to raise.
No Fractional Class C Rights
We will not issue or pay cash in lieu of fractional Class C Rights. Instead, the total number of Class C Rights to be issued to you will be rounded up to the nearest whole number (after taking into account the aggregate number of Class C Rights you would otherwise be entitled to receive in respect of the aggregate number of common shares held of record by you as a result of the rights offering). Such rounding will be made with respect to each beneficial shareholder. For example, if you hold 50 Class A common shares and 50 Class C common shares on the rights distribution record date, after aggregating your holdings of common shares of each class, you will receive, on the rights distribution date, 27 Class C Rights instead of the 26.9 Class C Rights you would have received without rounding as described herein.
You may request that the subscription agent divide your rights certificate into transferable parts if you are the record holder for a number of beneficial owners of common shares. However, the subscription agent will not divide your rights certificate such that (through rounding or otherwise) you would receive a greater number of Class C Rights than those to which you would be entitled if you had not divided your certificates.
Commencement of the Rights Offering
The rights offering will commence on September 11, 2020.
Expiration Time
You may exercise the basic subscription privilege and the oversubscription privilege at any time before the expiration time, which is 5:00 p.m., New York City time, on September 25, 2020, which will be the eleventh trading day following the commencement of the rights offering, unless the rights offering is extended. Any Class C Rights not exercised before the expiration time will expire and become null and void. We will not be obligated to honor your exercise of Class C Rights if the subscription agent receives any of the required documents relating to your exercise after the expiration time, regardless of when you transmitted the documents, unless you have timely transmitted the documents pursuant to the guaranteed delivery procedures described below.
We may extend the expiration time for any reason. However, we do not intend to extend the expiration time of the rights offering for more than 25 trading days past the original eleven trading day period. If we do not complete the rights offering by the eleventh trading day of the subscription period and the expiration time has not been extended beyond such date, we will cause the subscription agent to return to each exercising holder the entirety of such holder’s aggregate subscription price previously paid (without interest).
If we elect to extend the date the Class C Rights expire, we will issue a press release announcing the extension before 9:00 a.m., New York City time, on the first business day after the most recently announced expiration time.
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Subscription Privileges
The Class C Rights entitle you to a basic subscription privilege and an oversubscription privilege.
Basic Subscription Privilege. The basic subscription privilege entitles you to purchase one Class C common share per whole right, upon delivery of the required documents and payment of the subscription price per share, prior to the expiration time. You are not required to exercise your basic subscription privilege, in full or in part, unless you wish to also purchase shares under your oversubscription privilege described below.
Oversubscription Privilege. The Class C Rights include an oversubscription privilege relating to our Class C common shares. The oversubscription privilege entitles record date shareholders to purchase up to that number of Class C common shares offered in the rights offering which are not purchased by other rightsholders pursuant to their basic subscription privilege, upon delivery of the required documents and payment of the subscription price per share prior to the expiration time. You will be permitted to purchase Class C common shares pursuant to your oversubscription privilege only if other holders of Class C Rights do not exercise their basic subscription privilege in full. You may exercise your oversubscription privilege with respect to our Class C common shares only if you exercise your basic subscription privilege in full. If you wish to exercise your oversubscription privilege, you must specify the number of additional shares you wish to purchase, which may be up to the maximum number of Class C common shares offered in the rights offering, less the number of shares you may purchase under your basic subscription privilege. Only record date shareholders who exercise in full all rights issued to them are entitled to exercise the oversubscription privilege.
Pro Rata Allocation. If there are not enough Class C common shares to satisfy all subscriptions pursuant to the exercise of the oversubscription privilege, we will allocate the shares that are available for purchase under the oversubscription privilege pro rata (subject to the elimination of fractional shares) among those rightsholders who exercise their oversubscription privilege. Pro rata means in proportion to the number of Class C common shares that you and the other holders of rights have purchased pursuant to the exercise of the basic subscription privilege. If there is a need to prorate the exercise of rights pursuant to the oversubscription privilege and the proration results in the allocation to you of a greater number of shares than you subscribed for pursuant to the oversubscription privilege, then we will allocate to you only the number of shares for which you subscribed pursuant to your basic and oversubscription privileges. We will allocate the remaining shares among all other rightsholders exercising their oversubscription privileges relating to our Class C common shares. You may not exercise your oversubscription privilege if you transfer all or a portion of your rights.
Full Exercise of Basic Subscription Privilege. You may exercise your oversubscription privilege relating to our Class C common shares only if you exercise, in full, your basic subscription privilege represented by a single rights certificate. To determine if you have fully exercised your basic subscription privilege, we will consider only the basic subscription privilege held by you in the same capacity under a single rights certificate. For example, if you were granted rights under a single Class C Rights certificate for Class C common shares you own individually and rights under a single Class C Rights certificate for Class C common shares you own jointly with your spouse, you only need to fully exercise your basic subscription privilege with respect to your individually owned rights in order to exercise your oversubscription privilege with respect to those rights. You do not have to subscribe for any shares under the basic subscription privilege owned jointly with your spouse to exercise your individual oversubscription privilege.
You must exercise your oversubscription privilege at the same time as you exercise your basic subscription privilege in full.
If you own your common shares through your broker, dealer or other nominee holder and you wish for them to exercise your oversubscription privilege on your behalf, the nominee holder will be required to certify to us and the subscription agent:
| • | the class and number of Liberty Latin America common shares held on the rights distribution record date on your behalf; |
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| • | the number of Class C Rights you exercised under your basic subscription privilege; |
| • | that your entire basic subscription privilege held in the same capacity has been exercised in full; and |
| • | the number of Class C common shares you subscribed for pursuant to the oversubscription privilege. |
Your nominee holder must also disclose to us certain other information received from you.
Return of Excess Payment. If you exercise your oversubscription privilege and are allocated less than all of the Class C common shares for which you subscribed, the funds you paid for those Class C common shares that are not allocated to you will be returned by mail or similarly prompt means, without interest or deduction, as soon as practicable after the expiration time.
Exercising Your Class C Rights
Subscription materials, including rights certificates, will be made available to holders upon the commencement of the rights offering. You may exercise your Class C Rights by delivering the following to the subscription agent before the expiration time:
| • | your properly completed and executed rights certificate evidencing the exercised Class C Rights with any required signature guarantees or other supplemental documentation; and |
| • | your payment in full of the subscription price for each Class C common share subscribed for pursuant to the basic subscription privilege and the oversubscription privilege. |
Alternatively, if you deliver a notice of guaranteed delivery together with your subscription price payment prior to the expiration time, you must deliver the rights certificate within two business days after the delivery of such notice of guaranteed delivery using the guaranteed delivery procedures described below under the heading “—Delivery of Subscription Materials and Payment—Guaranteed Delivery Procedures.” You must, in any event, provide payment in full of the subscription price for each Class C common share being subscribed for pursuant to the basic subscription privilege and the oversubscription privilege to the subscription agent before the expiration time.
Payment of Subscription Price. Your cash payment of the subscription price must be made by wire transfer of immediately available funds or personal check drawn upon a U.S. bank payable to the subscription agent, “Computershare.” Your payment of the subscription price will be deemed to have been received by the subscription agent only when:
| • | any personal check clears; or |
| • | the subscription agent receives a wire transfer of immediately available funds |
You should note that funds paid by personal checks may take five business days or more to clear. If you wish to pay the subscription price in respect of your basic subscription privilege and oversubscription privilege by an personal check, we urge you to make payment sufficiently in advance of the time the rights expire to ensure that your payment is received and clears by that time. We urge you to consider using a wire transfer of immediately available funds in order to avoid missing the opportunity to exercise your rights.
You will not be entitled to any interest earned on the cash funds held by the subscription agent.
The subscription agent will hold your payment of the subscription price in a segregated account with other payments received from holders of rights until we issue to you your Class C common shares, or return your overpayment, if any.
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Exercising a Portion of Your Class C Rights. If you subscribe for fewer than all of the Class C common shares that you are eligible to purchase pursuant to the basic subscription privilege represented by your rights certificate, you may, under certain circumstances, request the subscription agent to attempt to sell your unused rights. See “—Method of Transferring and Selling Class C Rights” below. Alternatively, you may transfer a portion of your rights and request from the subscription agent a new rights certificate representing the rights you did not transfer. If you exercise less than all of your rights represented by a single rights certificate, you may not exercise the oversubscription privilege.
Calculation of Rights Exercised. If you do not indicate the number of rights being exercised, or do not forward full payment of the aggregate subscription price for the number of rights that you indicate are being exercised, then you will be deemed to have exercised the basic subscription privilege with respect to the maximum number of rights that may be exercised for the aggregate subscription price payment you delivered to the subscription agent. If your aggregate subscription price payment is greater than the amount you owe for your basic subscription and no direction is given as to the excess, you will be deemed to have exercised the oversubscription privilege to purchase the maximum number of shares available to you pursuant to your oversubscription privilege that may be purchased with your overpayment. If we do not apply your full subscription price payment to your purchase of Class C common shares, we will return the excess amount to you by mail or similarly prompt means, without interest or deduction as soon as practicable after the expiration time.
Instructions for Completing the Rights Certificate. You should read and follow the instructions accompanying the rights certificate carefully. If you want to exercise your rights, you must send your completed rights certificates, any necessary accompanying documents and payment of the subscription price to the subscription agent. You should not send the rights certificates, any other documentation or payment to us. Any rights certificates and other items received by us will be returned to the sender as promptly as possible.
You are responsible for the method of delivery of rights certificates, any necessary accompanying documents and payment of the subscription price to the subscription agent. If you send the rights certificates and other items by mail, we recommend that you send them by registered mail, properly insured, with return receipt requested. There may be unexpected delays in mail processing times as a result of the COVID-19 pandemic. You should allow a sufficient number of days to ensure delivery to the subscription agent and clearance of any payment by uncertified check prior to the expiration time.
Signature Guarantee May Be Required. Your signature on each rights certificate must be guaranteed by an eligible institution such as a member firm of a registered national securities exchange, a member of the National Association of Securities Dealers, Inc. or a commercial bank or trust company having an office or correspondent in the United States, subject to standards and procedures adopted by the subscription agent, unless:
| • | your rights certificate is registered in your name; or |
| • | you are an eligible institution. |
Delivery of Subscription Materials and Payment
You should deliver the rights certificate and payment of the subscription price, as well as any notices of guaranteed delivery and any other required documentation:
If delivering by first class mail:
Computershare, N.A.
Attn: Voluntary Corporate Actions
P.O. Box 43011
Providence, RI 02940-3011
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If delivering by registered, certified or express mail, or overnight courier:
Computershare, N.A.
Attn: Voluntary Corporate Actions
150 Royall Street, Suite V
Canton, MA 02021
If sending payment of subscription price by wire of immediately available funds:
Bank of America
ABA Number 026009593
DDA 4426226480
Account Name CINC AAF Rights Offering A
SWIFT BOFAUS3N
Reference Line LILA Rights Offering and your 11 digit Computershare Account Number
If you do not include your 11 digit Computershare Account Number in the reference line of your wire we will not be able to match your wire to your Rights Exercise and your Rights Exercise would not be accepted into this offer.
In considering which method of delivery to use, holders of rights should take into consideration the amount of time remaining in the rights offering, as well as any guaranteed delivery procedures, to ensure that materials are delivered prior to the expiration of the rights offering.
Guaranteed Delivery Procedures. If you wish to exercise your rights, but you do not have sufficient time to deliver the rights certificates evidencing your rights to the subscription agent before the expiration time, you may exercise your rights by the following guaranteed delivery procedures:
| • | provide your payment in full of the subscription price for each Class C common share being subscribed for pursuant to the basic subscription privilege and the oversubscription privilege to the subscription agent before the expiration time; |
| • | deliver a notice of guaranteed delivery to the subscription agent at or before the expiration time; and |
| • | deliver the properly completed rights certificate evidencing the Class C Rights being exercised, with any required signatures. |
Your notice of guaranteed delivery must be substantially in the form provided with the “Instructions For Use of Liberty Latin America Ltd. Class C Rights Certificates” distributed to you with your rights certificate. Your notice of guaranteed delivery must come from an eligible institution which is a member of, or a participant in, a signature guarantee program acceptable to the subscription agent. In your notice of guaranteed delivery you must state:
| • | your name; |
| • | the number of Class C Rights represented by your rights certificates, the number of Class C common shares you are subscribing for pursuant to the basic subscription privilege, and the number of Class C common shares, if any, you are subscribing for pursuant to the oversubscription privilege; and |
| • | your guarantee that you will deliver to the subscription agent any rights certificates evidencing the Class C Rights you are exercising within two business days following the date the subscription agent receives your notice of guaranteed delivery. |
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You may deliver the notice of guaranteed delivery to the subscription agent in the same manner as the rights certificate at the addresses set forth under “—Delivery of Subscription Materials and Payment” above.
The information agent will send you additional copies of the form of notice of guaranteed delivery if you need them. Please call the information agent at the numbers noted below under “—Information Agent”.
Notices to Nominees. If you are a broker, a dealer, a trustee or a depositary for securities who will hold our common shares for the account of others as a nominee holder and thus will hold Class C Rights for the account of others as a nominee holder, you should notify the respective beneficial owners of those shares of the issuance of the Class C Rights as soon as possible to find out the beneficial owners’ intentions.
You should obtain instructions from the beneficial owner with respect to the rights, as set forth in the instructions we have provided to you for your distribution to beneficial owners. If the beneficial owner so instructs, you should complete the appropriate rights certificates and submit them to the subscription agent with the proper payment. A nominee holder that holds shares for the account(s) of more than one beneficial owner may exercise the number of rights to which all such beneficial owners in the aggregate otherwise would have been entitled if they had been direct record holders of our common shares on the rights distribution record date, so long as the nominee submits the appropriate rights certificates and proper payment to the subscription agent.
Beneficial Owners. If you will be a beneficial owner of our common shares and thus will be a beneficial owner of our Class C Rights that you hold through a nominee holder following the rights distribution, we will ask your broker, dealer or other nominee to notify you of this rights offering. If you wish to sell or exercise your rights, you will need to have your broker, dealer or other nominee act for you. To indicate your decision with respect to your Class C Rights, you should complete and return to your broker, dealer or other nominee the form entitled “Beneficial Owner Election Form.” You should receive this form from your broker, dealer or other nominee with the other subscription materials.
Procedures for DTC Participants. If you will be a broker, a dealer, a trustee or a depositary for securities who holds our common shares for the account of others as a nominee holder and thus will hold Class C Rights for the account of others as a nominee holder, you may, upon proper showing to the subscription agent, exercise your beneficial owners’ basic and oversubscription privileges through DTC. Any rights exercised through DTC are referred to as DTC Exercised Rights. You may exercise your DTC Exercised Rights through DTC’s PSOP Function on the “agents subscription over PTS” procedures and instructing DTC to charge the applicable DTC account for the subscription payment and to deliver such amount to the subscription agent. DTC must receive the subscription instructions and payment for the new shares by the expiration time unless guaranteed delivery procedures are utilized, as described above.
Determinations Regarding the Exercise of Class C Rights. We will decide all questions concerning the timeliness, validity, form and eligibility of your exercise of rights. Our decisions will be final and binding. We, in our sole discretion, may waive any defect or irregularity, or permit a defect or irregularity to be corrected within whatever time we determine. We may reject the exercise of any of your rights because of any defect or irregularity. Your subscription will not be deemed to have been received or accepted until all irregularities have been waived by us or cured by you within the time we decide, in our sole discretion.
We reserve the right to reject your exercise of rights if your exercise is not in accordance with the terms of the rights offering or in proper form. Neither we nor the subscription agent will have any duty to notify you of a defect or irregularity in your exercise of the rights. We will not be liable for failing to give you that notice. We will also not accept your exercise of rights if our issuance of Class C common shares pursuant to your exercise could be deemed unlawful or materially burdensome. See “—Regulatory Limitation” and “—Compliance with State Regulations Pertaining to the Rights Offering” below.
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Revocation of Exercised Class C Rights
Once you have exercised your basic subscription privilege and, should you choose, your oversubscription privilege, you may not revoke your exercise.
Subscription Agent
We have appointed Computershare, N.A. as subscription agent for the rights offering. We will pay its fees and expenses related to the rights offering.
Information Agent
You may direct any questions or requests for assistance concerning the method of exercising your Class C Rights, additional copies of this prospectus, the instructions, the notice of guaranteed delivery or other subscription materials referred to herein, to the information agent, at the following telephone number and address:
Innisfree M&A Incorporated
Banks and brokers call collect: (212) 750-5833
All others call toll free: 877-750-8312
Dealer Manager
J.P. Morgan Securities LLC will act as dealer manager for this rights offering. Under the terms and subject to the conditions contained in the dealer manager agreement, the dealer manager will provide marketing services in connection with this rights offering and will solicit the exercise of rights and participation in the over-subscription privilege. This offer is not contingent upon any number of rights being exercised. We have agreed to pay the dealer manager a fee for its marketing and soliciting services. See “Plan of Distribution.”
Method of Transferring and Selling Class C Rights
We expect to list the Class C Rights on the Nasdaq Global Select Market on a “when-issued” basis on September 10, 2020 under the symbol “LILRV” and in the “regular way” on September 11, 2020 (the first trading day following the rights distribution date and the commencement date for the rights offering) under the symbol “LILAR.” We expect that Class C Rights may be purchased or sold through usual investment channels until the close of business on the last trading day preceding the expiration time. However, there will not be a public market for the Class C Rights prior to the rights distribution date, other than one expected day of when-issued trading on the rights distribution date. There can be no assurance that an active trading market will develop or be sustained for the Class C Rights following the rights distribution. We also cannot assure you of the prices at which the Class C Rights will trade, if at all. If you do not exercise or sell your Class C Rights you will lose any value inherent in the Class C Rights. See “—General Considerations Regarding the Partial Exercise, Transfer or Sale of Class C Rights” below.
Transfer of Class C Rights. You may transfer Class C Rights in whole by endorsing the rights certificate for transfer. Please follow the instructions for transfer included in the information sent to you with your rights certificate. If you wish to transfer only a portion of the rights, you should deliver your properly endorsed rights certificate to the subscription agent. With your rights certificate, you should include instructions to register such portion of the rights evidenced thereby in the name of the transferee (and to issue a new rights certificate to the transferee evidencing such transferred rights). You may only transfer whole rights and not fractions of a right. If there is sufficient time before the expiration of the rights offering, the subscription agent will send you a new rights certificate evidencing the balance of the rights issued to you but not transferred to the transferee. You may also instruct the subscription agent to send the rights certificate to one or more additional transferees. If you wish
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to sell your remaining rights, you may request that the subscription agent send you certificates representing your remaining (whole) rights so that you may sell them through your broker or dealer. You may also request that the subscription agent sell your rights for you, as described below.
If you wish to transfer all or a portion of your rights, you must notify the subscription agent on or before 5:00 p.m. New York City time on the fifth business day before the expiration time for the subscription agent to:
| • | receive and process your transfer instructions; and |
| • | issue and transmit a new rights certificate to your transferee or transferees with respect to transferred Class C Rights, and to you with respect to any rights you retained. |
If you wish to transfer your rights to any person other than a bank or broker, the signatures on your rights certificate must be guaranteed by an eligible institution.
Sales of Class C Rights Through the Subscription Agent. If you choose not to sell your rights through your broker or dealer, you may seek to sell your rights through the subscription agent. If you wish to have the subscription agent seek to sell your rights, you must deliver your properly executed rights certificate, with appropriate instructions, and a properly completed and executed Internal Revenue Service Form W-8 or W-9, as applicable, to the subscription agent. If you want the subscription agent to seek to sell only a portion of your rights, you must send the subscription agent instructions setting forth what you would like done with the rights, along with your rights certificate and a properly completed and executed Internal Revenue Service Form W-8 or W-9, as applicable.
If the subscription agent sells rights for you, it will send you a check for the net proceeds from the sale of any of your rights, reduced by any applicable tax withholding (including backup withholding), as soon as practicable after the expiration time. If your rights can be sold, the sale will be deemed to have been made at the weighted average net sale price of all rights sold by the subscription agent. The aggregate fees charged by the subscription agent for selling rights will be deducted from the aggregate sale price for all such rights in determining the weighted average net sale price of all such rights. We cannot assure you, however, that a market will develop for the Class C Rights, or that the subscription agent will be able to sell your Class C Rights.
The subscription agent must have received your order to sell your rights before 5:00 p.m., New York City time, on the fifth business day before the expiration time. If less than all sales orders received by the subscription agent are filled, it will prorate the sales proceeds among you and the other holders of rights based on the number of rights that each holder has instructed the subscription agent to sell during that period, irrespective of when during the period the instructions are received by it. The subscription agent is required to sell your rights only if it is able to find buyers.
If you sell your rights through your broker or dealer, you will likely receive a different amount of proceeds than if you sell the same amount of rights through the subscription agent. If you sell your rights through your broker or dealer instead of the subscription agent, your sales proceeds will be the actual sales price of your rights rather than the weighted average sales price described above.
General Considerations Regarding the Partial Exercise, Transfer or Sale of Class C Rights
The amount of time needed by your transferee to exercise or sell its rights depends upon the method by which the transferor delivers the rights certificates, the method of payment made by the transferee and the number of transactions which the holder instructs the subscription agent to effect. You should also allow up to ten business days for your transferee to exercise or sell the rights transferred to it. Neither we nor the subscription agent will be liable to a transferee or transferor of rights if rights certificates or any other required documents are not received in time for exercise or sale prior to the expiration time.
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You are responsible for all commissions, fees and other expenses (including brokerage commissions and transfer taxes) incurred in connection with the purchase, sale or exercise of your rights, except that we will pay any fees of the subscription agent associated with the exercise of rights. Any amounts you owe will be deducted from your account.
If you do not exercise your Class C Rights before the expiration time, your Class C Rights will expire and will no longer be exercisable.
Treatment of Share Appreciation Rights and Other Awards
Holders of share appreciation rights to purchase Liberty Latin America common shares, regardless of class, on the rights distribution record date will not receive Class C Rights, unless they have exercised their share appreciation rights to receive common shares prior to the rights distribution record date. Similarly, holders of restricted share units, including performance-based restricted share units, with respect to Liberty Latin America common shares, regardless of class, on the rights distribution record date will not receive Class C Rights, unless their restricted share units are settled for common shares prior to the rights distribution record date. In lieu of receiving any Class C Rights, holders of such share appreciation rights and restricted share units are expected to receive an adjustment with respect to their outstanding awards, which, in each case, is intended to compensate them for the diminution in value associated with the common shares underlying their equity awards. Holders of our equity awards are encouraged to speak with their tax advisors regarding the tax treatment of any such adjustment.
Amount and Source of Funds and Financing for the Rights Offering; Expenses
It is expected that we will incur an aggregate of approximately $1.3 million in expenses in connection with the rights offering, other than the fee we are paying to the dealer manager for its marketing and soliciting services. These expenses will be comprised of:
| • | approximately $60,000 of printing and mailing expenses associated with this prospectus; |
| • | approximately $825,000 in legal fees and expenses; |
| • | approximately $200,000 in accounting fees and expenses; |
| • | $45,495 in SEC filing fees; and |
| • | approximately $169,505 in other miscellaneous expenses. |
We will pay these expenses from our existing cash balances.
Transfer Agent and Registrar
Computershare is the transfer agent and registrar for all classes of our common shares.
No Recommendations to Rightsholders
Neither we nor our board of directors (nor any committee thereof) has made any recommendation as to whether you should exercise or transfer your rights. You should decide whether to transfer your rights, subscribe for our Class C common shares, or simply take no action with respect to your rights, based on your own assessment of your best interests.
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Purchase Intentions of John C. Malone, Searchlight Capital Partners L.P., Directors and Senior Management
We have been informed by John Malone, a director emeritus of our company, and Searchlight Capital Partners, L.P., who together own approximately 25.4% of the aggregate voting power of our outstanding common shares, that they each intend to exercise in full their respective basic subscription privileges in the rights offering. In addition, each member of our board and executive management team has advised us that he or she intends to exercise his or her basic subscription rights in full.
Termination
Our board of directors (or a committee thereof) may determine to abandon the rights distribution at any time and, even after the Class C Rights have been distributed, may also determine to abandon the rights offering prior to its commencement or terminate the rights offering following its commencement for any reason at any time before the expiration time. If we terminate the rights offering, we will promptly issue a press release announcing the termination, and we will promptly thereafter return all subscription payments. We will not pay interest on, or deduct any amounts from, subscription payments if we terminate the rights offering.
Foreign Shareholders
We will not mail rights certificates to registered shareholders on the rights distribution record date or to subsequent transferees whose addresses are outside the United States. Instead, we will have the subscription agent hold the rights certificates for those holders’ accounts. To exercise their rights, registered foreign holders must notify the subscription agent before 5:00 p.m., New York City time, on the fifth business day prior to the expiration time, and must establish to the satisfaction of the subscription agent that such exercise is permitted under applicable law. If a registered foreign holder does not notify and provide acceptable instructions to the subscription agent by such time (and if no contrary instructions have been received), the rights will be sold on behalf of such registered foreign holder, subject to the subscription agent’s ability to find a purchaser. Any such sales will be deemed to be effected at the weighted average sale price of all Class C Rights sold by the subscription agent. See “—Method of Transferring and Selling Class C Rights” above. If the subscription agent sells the rights, the subscription agent will remit a check for the net proceeds from the sale of any rights, reduced by any applicable tax withholding (including backup withholding), to registered foreign holders by mail.
Regulatory Limitation
We will not be required to issue to you Class C common shares pursuant to the rights offering if, in our opinion, you would be required to obtain prior clearance or approval from any state or federal regulatory authorities to own or control such shares and if, at the expiration time, you have not obtained such clearance or approval.
Issuance of Class C Common Shares
Unless we earlier terminate the rights offering, the subscription agent will issue to you the Class C common shares purchased by you in the rights offering as soon as practicable after the expiration time. The subscription agent will effect delivery of the subscribed for Class C common shares through the subscription agent’s book-entry registration system by mailing to each subscribing holder a statement of holdings detailing the subscribing holder’s subscribed for Class C common shares and the method by which the subscribing holder may access its account and, if desired, trade its shares.
Your payment of the aggregate subscription price will be retained by the subscription agent and will not be delivered to us, unless and until your subscription is accepted and you are issued your subscribed for Class C
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common shares. We will not pay you any interest on funds paid to the subscription agent, regardless of whether the funds are applied to the subscription price or returned to you. You will have no rights as a shareholder of our company with respect to your subscribed for Class C common shares until the shares are delivered via the book-entry registration statement. Upon such delivery, you will be deemed the owner of the shares you purchased by exercise of your rights. Unless otherwise instructed in the rights certificates, the shares issued to you pursuant to your subscription will be registered in your name or the name of your nominee, if applicable.
We will not issue any fractional rights for Class C common shares.
Class C Common Shares Outstanding Following the Rights Offering
Following the rights offering and without giving effect to any anti-dilution adjustments associated with outstanding equity awards or rounding of the Class C Rights as described herein, we estimate that we would have outstanding 180,395,049 Class C common shares immediately following the completion of the rights offering.
Compliance with State Regulations Pertaining to the Rights Offering
We are not making the rights offering in any state or other jurisdiction in which it is unlawful to do so. We will not sell or accept an offer to purchase Class C common shares from you if you are a resident of any state or other jurisdiction in which the sale or offer of the rights would be unlawful. We may delay the commencement of the rights offering in certain states or other jurisdictions in order to comply with the laws of those states or other jurisdictions. However, we may decide, in our sole discretion, not to modify the terms of the rights offering as may be requested by certain states or other jurisdictions. If that happens and you are a resident of the state or jurisdiction that requests the modification, you will not be eligible to participate in the rights offering. We do not expect that there will be any changes in the terms of the rights offering.
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CERTAIN U.S. FEDERAL INCOME TAX CONSEQUENCES
The following discussion is a summary of certain U.S. federal income tax consequences to U.S. holders (as defined below) of our Class A, Class B or Class C common shares of the receipt, ownership and disposition, expiration or exercise of the Class C Rights distributed pursuant to the rights distribution, and, where noted, the ownership and disposition of our Class C common shares received upon exercise of the Class C Rights. This discussion is based upon the Internal Revenue Code of 1986, as amended (the Code), Treasury regulations promulgated or proposed thereunder (the Treasury Regulations), administrative pronouncements and judicial decisions as of the date of this prospectus, all of which are subject to change or differing interpretations at any time, possibly with retroactive effect. In particular, changes in the Code or applicable Treasury Regulations could adversely affect the U.S. federal income tax treatment of stock rights with characteristics similar to the Class C Rights. Any future legislation, Treasury Regulation, or other guidance could be enacted or promulgated so as to apply retroactively to the rights distribution or the exercise of the Class C Rights. Any such changes could materially affect the continuing validity of this discussion. We cannot assure you that the Internal Revenue Service (IRS) will not challenge one or more of the tax consequences described in this discussion or that a court will not sustain such challenge, and we have not obtained, nor do we intend to obtain, a ruling from the IRS or an opinion of counsel with respect to the U.S. federal income tax consequences of the receipt, ownership and disposition, expiration or exercise of the Class C Rights, or of the ownership and disposition of our Class C common shares received upon exercise of the Class C Rights.
As used herein, a “U.S. holder” means a beneficial owner of our Class A, Class B or Class C common shares, as the case may be, that is for U.S. federal income tax purposes: (1) an individual who is a citizen or resident of the United States; (2) a corporation (or other entity treated as a corporation for U.S. federal income tax purposes) created or organized in or under the laws of the United States, any state thereof, or the District of Columbia; (3) an estate the income of which is subject to U.S. federal income taxation regardless of its source; or (4) a trust (a) the administration of which is subject to the primary supervision of a court within the United States and one or more “United States persons,” as described in the Code, have authority to control all substantial decisions of the trust or (b) that has a valid election in effect under applicable Treasury Regulations to be treated as a “United States person,” as defined in the Code.
This discussion addresses only those of you who receive the Class C Rights pursuant to the rights distribution and hold our Class A, Class B or Class C common shares and will, after the rights distribution, hold the Class C Rights and any Class C common shares received upon exercise of the Class C Rights, in each case, as “capital assets” within the meaning of Section 1221 of the Code. This discussion is limited to the U.S. federal income tax consequences of the rights distribution and rights offering and of the ownership and disposition of our Class C common shares received upon exercise of the Class C Rights, and does not address all potential tax consequences that may be relevant to you in light of your particular circumstances. Further, this discussion does not address U.S. holders of our Class A, Class B or Class C common shares or Class C Rights who are subject to special treatment under U.S. federal income tax laws, such as:
| • | tax-exempt organizations for U.S. federal income tax purposes; |
| • | S corporations, entities taxable as partnership for U.S. federal income tax purposes and other pass-through entities, and in each case, owners thereof; |
| • | banks, insurance companies or other financial institutions; |
| • | mutual funds; |
| • | brokers or dealers in stocks and securities; |
| • | traders or investors in our Class A, Class B or Class C common shares or the Class C Rights who elect the mark-to-market method of accounting for such shares or rights; |
| • | shareholders who received our Class A, Class B or Class C common shares from the exercise of compensatory share rights or otherwise as compensation or will receive Class C Rights as compensation; |
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| • | shareholders who hold our Class A, Class B or Class C common shares or will hold Class C Rights in a tax-qualified retirement plan, individual retirement account or other qualified savings account; |
| • | shareholders who hold our Class A, Class B or Class C common shares or will hold Class C Rights as part of a straddle, wash sale, or a constructive sale or conversion transaction or other risk reduction or integrated investment transaction; and |
| • | any holder that, at any time, owns, directly, indirectly or constructively, 10% or more of the combined voting power of our shares or 10% or more of the total value of all classes of our shares outstanding, and any person related to such a holder (within the meaning of Section 267(b) of the Code). |
This discussion also does not address the effect of any state, local or foreign tax laws or any tax treaty that may apply or the application of the U.S. federal estate and gift tax, the alternative minimum tax or the Medicare tax on net investment income. In addition, this discussion does not address the U.S. federal income tax consequences of the rights distribution or rights offering to current holders of options, warrants or other rights to acquire our Class A, Class B or Class C common shares.
You should consult your tax advisor regarding the application of the U.S. federal income tax laws to your particular situation, as well as the applicability of any other U.S. federal, state, local or foreign tax laws or any tax treaty.
Receipt, Ownership and Disposition, Expiration or Exercise of the Class C Rights
Receipt of Class C Rights
We believe, and intend to take the position that, your receipt of the Class C Rights pursuant to the rights distribution or rights offering would not be treated as a taxable distribution with respect to your existing Class A, Class B or Class C common shares for U.S. federal income tax purposes. Pursuant to Section 305(a) of the Code, in general, the receipt by a stockholder of a right to acquire stock would not be included in the taxable income of the recipient. The general rule of non-recognition in Section 305(a) is subject to exceptions in Section 305(b), which include “disproportionate distributions.” A “disproportionate distribution” is a distribution (or series of distributions, including deemed distributions) from a corporation that has the effect of the receipt of cash or property by some stockholders (including, for this purpose, holders of convertible securities) and an increase in the proportionate interest of other stockholders (including, for this purpose, holders of convertible securities) in the corporation’s assets or earnings and profits. We believe your receipt of the Class C Rights pursuant to the rights distribution or rights offering would not be treated as part of a disproportionate distribution.
The application of Section 305 of the Code is not clear in certain respects. Accordingly, the application of the disproportionate distribution rules to the rights distribution is subject to some uncertainty. We have not sought any ruling from the IRS, and do not intend to seek any ruling, relating to the rights distribution or rights offering. Our position regarding the tax-free treatment of the rights distribution and rights offering is not binding on the IRS or the courts. If this position is finally determined by the IRS or a court to be incorrect, whether on the basis that the issuance of the Class C Rights is a “disproportionate distribution” or otherwise, then the distribution of the Class C Rights will be treated as a distribution of property with respect to your Class A common shares, Class B common shares, or Class C common shares, as applicable, and the tax treatment of such distribution will be determined by applying the principles described below under the section “—Ownership and Disposition of the Class C Common Shares Received Upon Exercise of the Class C Rights—Distributions on Class C Common Shares.”
The remaining discussion below is based upon, and assumes, the treatment of the rights distribution or rights offering as a non-taxable distribution with respect to your existing Class A, Class B or Class C common shares for U.S. federal income tax purposes.
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Tax Basis and Holding Period of Class C Rights
If, on the rights distribution date, the fair market value of the Class C Rights which we distribute to you represents less than 15% of the fair market value of your existing Class A, Class B or Class C common shares with respect to which such rights were distributed, your basis in the Class C Rights generally will be zero for U.S. federal income tax purposes, unless you make an election to allocate your basis in such existing shares between those shares and Class C Rights in proportion to their relative fair market values on the rights distribution date. This election may be made pursuant to Section 307 of the Code and the Treasury Regulations thereunder and will be irrevocable once made.
However, if, on the rights distribution date, the fair market value of the Class C Rights which we distribute to you represents 15% or more of the fair market value of your existing Class A, Class B or Class C common shares with respect to which such rights were distributed, then your basis in such existing shares will be allocated between those shares and Class C Rights in proportion to their relative fair market values on the rights distribution date.
Your holding period for the Class C Rights that we distribute to you will include the holding period of your existing Class A, Class B or Class C common shares with respect to which such rights were distributed.
If you have acquired different blocks of our Class A, Class B or Class C common shares at different times or at different prices, then you should consult your tax advisor regarding the allocation of your aggregate basis among, and your holding period of, Class C Rights distributed pursuant to the rights distribution.
Sale, Exchange or Other Disposition of Class C Rights
Subject to the special rules described below under the section “—Possible PFIC Classification,” upon the sale, exchange or other disposition of your Class C Rights, you generally will recognize capital gain or loss equal to the difference between the amount realized and your basis in such rights. Such gain or loss will be long-term capital gain or loss if your holding period in the Class C Rights is more than one year on the date of the sale, exchange or other disposition. Long-term capital gains of certain non-corporate taxpayers generally are taxed at lower rates than short-term capital gains. The deductibility of capital losses is subject to limitations.
Expiration of Class C Rights
If you receive Class C Rights in the rights distribution from us and you allow such rights to expire (i.e., you retain but do not exercise such rights), then you generally will not be permitted to recognize a taxable loss. If your basis in your existing Class A, Class B or Class C common shares was allocated between those shares and the expired Class C Rights, then your basis in the expired Class C Rights will be reallocated to those shares.
If your Class C Rights expire without exercise after you have disposed of your existing Class A, Class B or Class C common shares with respect to which such rights were distributed, and tax basis had previously been allocated between those shares and the expired Class C Rights, you should consult your tax advisor regarding the ability to recognize a loss (if any) on the expiration of the Class C Rights.
Exercise of Class C Rights; Basis and Holding Period of Acquired Shares
You will not recognize gain or loss upon the exercise of the Class C Rights. Your initial basis in the Class C common shares you acquire through exercise of such rights will equal the sum of (i) the subscription price you paid to acquire such Class C common shares and (ii) your basis, if any, in the Class C Rights which you exercised. Your holding period in the Class C common shares acquired upon exercise of the Class C Rights will begin on the date of exercise.
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Ownership and Disposition of the Class C Common Shares Received Upon Exercise of the Class C Rights
Distributions on Class C Common Shares
We have no present intention of making cash distributions on Class C common shares. Subject to the special rules described below under the section “—Possible PFIC Classification,” distributions, if any, made to a U.S. holder with respect to our Class C common shares held by the U.S. holder (other than certain distributions of common stock) generally will be taxable to the U.S. holder as dividend income to the extent of our current or accumulated earnings and profits (as determined for U.S. federal income tax purposes). Amounts not treated as dividend income for U.S. federal income tax purposes will first be treated as a tax-free return of capital (with a corresponding reduction in the adjusted tax basis of a U.S. holder’s Class C common shares, as applicable), and thereafter will be taxed as capital gain recognized on a taxable disposition. If no determination of earnings and profits for U.S. federal income tax purposes can be made because of a lack of information or otherwise, then the distribution will be treated entirely as dividend income. Subject to the special rules described below under the section “—Possible PFIC Classification,” so long as the Class C common shares continue to be listed on the Nasdaq stock market, dividends with respect to our Class C common shares received by certain non-corporate U.S. holders (including individuals) will generally constitute qualified dividend income subject to U.S. federal income tax at preferential rates, provided that certain holding period requirements and other conditions are satisfied. U.S. holders are urged to consult their tax advisors regarding the availability of the preferential rate based on their particular situation. Corporate U.S. holders generally will not be eligible for the dividends received deduction with respect to dividends received from us.
For purposes of computing allowable foreign tax credits for U.S. federal income tax purposes, dividends received with respect to our Class C common shares will generally be treated as foreign-source income and constitute “passive category income.” However, if we are or become at least 50% owned by U.S. persons either in terms of the total combined voting power of all classes of stock entitled to vote or in terms of the total value of our outstanding stock, dividends paid by us may be treated as U.S.-source income (rather than foreign-source income) for foreign tax credit purposes to the extent we earn more than an insignificant amount of U.S.-source income. U.S. holders are urged to consult their tax advisors regarding the possible impact of this rule in their particular circumstances.
Sale, Exchange or Other Taxable Dispositions of Class C Common Shares
A U.S. holder generally will recognize gain or loss on any sale or other taxable disposition of our Class C common shares in an amount equal to the difference between the amount realized by the U.S. holder from such sale or other taxable disposition and the U.S. holder’s tax basis in such shares. Subject to the special rules described below under the section “—Possible PFIC Classification,” such gain or loss generally will be treated as (1) long-term capital gain or loss if the U.S. holder’s holding period is greater than one year at the time of the sale, exchange or other disposition, or short-term capital gain or loss otherwise and (2) U.S.-source gain or loss, as applicable, for foreign tax credit purposes. Individuals and other non-corporate U.S. holders may be eligible for preferential rates of U.S. federal income tax in respect of long-term capital gains. A U.S. holder’s ability to deduct capital losses is subject to certain limitations.
Possible PFIC Classification
In general, a non-U.S. entity treated as a corporation for U.S. federal income tax purposes will be treated as a passive foreign investment company (“PFIC”) in a particular taxable year if either (1) at least 75% of its gross income for the taxable year is “passive” income, or (2) at least 50% of the average value of its assets held during the taxable year is attributable to assets that produce, or are held for the production of, passive income, subject to certain special rules. For purposes of these tests, “passive income” generally includes dividends, interests, gains from the sale or exchange of investment property, and rents and royalties (other than rents and royalties that are received from unrelated parties in connection with the active conduct of a trade or business). By contrast, income derived from the performance of services generally does not constitute “passive income.” For this purpose, a
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non-U.S. corporation is treated as owning directly its proportionate share of the assets and receiving directly its proportionate share of the income of any other corporation in which it owns, directly or indirectly, at least 25% (by value) of the stock.
Based on our business and operations and the business and operations of our subsidiaries, we believe we were not a PFIC for 2019, and we do not expect to be treated as a PFIC for the current taxable year or for foreseeable future taxable years. No assurance can be given, however, that the IRS, or a court of law, will accept our position. Further, the determination of whether we are a PFIC in any taxable year is a factual determination made on an annual basis after the close of such taxable year, and our status may change if there are changes in our or our subsidiaries’ assets, income or operations. Accordingly, there can be no assurance that we will not be considered a PFIC for the current taxable year or any future taxable year.
If we were to be treated as a PFIC for any taxable year in which a U.S. holder is treated as holding our shares (including, under proposed Treasury Regulations, the Class C Rights) for U.S. federal income tax purposes, such U.S. holder could be subject to certain adverse U.S. federal income tax consequences with respect to gain realized on a sale or other disposition of such shares or Class C Rights (including an indirect disposition such as a pledge), and certain distributions received on such shares, even if we are not a PFIC in any subsequent taxable year. In addition, dividends received with respect to our Class C common shares would not constitute qualified dividend income eligible for preferential tax rates if we were treated as a PFIC for the taxable year in which the dividend is paid or for its preceding taxable year. Certain elections (including a mark-to-market election) may be available to U.S. holders to mitigate some of the adverse tax consequences resulting from PFIC treatment. In addition, if we were to be treated as a PFIC for any taxable year in which a U.S. holder is treated as holding our shares (including, under proposed Treasury Regulations, the Class C Rights) for U.S. federal income tax purposes, such U.S. holder would generally be required to file annual returns with the IRS on IRS Form 8621 (Information Return by a Shareholder of a Passive Foreign Investment Company or Qualified Electing Fund).
U.S. holders are urged to consult their tax advisors regarding the PFIC rules, including the PFIC annual reporting requirements, as well as the applicability, availability and advisability of, and procedure for, making available elections with respect to us and our subsidiaries, and the U.S. federal income tax consequences of making such elections.
U.S. Return Disclosure Requirements with Respect to Foreign Financial Assets
Certain U.S. holders who are individuals (and, under the Treasury Regulations, certain entities) may be required to report information relating to the Class C Rights and our Class C common shares, subject to certain exceptions (including an exception for the Class C Rights and our Class C common shares held in accounts maintained by certain U.S. financial institutions, and an exception for U.S. holders who have filed IRS Form 8621 (discussed above) or certain other IRS forms for the same taxable year), by filing IRS Form 8938 (Statement of Specified Foreign Financial Assets) with their federal income tax returns. Such U.S. holders who fail to timely furnish the required information may be subject to significant penalties. Additionally, if a U.S. holder does not file the required information, the statute of limitations with respect to tax returns of the U.S. holder to which the information relates may not close until three years after such information is filed. U.S. holders should consult their tax advisors regarding their reporting obligations with respect to their ownership and disposition of the Class C Rights and our Class C common shares.
Information Reporting and Backup Withholding
In general, information reporting to the IRS and backup withholding may apply to your sale, exchange or other disposition of Class C Rights. Backup withholding (currently at a rate of 24%) may apply to “reportable payments” if you fail to provide a correct taxpayer identification number and certain other information, fail to provide a certification of exempt status or fail to report your full dividend and interest income. You are not subject to backup withholding if you (i) are a corporation or fall within certain other exempt categories and,
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when required, demonstrate that fact or (ii) provide a correct taxpayer identification number, certify under penalties of perjury that you are not subject to backup withholding, and otherwise comply with the applicable requirements of the backup withholding rules.
Backup withholding is not an additional tax. Any amounts withheld under the backup withholding rules will be allowed as a refund or credit against your U.S. federal income tax liability provided the required information is properly furnished to the IRS. The information reporting requirements may apply regardless of whether backup withholding is required.
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MATERIAL BERMUDA TAX CONSEQUENCES OF
THE RIGHTS DISTRIBUTION AND THE RIGHTS OFFERING
At the present time, there is no Bermuda income or profits tax, withholding tax, capital gains tax, capital transfer tax, estate duty or inheritance tax payable by us or by our shareholders in respect of our shares, nor is any such tax payable in respect of the Class C Rights. We have obtained an assurance from the Minister of Finance of Bermuda under the Exempted Undertakings Tax Protection Act 1966 that, in the event that any legislation is enacted in Bermuda imposing any tax computed on profits or income, or computed on any capital asset, gain or appreciation or any tax in the nature of estate duty or inheritance tax, such tax shall not, until March 31,2035, be applicable to us or to any of our operations or to our shares, debentures or other obligations except insofar as such tax applies to persons ordinarily resident in Bermuda or is payable by us in respect of real property owned or leased by us in Bermuda.
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We are distributing our Class C Rights directly to holders of our common shares, on a pro rata basis, pursuant to the rights distribution, and expect to list our Class C Rights on the Nasdaq Global Select Market on a “when-issued” basis on September 10, 2020 under the symbol “LILRV” and in the “regular way” on September 11, 2020 (the first trading day following the rights distribution date and the commencement date for the rights offering) under the symbol “LILAR.”
The Class C Rights offered pursuant to this rights offering are being offered by us directly to all holders of our common shares as of the rights distribution record date. We intend to distribute subscription materials, including rights certificates, to those persons that were holders of our common shares on the rights distribution record date.
The Class C Rights entitle you to a basic subscription privilege and an oversubscription privilege. The basic subscription privilege entitles you to purchase one Class C common share per whole right, upon delivery of the required documents and payment of the subscription price per share, prior to the expiration time. You are not required to exercise your basic subscription privilege, in full or in part, unless you wish to also purchase shares under your oversubscription privilege. The oversubscription privilege entitles you to purchase up to that number of Class C common shares offered in the rights offering which are not purchased by other rightsholders pursuant to their basic subscription privilege, upon delivery of the required documents and payment of the subscription price per share prior to the expiration time.
J.P. Morgan Securities LLC will act as dealer manager for this rights offering. Under the terms and subject to the conditions contained in the dealer manager agreement, the dealer manager will provide marketing services in connection with this rights offering and will solicit the exercise of rights and participation in the over-subscription privilege. This offer is not contingent upon any number of rights being exercised. The dealer manager will not underwrite this offering and has no obligation to purchase, or procure purchases of, the Class C Rights offered hereby or otherwise act in any capacity whatsoever as an underwriter. We have agreed to pay the dealer manager a fee for its marketing and soliciting services equal to $1,000,000. We have also agreed to pay the documented fees and disbursements of the Dealer Manager’s outside legal counsel in connection with the rights offering.
In the dealer manager agreement, we have agreed that we will indemnify the dealer manager against certain liabilities, including liabilities under the Securities Act, or contribute to payments that the dealer manager may be required to make in respect of those liabilities. The dealer manager agreement also provides that the dealer manager will not be subject to any liability to us in rendering the services contemplated by the dealer manager agreement except for any act of bad faith, willful misfeasance, or gross negligence of the dealer manager.
The dealer manager has not prepared any report or opinion constituting a recommendation or advice to us or to our shareholders in connection with this offering, nor has the dealer manager prepared an opinion as to the fairness of the subscription price or the terms of this offering. The dealer manager expresses no opinion and makes no recommendation to the holders of our common shares as to the purchase by any person of common shares. The dealer manager also expresses no opinion as to the prices at which the Class C Rights to be distributed in connection with this offering may trade or the prices at which the Class C common shares acquired through purchasing and exercising the rights may trade if and when they are issued or at any future time.
Except as described herein, we have not employed any brokers, dealers or underwriters in connection with the solicitation of exercises of Class C Rights.
Computershare will act as subscription agent for the rights offering. We have agreed to pay Computershare a base fee for its services as subscription agent equal to approximately $75,000 (which includes the fees associated with the exercise but not the sale of rights and does not include certain administrative fees, some of which may be determined at a later date). We have also agreed to reimburse Computershare for its reasonable expenses in connection with its service as subscription agent, including fees relating to the exercise of rights by brokers, dealers and nominees acting on behalf of holders of our common shares.
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We will pay Innisfree M&A Incorporated, the information agent, an estimated fee of $15,000 in connection with the rights offering. We have also agreed to reimburse Innisfree M&A Incorporated for its reasonable expenses in connection with its service as information agent.
Prior to the expiration of the offering, the dealer manager or its affiliates can independently offer for sale Class C common shares at prices determined at the time of sale in its capacity as owner of such shares and not as dealer manager. The dealer manager could realize profits or losses independent of any fees described in this prospectus.
The dealer manager and/or its affiliates have engaged, and may in the future engage, in investment banking, commercial banking and other financial advisory and commercial dealings with us and our associates. They have received (or will receive) customary fees and commissions for these transactions. The dealer manager has engaged in, and may in the future engage in, such transactions or other commercial dealings in the ordinary course of business with us or our affiliates, including certain affiliates of the dealer manager having acted as agent in connection with certain of our historical private placement transactions, and as lenders to us or our affiliates.
In addition, in the ordinary course of their business activities, the dealer manager and its affiliates may make or hold a broad array of investments and actively trade debt and equity securities (or related derivative securities) and financial instruments (including bank loans) for their own accounts and for the accounts of their customers. Such investments and securities activities may involve securities and/or instruments of ours or our affiliates. The dealer manager and its affiliates may also make investment recommendations and/or publish or express independent research views in respect of such securities or financial instruments and may hold, or recommend to clients that they acquire, long and/or short positions in such securities and instruments.
In connection with this offering, the dealer manager may engage in passive market making transactions in our Class C common shares on the Nasdaq Global Select Market in accordance with Regulation M under the Exchange Act, during the business day prior to the pricing of the offering, before the commencement of offers or sales of the Class C Rights. Passive market makers must comply with applicable volume and price limitations and must be identified as passive market makers. In general, a passive market maker must display its bid at a price not in excess of the highest independent bid for such security; if all independent bids are lowered below the passive market maker’s bid, however, the passive market maker’s bid must then be lowered when certain purchase limits are exceeded. Passive market making may stabilize the market price of the Class C Rights at a level above that which might otherwise prevail in the open market and, if commenced, may be discontinued at any time.
Except as described herein, we are not paying any other commissions, fees or discounts in connection with the rights offering. Some of our employees may solicit responses from you as a holder of rights, but we will not pay our employees any commissions or compensation for such services other than their normal employment compensation.
We estimate that our total expenses in connection with the rights offering, including registration, legal, printing and accounting fees, will be approximately $1.3 million, other than the fee we are paying to the dealer manager for its marketing and soliciting services.
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Certain legal matters will be passed upon for us by Baker Botts L.L.P., New York, New York. Legal matters relating to the validity of the securities to be issued in the rights offering will be passed upon by Conyers Dill & Pearman Limited, Hamilton, Bermuda. Certain legal matters in connection with this rights offering will be passed upon for the dealer manager by Sidley Austin LLP, New York, New York.
The consolidated financial statements of Liberty Latin America as of December 31, 2019 and 2018, and for each of the years in the three-year period ended December 31, 2019, and management’s assessment of the effectiveness of internal control over financial reporting as of December 31, 2019 have been incorporated by reference herein and in the Registration Statement on Form S-3 in reliance upon the reports of KPMG LLP, independent registered public accounting firm, incorporated by reference herein, and upon the authority of said firm as experts in accounting and auditing.
The report dated February 19, 2019, on the effectiveness of internal control over financial reporting as of December 31, 2019, expresses the opinion that Liberty Latin America Ltd. did not maintain effective internal control over financial reporting as of December 31, 2019 because of the effect of material weaknesses on the achievement of the objectives of the control criteria and contains an explanatory paragraph that states a material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the company’s annual or interim financial statements will not be prevented or detected on a timely basis. The following material weaknesses have been identified and included in management’s assessment:
| • | The Company did not have a sufficient number of trained resources with the appropriate skills and knowledge with assigned responsibilities and accountability for the design and operation of internal controls over financial reporting. |
| • | The Company did not have an effective risk assessment process that successfully identified and assessed risks of misstatement to ensure controls were designed and implemented to respond to those risks. The Company did not adequately communicate the changes necessary in financial reporting and related internal controls throughout its organization and to affected third parties. |
| • | The Company did not have an effective monitoring process to assess the consistent operation of internal control over financial reporting and to remediate known control deficiencies. |
| • | The Company did not have an effective information and communication process to identify, capture and process relevant information necessary for financial accounting and reporting. |
| • | The Company did not i) establish effective general information technology controls (GITCs), specifically program change controls and access controls, commensurate with financial and IT personnel job responsibilities that support the consistent operation of the Company’s IT operating systems, databases and IT applications, and end user computing over all financial reporting, ii) have policies and procedures through which general information technology controls are deployed across the organization. Automated process-level controls and manual controls dependent upon the accuracy and completeness of information derived from information technology systems were also rendered ineffective because they are affected by the lack of GITCs. |
| • | The Company did not have effective control activities related to the design, implementation and operation of process-level control activities related to order-to-cash (including revenue, trade receivables, and deferred revenue), procure-to-pay (including operating expenses, prepaid expenses, accounts payable, and accrued liabilities), hire-to-pay (including compensation expense and accrued liabilities), long-lived assets, inventory, and other financial reporting processes. |
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| • | The Company did not have effective control activities related to the design, implementation and operation of process-level control activities related to order-to-cash (including revenue, trade receivables, and deferred revenue), procure-to-pay (including operating expenses, prepaid expenses, accounts payable, and accrued liabilities), hire-to-pay (including compensation expense and accrued liabilities), long-lived assets, inventory, and other financial reporting processes. |
The material weaknesses were considered in determining the nature, timing, and extent of audit tests applied in the audit of the 2019 consolidated financial statements, and this report does not affect the report on those consolidated statements.
The report covering the December 31, 2019 consolidated financial statements refers to changes in the method of accounting for leases as of January 1, 2019 due to the adoption of Accounting Standards Update No. 2016-02, Leases, and accounting for revenue from contracts with customers as of January 1, 2018 due to the adoption of Accounting Standards Update No. 2014-09, Revenue from Contracts with Customers.
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PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution.
The following table sets forth the estimated expenses payable by Liberty Latin America Ltd., a Bermuda exempted company (“Liberty Latin America” or the “Registrant”), in connection with the offering described in this Registration Statement. All amounts are estimates except the registration fee.
| Registration fee |
$ | 45,495 | ||
| Accounting fees and expenses |
200,000 | |||
| Legal fees and expenses |
825,000 | |||
| Printing and engraving expenses |
60,000 | |||
| Miscellaneous |
169,505 | |||
|
|
|
|||
| Total |
$ | 1,300,000 | ||
|
|
|
| Item 15. | Indemnification of Directors and Officers. |
Section 98 of the Bermuda Companies Act provides generally that a Bermuda company may indemnify its directors, officers and auditors against any liability which by virtue of any rule of law would otherwise be imposed on them in respect of any negligence, default, breach of duty or breach of trust, except in cases where such liability arises from fraud or dishonesty of which such director, officer or auditor may be guilty in relation to the company. Section 98 further provides that a Bermuda company may indemnify its directors, officers and auditors against any liability incurred by them in defending any proceedings, whether civil or criminal, in which judgment is awarded in their favor or in which they are acquitted or granted relief by the Supreme Court of Bermuda pursuant to Section 281 of the Bermuda Companies Act.
The Registrant’s bye-laws provide that the Registrant will indemnify its officers and directors in respect of their actions and omissions, except in respect of their fraud or dishonesty, and that the Registrant will advance funds to its officers and directors for expenses incurred in their defense upon receipt of an undertaking to repay the funds if any allegation of fraud or dishonesty is proved. The Registrant’s bye-laws provide that its shareholders waive all claims or rights of action that they might have, individually or in right of the company, against any of the Registrant’s directors or officers for any act or failure to act in the performance of such director’s or officer’s duties, except in respect of any fraud or dishonesty of such director or officer. Section 98A of the Bermuda Companies Act permits the Registrant to purchase and maintain insurance for the benefit of any officer or director in respect of any loss or liability attaching to him in respect of any negligence, default, breach of duty or breach of trust, whether or not the Registrant may otherwise indemnify such officer or director. The Registrant has purchased and will maintain a directors’ and officers’ liability policy for such purpose and has entered into indemnification agreements with its directors and officers to provide for indemnification to the extent permitted by Bermuda law.
| Item 16. | Exhibits. |
(a) Exhibits. The following is a complete list of Exhibits filed as part of this registration statement.
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| * | Filed herewith. |
| Item 17. | Undertakings. |
| (a) | The undersigned Registrant hereby undertakes: |
| (1) | To file, during any period in which offers or sales are being made, a post-effective amendment to this Registration Statement: |
| (i) | To include any prospectus required by section 10(a)(3) of the Securities Act of 1933; |
| (ii) | To reflect in the prospectus any facts or events arising after the effective date of the Registration Statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the Registration Statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) of the Securities Act if, in the aggregate, the changes in volume and price represent no more than a 20 percent change in the maximum aggregate offering price set forth in the “Calculation of Registration Fee” table in the effective Registration Statement; and |
| (iii) | To include any material information with respect to the plan of distribution not previously disclosed in the Registration Statement or any material change to such information in the Registration Statement; |
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provided, however, that paragraphs (a)(1)(i), (a)(1)(ii) and (a)(1)(iii) do not apply if the information required to be included in a post-effective amendment by those paragraphs is contained in reports filed with or furnished to the Commission by the Registrant pursuant to section 13 or section 15(d) of the Securities Exchange Act of 1934, that are incorporated by reference in the Registration Statement, or is contained in a form of prospectus filed pursuant to Rule 424(b) that is part of the Registration Statement.
| (2) | That, for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. |
| (3) | To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering. |
| (5) | That, for the purpose of determining liability under the Securities Act of 1933 to any purchaser: |
| (A) | Each prospectus filed by the Registrant pursuant to Rule 424(b)(3) shall be deemed to be part of the Registration Statement as of the date the filed prospectus was deemed part of and included in the Registration Statement; and |
| (B) | Each prospectus required to be filed pursuant to Rule 424(b)(2), (b)(5), or (b)(7) as part of a registration statement in reliance on Rule 430B relating to an offering made pursuant to Rule 415(a)(1)(i), (vii) or (x) for the purpose of providing the information required by Section 10(a) of the Securities Act shall be deemed to be part of and included in the Registration Statement as of the earlier of the date such form of prospectus is first used after effectiveness or the date of the first contract of sale of securities in the offering described in the prospectus. As provided in Rule 430B, for liability purposes of the issuer and any person that is at that date an underwriter, such date shall be deemed to be a new effective date of the Registration Statement relating to the securities in the Registration Statement to which that prospectus relates, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. Provided, however, that no statement made in a registration statement or prospectus that is part of the Registration Statement or made in a document incorporated or deemed incorporated by reference into the Registration Statement or prospectus that is part of the Registration Statement will, as to a purchaser with a time of contract of sale prior to such effective date, supersede or modify any statement that was made in the Registration Statement or prospectus that was part of the Registration Statement or made in any such document immediately prior to such effective date. |
| (b) | The undersigned Registrant hereby further undertakes that, for purposes of determining any liability under the Securities Act, each filing of the Registrant’s annual report pursuant to Section 13(a) or Section 15(d) of the Exchange Act (and, where applicable, each filing of an employee benefit plan’s annual report pursuant to Section 15(d) of the Exchange Act) that is incorporated by reference in the Registration Statement shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. |
| (h) | Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons of the Registrant pursuant to the foregoing provisions, or otherwise, the Registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the Registrant of expenses incurred or paid by a director, officer or controlling person of the Registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the Registrant will, |
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| unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue. |
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SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, the Registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-3 and has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Denver, State of Colorado, on this 10th day of September 2020.
| LIBERTY LATIN AMERICA LTD. | ||
| By: | /S/ JOHN M. WINTER | |
| John M. Winter Senior Vice President, Chief Legal Officer and Secretary | ||
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints John M. Winter and Christopher Noyes his or her true and lawful attorney-in-fact and agent with full power of substitution and resubstitution, for him or her and in his or her name, place and stead, in any and all capacities, to sign any and all amendments (including post-effective amendments) to this Registration Statement, and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Commission, granting unto said attorneys-in-fact and agents full power and authority to do and perform each and every act and thing requisite or necessary to be done in and about the premises, as fully to all intents and purposes as he or she might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents, or either of them, or their or his or her substitute or substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act, this Registration Statement has been signed below by the following persons in the capacities and on the dates indicated.
| Name |
Title |
Date | ||
| /s/ MICHAEL T. FRIES |
Executive Chairman of the Board |
September 10, 2020 | ||
| Michael T. Fries | ||||
| /s/ BALAN NAIR |
President, Chief Executive Officer and Director (Principal Executive Officer) | September 10, 2020 | ||
| Balan Nair | ||||
| /s/ ALFONSO DE ANGOITIA NORIEGA |
Director |
September 10, 2020 | ||
| Alfonso de Angoitia Noriega | ||||
| /s/ CHARLES H.R. BRACKEN |
Director |
September 10, 2020 | ||
| Charles H.R. Bracken | ||||
| /s/ MIRANDA CURTIS |
Director |
September 10, 2020 | ||
| Miranda Curtis | ||||
| /s/ PAUL A. GOULD |
Director |
September 10, 2020 | ||
| Paul A. Gould | ||||
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| /s/ BRENDAN PADDICK |
Director | September 10, 2020 | ||
| Brendan Paddick | ||||
| /s/ DANIEL SANCHEZ |
Director | September 10, 2020 | ||
| Daniel Sanchez | ||||
| /s/ ERIC L. ZINTERHOFER |
Director | September 10, 2020 | ||
| Eric L. Zinterhofer | ||||
| /s/ CHRISTOPHER NOYES |
Senior Vice President and Chief Financial Officer (Principal Financial Officer) | September 10, 2020 | ||
| Christopher Noyes | ||||
| /s/ BRIAN ZOOK |
Chief Accounting Officer (Principal Accounting Officer) | September 10, 2020 | ||
| Brian Zook | ||||
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Exhibit 1.1
LIBERTY LATIN AMERICA LTD.
(an exempted Bermuda company limited by shares)
Up to 49,019,607 Class C Liberty Latin America Ltd. Common Shares*
Issuable Upon Exercise of Rights
to Subscribe for such Shares
FORM OF DEALER MANAGER AGREEMENT
September , 2020
J.P. Morgan Securities LLC
383 Madison Avenue
New York, New York 10179
Ladies and Gentlemen:
Liberty Latin America Ltd., an exempted Bermuda company limited by shares (the “Company”), proposes to distribute to the holders of record (the “Holders”) as of 5:00 p.m. (New York City) time on September 8, 2020 of its outstanding (i) Class A Common Shares, par value $0.01 per share (the “Class A Common Shares”), (ii) Class B Common Shares, par value $0.01 per share (the “Class B Common Shares”), and (iii) Class C Common Shares, par value $0.01 per share (the “Class C Common Shares”), rights (each, a “Right” and, collectively, the “Rights”) entitling such Holders, to collectively subscribe for up to an aggregate of 49,019,607 whole Class C Common Shares, plus additional Class C Common Shares which may be issued as a result of rounding fractional Rights up to the nearest whole right, as described in the Prospectus (as defined below) (each, a “Share” and, collectively, the “Shares”) (the “Rights Offering”). Pursuant to the terms of the Rights Offering, the Company is issuing to each Holder (i) 0.2690 Rights for every Class A Common Share, (ii) 0.2690 Rights for every Class B Common Share and (iii) 0.2690 Rights for every Class C Common Share, provided that the total number of Rights to be issued to each Holder will be rounded up to the nearest whole number as described in the Prospectus. The Rights entitle the Holders to acquire during the subscription period (the “Subscription Period”) set forth in the Prospectus at the subscription price of $7.14 per share (the “Subscription Price”), one Share for each Right exercised, on the terms and subject to the conditions set forth in the Prospectus. Pursuant to the over-subscription privilege in connection with the Rights Offering, Holders who fully exercise all Rights issued to them may subscribe for additional Shares not subscribed for by other Holders.
The Company has prepared and filed with the Securities and Exchange Commission (the “Commission”) under the Securities Act of 1933, as amended, and the rules and regulations of the Commission thereunder (collectively, the “Securities Act”), an automatic shelf registration
| * | Plus additional Class C Common Shares which may be issued as a result of rounding fractional Rights up to the nearest whole right, as described in the Prospectus. |
statement on Form S-3 (File No. 333-[•]), including a prospectus, relating to the Rights and the Shares. Such registration statement, at the time it became effective, including the information, if any, deemed pursuant to Rule 430A, 430B or 430C under the Securities Act to be part of the registration statement, at the time of its effectiveness, is referred to herein as the “Registration Statement”; and as used herein, the term “Prospectus” means the prospectus in the form furnished by the Company to the Dealer Manager for use by the Dealer Manager from time to time in connection with the Rights Offering. Any reference in this dealer manager agreement (this “Agreement”) to the Registration Statement or the Prospectus shall be deemed to refer to and include the documents incorporated by reference therein pursuant to Item 12 of Form S-3 under the Securities Act, as of the effective date of the Registration Statement or the Prospectus, as the case may be, and any reference to “amend”, “amendment” or “supplement” with respect to the Registration Statement or the Prospectus shall be deemed to refer to and include any documents filed after such date under the Securities Exchange Act of 1934, as amended, and the rules and regulations of the Commission thereunder (collectively, the “Exchange Act”) that are deemed to be incorporated by reference therein. Capitalized terms used but not defined herein shall have the meanings given to such terms in the Registration Statement and the Prospectus. The term “Offering Materials” shall refer to (i) any Issuer Free Writing Prospectus (as defined below), and (ii) the letters to beneficial owners of the Class A Common Shares, Class B Common Shares and Class C Common Shares of the Company, forms used to exercise rights, any letters from the Company to securities dealers, commercial banks and other nominees, in each case in the form filed as exhibits to the Registration Statement (the “Exercise Materials”).
As used in this Agreement, “Issuer Free Writing Prospectus” means any “issuer free writing prospectus,” as defined in Rule 433 of the Securities Act (“Rule 433”), including without limitation any “free writing prospectus” (as defined in Rule 405 of the Securities Act (“Rule 405”)) relating to the Rights or Shares that is (i) required to be filed with the Commission by the Company, (ii) a “road show that is a written communication” within the meaning of Rule 433(d)(8)(i), whether or not required to be filed with the Commission, or (iii) exempt from filing with the Commission pursuant to Rule 433(d)(5)(i) because it contains a description of the Rights Offering that does not reflect the final terms, in each case in the form filed or required to be filed with the Commission or, if not required to be filed, in the form retained in the Company’s records pursuant to Rule 433(g).
The (i) execution and delivery of this Agreement by the Company, (ii) the Rights Offering, including the issuance of Shares upon exercise of the Rights, (iii) performance by the Company of its obligations under this Agreement, and (iv) transactions contemplated hereby and thereby are referred to herein collectively as the “Transactions.”
1. Engagement.
(a) The Company hereby engages you to act as its exclusive dealer manager (the “Dealer Manager”) in connection with the Rights Offering, and, on the basis of the representations, warranties and agreements contained herein, you hereby accept such engagement upon the terms and subject to the conditions set forth in this Agreement.
2
(b) As Dealer Manager, you agree, in accordance with your firm’s customary practice, to perform those services in connection with the Rights Offering as are customarily performed by investment banks in connection with rights offerings of like nature, including, without limitation, using reasonable best efforts to solicit the exercise of the Rights and subscriptions for the Shares pursuant to the Rights Offering.
(c) The Company further authorizes you to communicate with Computershare Trust Company, N.A. (“Trust Company”) and Computershare Inc. (“Computershare” and together with Trust Company, the “Agent”), with a copy to a representative of the Company designated by the Company, with respect to matters relating to the Transactions. The Company has instructed the Agent to advise you upon your request as to the number of Shares to be issued pursuant to the exercise of Rights that Holders have subscribed for pursuant to the Rights Offering and as to such other matters in connection with the Rights Offering as you may reasonably request, subject to Section 3(e).
(d) The Company acknowledges and agrees that neither you nor any of your affiliates, directors, officers or employees shall have any liability (in tort, contract or otherwise) to the Company, its affiliates or any other person for any losses, claims, damages, liabilities and expenses (each, a “Loss” and, collectively, the “Losses”) arising from any act or omission on the part of any broker or dealer in securities (a “Dealer”), bank or trust company, or any other person in connection with the Rights Offering, and neither the Dealer Manager nor any of its affiliates, directors, officers or employees shall be liable for any Losses arising from its own acts or omissions in performing its obligations as a dealer manager or as a Dealer in connection with the Rights Offering, except for any such Losses that are finally judicially determined to have resulted primarily from its bad faith, gross negligence or willful misconduct in performing such obligations. In connection with the Rights Offering, no Dealer, bank or trust company is to be deemed to be acting as your agent or the agent of the Company or any of its affiliates, and you shall not be deemed the agent of any Dealer, bank or trust company or an agent of, or a fiduciary or a financial advisor to, the Company or any of its affiliates, equity holders, creditors or any other person. In acting as Dealer Manager in connection with the Rights Offering, you shall not be, nor shall you be deemed for any purpose, to act as a partner or joint venturer of, or a member of a syndicate or group with, the Company or its affiliates in connection with the acting as Dealer Manager in connection with the Rights Offering, and neither the Company nor any of its affiliates shall be deemed to act as your agents.
(e) In acting as Dealer Manager in connection with the Rights Offering, you are engaging in an arm’s-length commercial transaction with the Company. The Company acknowledges and agrees that (i) you have been retained solely to provide the services set forth herein, and in rendering such services you shall act as an independent contractor and any duties arising out of your engagement hereunder shall be owed solely to the Company, (ii) you may perform the services contemplated hereby through or in conjunction with your affiliates, and any of your affiliates performing services hereunder shall be entitled to the benefits and be subject to the terms and conditions of this Agreement, and (iii) you are a securities firm engaged in securities trading and brokerage activities and providing investment banking and financial advisory services, and in the ordinary course of business, you and your affiliates may at any time hold long or short positions, and may trade or otherwise effect transactions, for your own account or the accounts of customers, in debt or equity securities of the Company or their respective affiliates or other entities that may be involved in the Transactions. Additionally, the Company acknowledges and agrees that you are not advising the Company as to any legal,
3
regulatory, tax, investment or accounting matters in any jurisdiction. The Company must consult with its own advisors concerning such matters and will be responsible for making its own independent investigation and appraisal of the terms of the Rights Offering and you shall have no responsibility or liability to the Company with respect thereto. Any review by the Dealer Manager of the Company or its affiliates, and the Transactions or other matters relating to such Transactions will be performed solely for the benefit of the Dealer Manager, and shall not be on behalf of the Company or its affiliates or any other person.
2. Representations and Warranties by the Company. The Company represents and warrants to the Dealer Manager as of the time and date of the commencement of the Rights Offering (such date and time hereinafter referred to as the “Representation Date”), as of the date hereof (if such date is not the Representation Date) and as of the date of expiration of the Rights Offering, as set forth in the Prospectus (as it may be extended as provided in the Prospectus, the “Expiration Date”), that:
(a) Registration Statement and Prospectuses. The Company meets the requirements for use of Form S-3 under the Securities Act. The Registration Statement is an “automatic shelf registration statement” (as defined in Rule 405) and the Rights and Shares have been and remain eligible for registration by the Company on such automatic shelf registration statement. The Registration Statement has become effective under the Securities Act. No stop order suspending the effectiveness of the Registration Statement has been issued under the Securities Act, no order preventing or suspending the use of the Prospectus has been issued and no proceedings for any of those purposes have been instituted or are pending or, to the Company’s knowledge, contemplated. The Company has complied with each request (if any) from the Commission for additional information. Each of the Registration Statement and any post-effective amendment thereto, at the time of its effectiveness, complied in all material respects with the requirements of the Securities Act. The Prospectus and any amendment or supplement thereto, at the time each was filed with the Commission complied in all material respects with the requirements of the Securities Act and the Prospectus delivered to the Dealer Manager for use in connection with the Rights Offering was identical to the electronically transmitted copies thereof filed with the Commission pursuant to its Electronic Data Gathering, Analysis and Retrieval system (or any successor system) (“EDGAR”), except to the extent permitted by Regulation S-T. The documents incorporated or deemed to be incorporated by reference in the Registration Statement and the Prospectus, when they became effective or at the time they were or hereafter are filed with the Commission, complied and will comply in all material respects with the requirements of the Exchange Act.
(b) Accurate Disclosure. Neither the Registration Statement nor any amendment thereto, at its effective time, at the Representation Date or at the Expiration Date, contained, contains or will contain an untrue statement of a material fact or omitted, omits or will omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading. The Offering Materials (as amended or supplemented), when taken together with the Prospectus, as of their dates, at the Representation Date and the Expiration Date do not and will not contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading. The Prospectus, as of its date, the Representation Date or at the Expiration Date, did not, does not and will not contain an untrue statement of a
4
material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading. The documents incorporated or deemed to be incorporated by reference in the Registration Statement, the Offering Materials and the Prospectus, at the time the Registration Statement became effective or when such documents incorporated by reference were filed or hereafter are filed with the Commission, when read together with the other information in the Registration Statement, the Offering Materials and the Prospectus, as the case may be, did not, do not and will not contain an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading. The representations and warranties in this subsection shall not apply to statements in or omissions from the Registration Statement, the Offering Materials or the Prospectus (or any amendment or supplement to the Registration Statement, the Offering Materials or the Prospectus) made in reliance upon and in conformity with written information furnished to the Company by the Dealer Manager expressly for use therein. For purposes of this Agreement, the only information so furnished shall be (i) the name of the Dealer Manager, (ii) the first sentence of the fourth paragraph under the caption “Plan of Distribution” in the Prospectus, (iii) the tenth paragraph under the caption “Plan of Distribution” in the Prospectus, and (iv) the first sentence of the thirteenth paragraph under the caption “Plan of Distribution” in the Prospectus (the “Dealer Manager Information”).
(c) Issuer Free Writing Prospectuses. No Issuer Free Writing Prospectus conflicts or will conflict with the information contained in the Registration Statement or the Prospectus, including any document incorporated by reference therein, and any preliminary or other prospectus deemed to be a part thereof that has not been superseded or modified.
(d) Well-Known Seasoned Issuer. (A) At the original effectiveness of the Registration Statement, (B) at the time of the most recent amendment thereto for the purposes of complying with Section 10(a)(3) of the Securities Act (whether such amendment was by post-effective amendment, incorporated report filed pursuant to Section 13 or 15(d) of the Exchange Act or form of prospectus), (C) as of the Representation Date, and (D) as of the Expiration Date, the Company was, is and will be a “well-known seasoned issuer” (as defined in Rule 405).
(e) Company Not Ineligible Issuer. At the time of filing the Registration Statement and any post-effective amendment thereto, at each of the Representation Date, Expiration Date and at the date hereof, the Company was not, is not and will not be an “ineligible issuer,” as defined in Rule 405, without taking account of any determination by the Commission pursuant to Rule 405 that it is not necessary that the Company be considered an ineligible issuer.
(f) Independent Accountants. The accountants who certified the financial statements and supporting schedules incorporated by reference in the Registration Statement, the Offering Materials and the Prospectus are independent public accountants with respect to the Company as required by the Securities Act, the Exchange Act and the Public Company Accounting Oversight Board.
(g) Financial Statements; Non-GAAP Financial Measures. The financial statements included or incorporated by reference in the Registration Statement, the Offering Materials and the Prospectus, together with the related schedules and notes, present fairly in all
5
material respects the financial position of the Company and its consolidated subsidiaries at the dates indicated and the statement of operations, stockholders’ equity and cash flows of the Company and its consolidated subsidiaries for the periods specified; said financial statements have been prepared in conformity with U.S. generally accepted accounting principles (“GAAP”) applied on a consistent basis throughout the periods involved. The supporting schedules, if any, present fairly in all material respects in accordance with GAAP the information required to be stated therein. The selected financial data and the summary financial information included in the Registration Statement, the Offering Materials and the Prospectus present fairly in all material respects the information shown therein and have been compiled on a basis consistent with that of the audited financial statements included therein. Except as included therein, no historical or pro forma financial statements or supporting schedules of the Company are required to be included in the documents of the Company incorporated by reference in the Registration Statement, the Offering Materials and the Prospectus under the Exchange Act. All disclosures contained in the Registration Statement, the Offering Materials or the Prospectus, or incorporated by reference therein, regarding “non-GAAP financial measures” (as such term is defined by the rules and regulations of the Commission) comply with Regulation G of the Exchange Act and Item 10 of Regulation S-K of the Securities Act, to the extent applicable. The interactive data in eXtensible Business Reporting Language included in the documents incorporated by reference in the Registration Statement, the Offering Materials and the Prospectus fairly presents the information called for in all material respects and has been prepared in accordance with the Commission’s rules and guidelines applicable thereto.
(h) No Material Adverse Change in Business. Except as otherwise stated therein, since the respective dates as of which information is given in the Registration Statement, the Offering Materials or the Prospectus, (A) there has been no material adverse change in the condition, financial or otherwise, or in the results of operations, business affairs or business prospects of the Company and its subsidiaries considered as one enterprise, whether or not arising in the ordinary course of business, other than changes relating to the economy in general or the Company and its subsidiaries’ industries in general, arising on or after the date hereof, and not specifically relating to the Company, (B) there have been no transactions entered into by the Company or any of its subsidiaries, other than those in the ordinary course of business, which are material with respect to the Company and its subsidiaries considered as one enterprise, and (C) there has been no dividend or distribution of any kind declared, paid or made by the Company on any class of its capital stock.
(i) Good Standing of the Company. The Company has been duly incorporated and is validly existing as an exempted company limited by shares in good standing under the laws of Bermuda (meaning that it has not failed to make any filing with any Bermuda governmental authority under the Companies Act 1981 of Bermuda, or to pay any Bermuda government fee or tax, which would make it liable to be struck off the Register of Companies and thereby cease to exist under the laws of Bermuda) and has corporate capacity and authority to own, lease and operate its properties and to conduct its business as described in the Registration Statement, the Offering Materials and the Prospectus and to enter into and perform its obligations under this Agreement; and the Company is duly qualified as a foreign corporation to transact business and is in good standing in each other jurisdiction in which such qualification is required, whether by reason of the ownership or leasing of property or the conduct of business, except where the failure so to qualify or to be in good standing would not result in a material
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adverse change in the condition, financial or otherwise, or in the results of operations or business affairs of the Company and its subsidiaries considered as one enterprise, whether or not arising in the ordinary course of business (a “Material Adverse Effect”), other than changes relating to the economy in general or the Company’s industry in general, arising on or after the date hereof, and not specifically relating to the Company.
(j) Good Standing of Subsidiaries. Each of LiLAC Communications Inc., organized under the laws of Delaware, VTR Finance N.V., organized under the laws of the Netherlands, CWI Caribbean Limited, organized under the laws of Barbados, Sable International Finance Limited, organized under the laws of the Cayman Islands, Coral-US Co-Borrower LLC, organized under the laws of Delaware, Cable & Wireless Communications, Inc., organized under the laws of Virginia, Liberty Communications of Puerto Rico LLC, formerly known as Liberty Cablevision of Puerto Rico LLC, organized under the laws of Puerto Rico, and Cable & Wireless Communications Limited, organized under the laws of the United Kingdom (collectively, the “Subsidiaries” and each, a “Subsidiary”), is a “significant subsidiary” of the Company (as such term is defined in Rule 1-02 of Regulation S-X), and the Company has no other subsidiary that is a “significant subsidiary” of the Company (as defined in Rule 1-02 of Regulation S-X). Each of the Subsidiaries is a wholly owned subsidiary of the Company and has been duly organized and is validly existing in good standing (to the extent such concept applies in the Subsidiary’s jurisdiction of incorporation or organization) under the laws of the jurisdiction of its incorporation or organization, has corporate or similar power and authority to own, lease and operate its properties and to conduct its business as described in the Registration Statement, the Offering Materials and the Prospectus and is duly qualified to transact business and is in good standing in each jurisdiction in which such qualification is required, whether by reason of the ownership or leasing of property or the conduct of business, except where the failure to so qualify or to be in good standing would not reasonably be expected to result in a Material Adverse Effect. Except as otherwise disclosed in the Registration Statement, the Offering Materials and the Prospectus, all of the issued and outstanding capital stock of each Subsidiary has been duly authorized and validly issued, is fully paid and non-assessable and is owned by the Company, directly or through subsidiaries, free and clear of any security interest, mortgage, pledge, lien, encumbrance, claim or equity (except for such security interests, mortgages, pledges, liens, encumbrances, claims or equities as are not, individually or in the aggregate, material to the ownership, use or value thereof or as disclosed in the Registration Statement, the Offering Materials and the Prospectus). To the knowledge of the Company, none of the outstanding shares of capital stock of any of the Subsidiaries was issued in violation of the preemptive or similar rights of any securityholder of such subsidiary.
(k) Authorization of Capital Stock. The authorized capital of the Company conforms as to legal matters to the description thereof contained in each of the Registration Statement, the Offering Materials and the Prospectus.
(l) Authorization of Agreement. This Agreement has been duly authorized, executed and delivered by the Company.
(m) Authorization of the Rights. The Rights have been duly authorized for issuance and distribution to the Holders in the Rights Offering.
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(n) Authorization of the Shares. The Shares have been duly authorized for issuance and sale to the Holders upon exercise of the Rights and, when issued and delivered by the Company upon exercise of the Rights against payment of the Subscription Price, will be validly issued, fully paid and nonassessable (which term when used herein in respect of the Company’s shares means that no further sums are required to be paid by the holders thereof in connection with the issue of such shares).
(o) Description of the Rights and the Shares. The Rights and the Shares will conform in all material respects to the respective statements relating thereto contained in the Registration Statement, the Offering Materials and the Prospectus.
(p) Registration Rights. There are no persons with registration rights or other similar rights to have any securities registered for sale or sold by the Company under the Securities Act, other than those rights that have been disclosed in the Registration Statement, the Offering Materials and the Prospectus (including the Registration Rights Agreement dated October 17, 2018, by and between Liberty Latin America, SCPV LEO, L.P., SC LEO, L.P., SC AIV LEO, L.P., Searchlight/SIP Holdco SPV II (TRI), L.P. and Searchlight LEO Co-Invest Partners, LP.) and have been waived.
(q) Absence of Violations, Defaults and Conflicts. None of the Company, any of its Subsidiaries, or, to the knowledge of the Company, any of its other subsidiaries is (A) in violation of its charter, by-laws or similar organizational document, (B) in default in the performance or observance of any obligation, agreement, covenant or condition contained in any contract, indenture, mortgage, deed of trust, loan or credit agreement, note, lease or other agreement or instrument to which the Company or any of its subsidiaries is a party or by which it or any of them may be bound or to which any of the properties or assets of the Company or any subsidiary is subject (collectively, “Agreements and Instruments”), except for such defaults that would not, singly or in the aggregate, reasonably be expected to result in a Material Adverse Effect, or (C) in violation of any law, statute, rule, regulation, judgment, order, writ or decree of any arbitrator, court, governmental body, regulatory body, administrative agency or other authority, body or agency having jurisdiction over the Company or any of its subsidiaries or any of their respective properties, assets or operations (each, a “Governmental Entity”), except for such violations that would not, singly or in the aggregate, reasonably be expected to result in a Material Adverse Effect. The execution, delivery and performance of this Agreement and any other agreement or instrument entered into or issued or to be entered into or issued by the Company in connection with the Transactions and the consummation of the Transactions (including the issuance and sale of the Shares upon exercise of the Rights and the use of the proceeds from the sale of the Shares as described in the Prospectus under the caption “Use of Proceeds”) and compliance by the Company with its obligations hereunder and thereunder have been duly authorized by all necessary corporate action and do not and will not, whether with or without the giving of notice or passage of time or both, conflict with or constitute a breach of, or default or Repayment Event (as defined below) under, or result in the creation or imposition of any lien, charge or encumbrance upon any of the respective properties or assets of the Company or any of its subsidiaries pursuant to, the Agreements and Instruments (except for such conflicts, breaches, defaults or Repayment Events or liens, charges or encumbrances that would not, singly or in the aggregate, reasonably be expected to result in a Material Adverse Effect), nor will such action result in any violation of the provisions of the charter, bye-laws or similar organizational
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document of the Company or any of its subsidiaries or any law, statute, rule, regulation, judgment, order, writ or decree of any Governmental Entity or any governmental authority having jurisdiction over the Company. As used herein, (i) a “subsidiary” of the Company means a corporation, partnership, joint venture, limited liability company or other business entity of which a majority of the shares of securities or other interests having ordinary voting power for the election of directors or other governing body (other than securities or interests having such power only by reason of the happening of a contingency) are at the time beneficially owned directly, or indirectly through one or more intermediaries, or both, by the Company and (ii) a “Repayment Event” means any event or condition which gives the holder of any note, debenture or other evidence of indebtedness (or any person acting on such holder’s behalf) the right to require the repurchase, redemption or repayment of all or a portion of such indebtedness by the Company or any of its subsidiaries.
(r) Absence of Labor Dispute. No labor dispute exists with the employees of the Company, its Subsidiaries, or to the Company’s knowledge, any of its other subsidiaries or, to the knowledge of the Company, is imminent, which would result in a Material Adverse Effect.
(s) Absence of Proceedings. Except as disclosed in the Registration Statement, the Offering Materials and the Prospectus, there is no action, suit, proceeding, inquiry or investigation before or brought by any Governmental Entity now pending or, to the knowledge of the Company, threatened, against or affecting the Company or any of its Subsidiaries or, to the knowledge of the Company, the Company’s other subsidiaries, which might reasonably be expected to result in a Material Adverse Effect, or which might materially and adversely affect their respective properties or assets or the consummation of the transactions contemplated in this Agreement or the performance by the Company of its obligations hereunder; and the aggregate of all pending legal or governmental proceedings to which the Company or any such subsidiary is a party or of which any of their respective properties or assets is the subject which are not described in the Registration Statement, the Offering Materials and the Prospectus, including ordinary routine litigation incidental to the business, could not reasonably be expected to result in a Material Adverse Effect.
(t) Accuracy of Exhibits. There are no contracts or documents which are required to be described in the Registration Statement, the Offering Materials or the Prospectus or to be filed as exhibits to the Registration Statement which have not been so described and filed as required.
(u) Absence of Further Requirements. No filing (other than routine tax filings) with, or authorization, approval, consent, license, order, registration, qualification or decree of, any Governmental Entity is necessary or required for the performance by the Company of its obligations hereunder, in connection with the offering, issuance or sale of the Rights or the Shares issued upon exercise of the Rights hereunder or the consummation of the Transactions, except such as have been already obtained or as may be required under the Securities Act, the rules of the Nasdaq Global Select Market (the “Nasdaq Market”), state securities laws or the rules of Financial Industry Regulatory Authority, Inc. (“FINRA”).
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(v) Possession of Licenses and Permits. The Company and its Subsidiaries and, to the knowledge of the Company, the Company’s other subsidiaries, possess such permits, licenses, approvals, consents and other authorizations (collectively, “Governmental Licenses”) issued by the appropriate Governmental Entities necessary to conduct the business now operated by them, except where the failure so to possess would not, singly or in the aggregate, reasonably be expected to result in a Material Adverse Effect. The Company and its Subsidiaries and, to the knowledge of the Company, the Company’s other subsidiaries are in compliance with the terms and conditions of all Governmental Licenses, except where the failure so to comply would not, singly or in the aggregate, reasonably be expected to result in a Material Adverse Effect. All of the Governmental Licenses of the Company and its Subsidiaries and, to the knowledge of the Company, the Company’s other subsidiaries are valid and in full force and effect, except when the invalidity of such Governmental Licenses or the failure of such Governmental Licenses to be in full force and effect would not, singly or in the aggregate, reasonably be expected to result in a Material Adverse Effect. None of the Company and its Subsidiaries and, to the knowledge of the Company, the Company’s other subsidiaries has received any notice of proceedings relating to the revocation or modification of any Governmental Licenses which, singly or in the aggregate, if the subject of an unfavorable decision, ruling or finding, would reasonably be expected to result in a Material Adverse Effect.
(w) Title to Property. The Company and its Subsidiaries and, to the knowledge of the Company, the Company’s other subsidiaries have good and marketable title to all material real property owned by them and good title to all other material properties owned by them, in each case, free and clear of all mortgages, pledges, liens, security interests, claims, restrictions or encumbrances of any kind except such as (A) are described in the Registration Statement, the Offering Materials and the Prospectus or (B) do not, singly or in the aggregate, materially affect the value of such property and do not interfere with the use made and proposed to be made of such property by the Company or any of its subsidiaries; and all of the leases and subleases material to the business of the Company and its subsidiaries, considered as one enterprise, and under which the Company or any of its subsidiaries holds properties described in the Registration Statement, the Offering Materials and the Prospectus, are in full force and effect.
(x) Possession of Intellectual Property. The Company and its subsidiaries own or possess, or can acquire on reasonable terms, adequate patents, patent rights, licenses, inventions, copyrights, know-how (including trade secrets and other unpatented and/or unpatentable proprietary or confidential information, systems or procedures), trademarks, service marks, trade names or other intellectual property (collectively, “Intellectual Property”) necessary to carry on the business now operated by them, other than those the failure to own or possess would not have a Material Adverse Effect, and neither the Company nor any of its subsidiaries has received any notice or is otherwise aware of any infringement of or conflict with asserted rights of others with respect to any Intellectual Property or of any facts or circumstances which would render any Intellectual Property invalid or inadequate to protect the interest of the Company or any of its subsidiaries therein, and which infringement or conflict (if the subject of any unfavorable decision, ruling or finding) or invalidity or inadequacy, singly or in the aggregate, would result in a Material Adverse Effect.
(y) Accounting Controls and Disclosure Controls. Except as described in the Registration Statement, the Offering Materials and the Prospectus, the Company and each of its subsidiaries maintain effective internal control over financial reporting (as defined under Rule 13a-15(f) under the Exchange Act) and a system of internal control over financial reporting sufficient to provide reasonable assurances that (A) transactions are executed in accordance with management’s general or specific authorization; (B) transactions are recorded as necessary to permit preparation of financial statements in conformity with GAAP and to maintain accountability for assets; (C) access to assets is permitted only in accordance with management’s general or specific authorization; and (D) the recorded accountability for assets is compared with the existing assets at reasonable intervals and appropriate action is taken with respect to any differences. Except as described in the Registration Statement, the Offering Materials and the Prospectus, since the end of the Company’s most recent audited fiscal year, there has been (1) no material weakness in the Company’s internal control over financial reporting (whether or not remediated) and (2) no change in the Company’s internal control over financial reporting that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting. Except as described in the Registration Statement, the Offering Materials and the Prospectus, the Company and each of its subsidiaries maintain an effective system of disclosure controls and procedures (as defined in Rule 13a-15(e) under the Exchange Act) that are designed to provide reasonable assurance that (A) information required to be disclosed by the Company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the Commission’s rules and forms, and is accumulated and communicated to the Company’s management, including its principal executive officer or officers and principal financial officer or officers, as appropriate, to allow timely decisions regarding disclosure and (B) the interactive data in eXtensible Business Reporting Language incorporated by reference in the Registration Statement, the Offering Materials and the Prospectus fairly presents the information called for in all material respects and is prepared in accordance with the Commission’s rules and guidelines applicable thereto.
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(z) Compliance with the Sarbanes-Oxley Act. There is and has been no failure on the part of the Company or any of the Company’s directors or officers, in their capacities as such, to comply in all material respects with any provision of the Sarbanes-Oxley Act of 2002 and the rules and regulations promulgated in connection therewith, including Section 402 related to loans and Sections 302 and 906 related to certifications.
(aa) Payment of Taxes. All United States federal income tax returns of the Company and its subsidiaries that are required by law to have been filed have been filed (taking into account any valid extensions of time within which to file) and all U.S. federal income taxes shown by such returns or otherwise assessed against the Company and its subsidiaries, which are due and payable, have been paid, except assessments against which appeals have been or will be timely taken and as to which adequate reserves have been provided. The Company and its subsidiaries have filed all other tax returns that are required to have been filed by them pursuant to applicable foreign, state, local or other law except insofar as the failure to file such returns would not result in a Material Adverse Effect, and have paid all taxes due pursuant to such returns or pursuant to any assessment received by the Company and its subsidiaries, except for such taxes, if any, as are being contested in good faith and as to which adequate reserves have been established or as to which the failure to pay would not result in a Material Adverse Effect. The charges, accruals and reserves on the books of the Company in respect of any income and corporation tax liability for any years not finally determined are adequate, except to the extent of any inadequacy that would not result in a Material Adverse Effect.
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(bb) Insurance. The Company and its Subsidiaries and, to the knowledge of the Company, the Company’s other subsidiaries carry or are entitled to the benefits of insurance, with financially sound and reputable insurers, in such amounts and covering such risks as is generally maintained by companies of established repute engaged in the same or similar business, and all such insurance is in full force and effect. The Company has no reason to believe that it or its Subsidiaries and, to the knowledge of the Company, the Company’s other subsidiaries will not be able (A) to renew its existing insurance coverage as and when such policies expire or (B) to obtain comparable coverage from similar institutions as may be necessary or appropriate to conduct its business as now conducted and at a cost that would not result in a Material Adverse Effect.
(cc) Investment Company Act. The Company is not required, and upon the issuance and sale of the Shares upon exercise of the Rights and the application of the net proceeds therefrom as described in the Registration Statement, the Offering Materials and the Prospectus will not be required, to register as an “investment company” or an entity “controlled” by an “investment company” under the Investment Company Act of 1940, as amended (the “1940 Act”).
(dd) Absence of Manipulation. Neither the Company nor any of its affiliates, as such term is defined in Rule 501(b) under the Securities Act (each, an “Affiliate”), of the Company has taken, nor will the Company or any of its Affiliates take, directly or indirectly, any action which is designed, or would be expected, to cause or result in, or which constitutes, the stabilization or manipulation of the price of any security of the Company to facilitate the sale or resale of the Shares issued upon exercise of the Rights in violation of Regulation M under the Exchange Act.
(ee) Foreign Corrupt Practices Act. None of the Company and its Subsidiaries and, to the knowledge of the Company, the Company’s other subsidiaries or any director, officer, agent, employee, Affiliate or other person acting on behalf of the Company or any of the Company’s subsidiaries (each such director, officer, agent, employee, Affiliate or other person, a “Covered Person”) is aware of or has taken any action, directly or indirectly, that would result in a violation by such persons of the Foreign Corrupt Practices Act of 1977, as amended, and the rules and regulations thereunder (the “FCPA”), including, without limitation, making use of the mails or any means or instrumentality of interstate commerce corruptly in furtherance of an offer, payment, promise to pay or authorization of the payment of any money, or other property, gift, promise to give, or authorization of the giving of anything of value to any “foreign official” (as such term is defined in the FCPA) or any foreign political party or official thereof or any candidate for foreign political office, in contravention of the FCPA and the Company and its Subsidiaries and, to the knowledge of the Company, the Company’s other subsidiaries and the Company’s Affiliates have conducted their businesses in compliance with the FCPA in all material respects and have instituted and maintain policies and procedures designed to ensure, and which are reasonably expected to continue to ensure, continued compliance therewith.
(ff) Money Laundering Laws. The operations of the Company and its Subsidiaries and, to the knowledge of the Company, the Company’s other subsidiaries are and have been conducted at all times in compliance with applicable financial recordkeeping and reporting requirements of the Currency and Foreign Transactions Reporting Act of 1970, as
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amended, the money laundering statutes of all jurisdictions, the rules and regulations thereunder and any related or similar rules, regulations or guidelines, issued, administered or enforced by any Governmental Entity (collectively, the “Money Laundering Laws”); and no action, suit or proceeding by or before any Governmental Entity involving the Company and its Subsidiaries and, to the knowledge of the Company, the Company’s other subsidiaries with respect to the Money Laundering Laws is pending or, to the best knowledge of the Company, threatened.
(gg) Sanctions. None of the Company, and its Subsidiaries and, to the knowledge of the Company, the Company’s other subsidiaries or any Covered Person is an individual or entity (“Person”) currently the subject or target of any sanctions administered or enforced by the United States Government, including, without limitation, the U.S. Department of the Treasury’s Office of Foreign Assets Control (“OFAC”), the United Nations Security Council, the European Union, Her Majesty’s Treasury, or other relevant sanctions authority (collectively, “Sanctions”), nor is the Company located, organized or resident in a country or territory that is the subject of Sanctions; and the Company will not directly or indirectly use the proceeds of the sale of the Securities, or lend, contribute or otherwise make available such proceeds to any subsidiaries, joint venture partners or other Person, to fund any activities of or business with any Person, or in any country or territory, that, at the time of such funding, is the subject of Sanctions or in any other manner that will result in a violation by any Person (including any Person participating in the transaction, whether as underwriter, advisor, investor or otherwise) of Sanctions, except as permitted by applicable law.
(hh) Data Security. Except as disclosed in the Registration Statement, the Offering Materials and the Prospectus, to the knowledge of the Company, (A) there has been no security breach or incident, unauthorized access or disclosure, or other compromise of the Company’s or its Subsidiaries or, to the knowledge of the Company, of the Company’s other subsidiaries’ information technology and computer systems, networks, hardware, software, data and databases (including the data and information of their respective customers, employees, suppliers, vendors and any third party data maintained by or on behalf of them), equipment or technology (collectively, “IT Systems and Data”); (B) neither the Company nor its Subsidiaries nor, to the knowledge of the Company, the Company’s other subsidiaries have been notified of, and have no knowledge of any event or condition that would result in, any security breach or incident, unauthorized access or disclosure or other compromise to their IT Systems and Data; and (C) the Company and its subsidiaries have implemented controls, policies, procedures, and technological safeguards to maintain and protect, in all material respects, the integrity, continuous operation, redundancy and security of their IT Systems and Data reasonably consistent with industry standards and practices, except with respect to clauses (A) and (B), for any such security breach or incident, unauthorized access or disclosure, or other compromises, events or conditions, as would not have a Material Adverse Effect. Except as would not have a Material Adverse Effect, the Company and its subsidiaries are presently in compliance with all applicable laws or statutes and all judgments, orders, rules and regulations of any court or arbitrator or governmental or regulatory authority, internal policies and contractual obligations relating to the privacy and security of IT Systems and Data and to the protection of such IT Systems and Data from unauthorized use, access, misappropriation or modification.
(ii) Exchange Listing. The Rights and the Shares have been approved for listing on the Nasdaq Market, subject to official notice of issuance.
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(jj) Indemnification and Contribution. The indemnification and contribution provisions set forth in Section 6 hereof do not contravene Bermuda law or public policy.
(kk) Passive Foreign Investment Company. The Company believes it was not a “passive foreign investment company” (“PFIC”) as defined in Section 1297 of the Code for the 2019 taxable year, and the Company does not expect to be a PFIC for foreseeable future taxable years.
(ll) Dividends. Except as disclosed in the Registration Statement, the Offering Materials and the Prospectus, no approvals (other than approval of the Company’s board of directors and compliance with the Companies Act 1981 of Bermuda) are currently required in Bermuda in order for the Company to pay dividends or other distributions declared by the Company to the holders of Shares. Under current laws and regulations of Bermuda and any political subdivision thereof, any amount payable with respect to the Shares upon liquidation of the Company or upon redemption thereof and dividends and other distributions declared and payable on the share capital of the Company may be paid by the Company in United States dollars or euros and freely transferred out of Bermuda, and no such payments made to the holders thereof or therein who are non-residents of Bermuda will be subject to income, withholding or other taxes under laws and regulations of Bermuda or any political subdivision or taxing authority thereof or therein and without the necessity of obtaining any governmental authorization in Bermuda or any political subdivision or taxing authority thereof or therein.
(mm) Legality. The legality, validity, enforceability or admissibility into evidence of any of the Registration Statement, the Offering Materials, the Prospectus, this Agreement, the Rights or the Shares in any jurisdiction in which the Company is organized or does business is not dependent upon such document being submitted into, filed or recorded with any court or other authority in any such jurisdiction on or before the date hereof or that any tax, imposition or charge be paid in any such jurisdiction on or in respect of any such document.
(nn) Legal Action. The Dealer Manager has standing to bring an action or proceedings before the appropriate courts in the jurisdiction of incorporation of the Company for the enforcement of this Agreement. It is not necessary in order for the Dealer Manager to enforce its rights under this Agreement, including the exercise of remedies hereunder, that it be licensed, qualified or otherwise entitled to carry on business in the Company’s jurisdiction of incorporation.
3. Covenants of the Company. The Company covenants and agrees with you that:
(a) The Company will advise the Dealer Manager promptly (i) when any amendment to the Registration Statement has been filed or becomes effective, (ii) when any supplement to the Prospectus or any Offering Materials or any amendment to the Prospectus has been filed or distributed, or when amendments to the Offering Materials have been distributed, (iii) of any request by the Commission for any amendment to the Registration Statement or any amendment or supplement to the Prospectus or the receipt of any comments from the Commission relating to the Registration Statement or any other request by the Commission for any additional information, (iv) of the issuance by the Commission of any order suspending the effectiveness of the Registration Statement or preventing or suspending the use of the Prospectus
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or the initiation or threatening of any proceeding for that purpose or pursuant to Section 8A of the Securities Act, (v) of the occurrence of any event or development within the Subscription Period as a result of which the Registration Statement, any of the Offering Materials, the Prospectus or any Issuer Free Writing Prospectus as then amended or supplemented would include any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances existing when the Offering Materials, the Prospectus or any such Issuer Free Writing Prospectus is delivered to a Holder, not misleading, and (vi) of the receipt by the Company of any notice with respect to any suspension of the qualification of the Rights or Shares for offer and sale in any jurisdiction or the initiation or threatening of any proceeding for such purpose; and the Company will use its commercially reasonable efforts to prevent the issuance of any such order suspending the effectiveness of the Registration Statement, preventing or suspending the use of the Prospectus or suspending any such qualification of the Rights or Shares and, if any such order is issued, will use its commercially reasonable efforts to obtain as soon as possible the withdrawal thereof. In the case of clause (v) above, the Company will promptly prepare an amendment or supplement which will correct such statement or omission or effect compliance with such requirements and, after having provided the Dealer Manager and its counsel with an reasonable opportunity to review and comment on such amendment or supplement, file with the Commission such amendment or supplement. The Company agrees to provide you with any other information relating to the Rights Offering, the Offering Materials or this Agreement that you may from time to time reasonably request.
(b) The Company will cause copies of the Prospectus and any applicable Offering Materials (other than any press releases or newspaper advertisements relating to the Rights Offering) as in effect at such time to be mailed or otherwise delivered or made available to each Holder as soon as practicable on or after the Representation Date. The Company will, without charge, furnish to the Dealer Manager, from time to time during the period when the Prospectus is required to be delivered under the Securities Act (without taking into account Rule 172 under the Securities Act), such number of printed copies of the Prospectus (as amended or supplemented) as the Dealer Manager may reasonably request for the purposes contemplated by the Securities Act. The Company authorizes you to use copies of the Offering Materials in connection with the performance of your duties hereunder.
(c) The Company agrees that, unless it has or shall have obtained the prior written consent of the Dealer Manager, the Company will not make any offer relating to the Rights or Shares that would constitute an Issuer Free Writing Prospectus or that would otherwise constitute a “free writing prospectus” (as defined in Rule 405 under the Securities Act) such as those required to be filed by the Company with the Commission or retained by the Company under Rule 433 under the Securities Act; provided that the prior written consent of the parties hereto shall be deemed to have been given in respect of the Issuer Written Communications included in Exhibit A hereto. Any such free writing prospectus consented to by the Dealer Manager is hereinafter referred to as a “Permitted Free Writing Prospectus.” The Company agrees that (x) it has treated and will treat, as the case may be, each Permitted Free Writing Prospectus as an Issuer Free Writing Prospectus, and (y) it has complied and will comply, as the case may be, with the requirements of Rules 164 and 433 under the Securities Act applicable to any Permitted Free Writing Prospectus, including in respect of timely filing with the Commission, legending and recordkeeping.
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(d) The Company will use the net proceeds from the issuance of Shares upon exercise of the Rights in the manner as described under the caption “Use of Proceeds” in the Prospectus.
(e) To the extent known, and to the extent permitted by applicable law, the Company will advise or cause the Agent to advise the Dealer Manager as to the names of all Holders exercising Rights (and, upon reasonable request by the Dealer Manager, additional contact information for such holders) and the total number of Rights exercised by each Holder during the immediately preceding day, indicating the total number of Rights verified to be in proper form for exercise and being processed; and will notify the Dealer Manager, as soon as practicable following the Expiration Date, of the total number of Rights exercised and Shares related thereto, the total number of Rights verified to be in proper form for exercise and being processed.
(f) The Company and its subsidiaries have not taken and will not take, directly or indirectly, any action designed to or that would constitute or that might reasonably be expected to cause or result in the stabilization or manipulation of the price of any security of the Company to facilitate the issuance of the Rights or the issuance and sale of the Shares pursuant to the terms of the Rights Offering.
(g) The Company will endeavor, if necessary, in cooperation with the Dealer Manager, to qualify the Rights and the Shares for offering and sale under the applicable securities laws of such states and other jurisdictions (domestic or foreign) as the Dealer Manager may designate and to maintain such qualifications in effect so long as required to consummate the Rights Offering; provided, however, that the Company shall not be obligated to file any general consent to service of process or to qualify as a foreign corporation or as a dealer in securities in any jurisdiction in which it is not so qualified or to subject itself to taxation in respect of doing business in any jurisdiction in which it is not otherwise so subject.
(h) The Company will timely file such reports pursuant to the Exchange Act as are necessary in order to make generally available to its securityholders as soon as practicable an earnings statement for the purposes of, and to provide to the Dealer Manager the benefits contemplated by, the last paragraph of Section 11(a) of the Securities Act.
(i) So long as the Rights are outstanding, the Company will furnish to you copies of all reports or other communications (financial or other) furnished to holders of the Rights, and copies of any reports and financial statements furnished to or filed with the Commission (collectively, the “Filings”), except for all such Filings filed by the Company with the Commission in electronic format on EDGAR.
(j) The Company will comply in all material respects with the Securities Act and the Exchange Act, as applicable, and the rules of the Nasdaq Market, in conducting the Rights Offering and the issuance of Shares pursuant thereto as contemplated in the Registration Statement, the Prospectus and the Offering, each as amended or supplemented.
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(k) Subsequent to the date of the Prospectus and for so long as the delivery of a prospectus is required in connection with the offering or sale of the Rights, the Company will file all reports and documents required to be filed by the Company with the Commission pursuant to the Exchange Act within the time periods required by the Securities Act or the Exchange Act, as applicable.
4. Conditions to Obligations of the Dealer Manager. The obligations of the Dealer Manager hereunder are subject to the accuracy of the representations and warranties of the Company contained herein, to the performance by the Company of its covenants and other obligations hereunder and to the following additional conditions:
(a) The Dealer Manager shall have received on and as of the Representation Date and on the Expiration Date, a certificate of the Chief Executive Officer or any Senior Vice President of the Company and of the chief financial or chief accounting officer of the Company, satisfactory to you, in which such officer, to the best of his or her knowledge after reasonable investigation, shall state: that the representations and warranties of the Company set forth in Section 2 of this Agreement are true and correct at and as of such dates; that the Company has complied with all agreements and satisfied all conditions on its part to be performed or satisfied hereunder at or prior to such dates; that subsequent to the respective dates as of which information is given in the Registration Statement, there has not been any event or development with respect to the Company and its subsidiaries taken as a whole that would reasonably be expected to result in a Material Adverse Effect, other than as set forth or contemplated in the Registration Statement. The officers signing the certificate may state that in making the statements set forth therein they have relied, to the extent they deem proper, upon one or more certificates of officers of subsidiaries of the Company.
(b) On the Representation Date and on the Expiration Date, Sidley Austin LLP, counsel to you, shall have furnished to you, as Dealer Manager, their written opinion and negative assurance letter, dated the respective date of delivery thereof, with respect to such matters as you may reasonably request and such counsel shall have received such papers and information as they may reasonably request to enable them to pass on such matters.
(c) On the Representation Date and on the Expiration Date, (i) Baker Botts L.L.P., counsel to the Company, shall have furnished to you, as Dealer Manager, their written opinion and negative assurance letter, dated the respective date of delivery thereof, in form and substance reasonably satisfactory to you, to the effect set forth in Exhibit B-1; (ii) Conyers Dill & Pearman Limited, Bermuda counsel for the Company, shall have furnished to you, as Dealer Manager, their opinion, dated the respective date of delivery thereof, in form and substance reasonably satisfactory to you, to the effect set forth in Exhibit B-2; (iii) Allen & Overy LLP, Netherlands counsel for the Company, shall have furnished to you, as Dealer Manager, their opinion, dated the respective date of delivery thereof, in form and substance reasonably satisfactory to you, to the effect set forth in Exhibit B-3; (iv) McConnell Valdés LLC, Puerto Rico counsel for the Company, shall have furnished to you, as Dealer Manager, their opinion, dated the respective date of delivery thereof, in form and substance reasonably satisfactory to you, to the effect set forth in Exhibit B-4; (v) Baker Botts (UK) LLP, English counsel for the Company, shall have furnished to you, as Dealer Manager, their opinion, dated the respective date of delivery thereof, in form and substance reasonably satisfactory to you, to the effect set forth in Exhibit B-5; (vi) Nelson Mullins Riley & Scarborough LLP, counsel for the Company, shall have furnished to you, as Dealer Manager, their opinion, dated the respective date of
17
delivery thereof, in form and substance reasonably satisfactory to you, to the effect set forth in Exhibit B-6; and (vii) the Chief Legal Officer of the Company, shall have furnished to you, as Dealer Manager, his opinion, dated the respective date of delivery thereof, in form and substance reasonably satisfactory to you, to the effect set forth in Exhibit B-7. Such counsel may state that, insofar as such opinion involves factual matters, they have relied, to the extent they deem proper, upon certificates of officers and other representatives of the Company and its subsidiaries and certificates of public officials.
(d) (i) On the Representation Date, KPMG LLP shall have furnished to you, at the request of the Company, a letter, dated the Representation Date, in form and substance reasonably satisfactory to you, containing statements and information of the type ordinarily included in accountants’ “comfort letters” to underwriters with respect to the financial statements and certain financial information contained or incorporated by reference in the Registration Statement, the applicable Offering Materials and the Prospectus. (ii) On the Expiration Date, KPMG LLP shall have furnished to you, at the request of the Company, a letter, dated the Expiration Date, to the effect that they reaffirm the statements made in the letter furnished pursuant to clause (i) of this Section 4(d), except that the “cut-off” date referred to shall be a date not more than three business days prior to the Expiration Date. Each such letter pursuant to this Section 4(d) shall use a “cut-off” date no more than three business days prior to the respective date of delivery.
(e) No order suspending the effectiveness of the Registration Statement shall be in effect, and no proceeding for such purpose or pursuant to Section 8A under the Securities Act shall be pending before or threatened by the Commission; the Prospectus and each Issuer Free Writing Prospectus shall have been timely filed with the Commission under the Securities Act (in the case of an Issuer Free Writing Prospectus, to the extent required by Rule 433 under the Securities Act) and in accordance with Section 3(a) hereof; and all requests by the Commission for additional information with regard to the Rights Offering shall have been complied with to the reasonable satisfaction of the Dealer Manager.
(f) No event or condition of a type described in Section 2(h) hereof shall have occurred or shall exist, which event or condition is not described in the Offering Materials (excluding any amendment or supplement thereto) and the Prospectus (excluding any amendment or supplement thereto) and the effect of which in the judgment of the Dealer Manager makes it impracticable or inadvisable to proceed with the Rights Offering or the delivery of the Shares on the terms and manner described in the Registration Statement and the Prospectus.
(g) No action shall have been taken and no statute, rule, regulation or order shall have been enacted, adopted or issued by any federal, state or foreign governmental or regulatory authority that would prevent the making or consummation of the Rights Offering or the issuance of the Shares upon exercise of the Rights or prevent the Dealer Manager from rendering services pursuant to this Agreement or continuing so to act, as the case may be; and no injunction or order of any federal, state or foreign court shall have been issued that would prevent the making or consummation of the Rights Offering or the issuance of the Shares upon exercise of the Rights or prevent the Dealer Manager from rendering services pursuant to this Agreement or continuing so to act.
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(h) On or prior to the Representation Date and Expiration Date, the Company shall have furnished to the Dealer Manager such further information, certificates and documents as the Dealer Manager may reasonably request. All opinions, letters, certificates and evidence mentioned above or elsewhere in this Agreement shall be deemed to be in compliance with the provisions hereof only if they are in form and substance reasonably satisfactory to counsel for the Dealer Manager.
5. Compensation and Expenses.
(a) The Company agrees to pay the Dealer Manager, as compensation for its services as Dealer Manager in connection with the Rights Offering, aggregate fees of $1,000,000. The foregoing fee will be payable on the date of the issuance of the Shares or such other date as may be agreed by the Company and you. Such fee will not be payable unless the Rights Offering is consummated.
(b) The Company further agrees to pay directly or reimburse the Dealer Manager for (i) all fees and expenses incurred in relation to the preparation, printing, filing, mailing or other distribution of the Prospectus and any Offering Materials, (ii) all fees and expenses of the Agent (including counsel therefor), (iii) all advertising charges in connection with the Rights Offering, including those of any public relations firm or other person or entity rendering services in connection therewith, (iv) all fees, if any, payable to Dealers (including the Dealer Manager) and banks and trust companies as reimbursement for their customary mailing and handling fees and expenses incurred in forwarding the Offering Materials to their customers, (v) the preparation, printing, authentication, issuance and delivery of the Rights or the Shares issuable on exercise of the Rights, including any stamp, transfer or similar taxes in connection with the Rights Offering, (vi) the preparation, printing (or reproduction) and delivery of this Agreement and all other agreements or documents prepared, printed (or reproduced) and delivered in connection with the Rights Offering, (vii) any fees and expenses relating to the registration or qualification of the Rights and Shares under the securities or blue sky laws of the several states of the United States, (viii) any filings required to be made with FINRA, (ix) the transportation and other expenses incurred by or on behalf of representatives of the Company and the Dealer Manager in connection with investor presentations, (x) the fees and expenses of the accountants of the Company and the fees and expenses of counsel (including local and special counsel) for the Company, (xi) the fees and expenses of the transfer agent (and any counsel therefor), (xii) the documented fees and disbursements of the Dealer Manager’s outside legal counsel, and (xiii) all expenses and application fees related to the Rights being made eligible for clearance and settlement through DTC and for the listing on the Nasdaq Market. The Dealer Manager agrees to pay all fees and expenses incurred by the Dealer Manager in connection with the Rights Offering or otherwise in connection with the performance of services hereunder, excluding the fees and disbursements of the Dealer Manager’s outside legal counsel.
6. Indemnification and Contribution.
(a) The Company agrees to indemnify and hold harmless the Dealer Manager, its affiliates, directors and officers and each person, if any, controlling (within the meaning of either Section 15 of the Securities Act or Section 20 of the Exchange Act) the Dealer Manager or any such other persons (each, a “Dealer Manager Indemnified Person”) from and against any and
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all losses, claims, damages and liabilities (or actions or proceedings in respect thereof), whether or not in connection with pending or threatened litigation to which the Dealer Manager (or any other Indemnified Person) may be a party, in each case as such expenses are incurred or paid, arising out of or based upon (A) any untrue statement or alleged untrue statement of a material fact contained in the Registration Statement (or any amendment thereto), or any omission or alleged omission to state therein a material fact required to be stated therein or necessary in order to make the statements therein not misleading; provided that the Company will not be liable in any such case to the extent that any such loss, claim, damage or liability is based upon any such untrue statement or alleged untrue statement or omission made in the Dealer Manager Information, or (B) any untrue statement or alleged untrue statement of a material fact contained in the Prospectus, any road show as defined in Rule 433(h) under the Securities Act (a “road show”) or any Offering Materials, or any omission or alleged omission to state therein a material fact necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading; provided that the Company will not be liable in any such case to the extent that any such loss, claim, damage or liability is based upon any such untrue statement or alleged untrue statement or omission made in the Dealer Manager Information or any claim, litigation, investigation (including any governmental or regulatory investigation) or proceedings relating to the foregoing (“Proceedings”) regardless of whether any of such Indemnified Persons is a party thereto, and to reimburse such Indemnified Persons for any and all expenses (including, without limitation, reasonable and documented fees and disbursements of counsel and other out-of-pocket expenses) as they are incurred in connection with investigating, responding to or defending any of the foregoing.
(b) The Dealer Manager agrees to indemnify and hold harmless the Company, its directors and officers, and each person, if any who controls the Company within the meaning of either Section 15 of the Securities Act or Section 20 of the Exchange Act (a “Company Indemnified Person” and, together with the Dealer Manager Indemnified Persons, each an “Indemnified Person”) from and against any and all losses, claims, damages and liabilities described in subsection (a) of this Section 6, as incurred, but only with respect to any untrue statement or alleged untrue statement of a material fact contained in the Registration Statement (or any amendment thereto), Prospectus, any road show or Offering Materials or any omission or alleged omission to state therein a material fact required to be stated therein or necessary in order to make the statements therein not misleading, but only to the extent such statement is made based upon any untrue statement or alleged untrue statement or omission made in the Dealer Manager Information.
(c) If for any reason the foregoing indemnification is unavailable to any Indemnified Person or insufficient to hold it harmless, then the Company on one hand, and the Dealer Manager on the other shall contribute to the amount paid or payable by such Indemnified Person as a result of such loss, claim, damage, liability or expense (i) in such proportion as is appropriate to reflect the relative benefits received by the Company, on the one hand, and by the Dealer Manager, on the other hand, from the Rights Offering, or (ii) if the allocation provided by the foregoing clause (i) is not permitted by applicable law, in such proportion as is appropriate to reflect not only the relative benefits referred to in the foregoing clause (i), but also the relative fault of the Company, on the one hand, and of the Dealer Manager, on the other hand, in connection with the statements, actions, or omissions which resulted in such loss, claim, damage, liability or expense, as well as any other relevant equitable considerations. The relative benefits
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received by the Company, on the one hand, and by the Dealer Manager, on the other hand, shall be deemed to be in the same proportion as (i) the aggregate amount of gross proceeds received upon exercise of the Rights bears to (ii) the aggregate fee paid to the Dealer Manager pursuant to Section 5 of this Agreement. The relative fault of the Company, on the one hand, and of the Dealer Manager, on the other hand, (i) in the case of an untrue or alleged untrue statement of a material fact or an omission or alleged omission to state a material fact, shall be determined by reference to, among other things, whether such statement or omission relates to information supplied by the Company or by the Dealer Manager and the parties’ relative intent, knowledge, access to information, and opportunity to correct or prevent such statement or omission, and (ii) in the case of any other action or omission, shall be determined by reference to, among other things, whether such action or omission was taken or omitted to be taken by the Company or by the Dealer Manager and the parties’ relative intent, knowledge, access to information, and opportunity to prevent such action or omission. The Company and the Dealer Manager agree that it would not be just and equitable if contribution pursuant to this Section 6 were determined by pro rata allocation or by any other method of allocation which does not take account of the equitable considerations referred to in this paragraph. The amount paid or payable by an Indemnified Person as a result of the losses, claims, damages, liabilities or expenses referred to in this paragraph shall be deemed to include, subject to the limitations set forth above, any reasonable legal or other expenses reasonably incurred by such Indemnified Person in connection with investigating or defending any such action or claim. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation.
(d) Promptly after the receipt by an Indemnified Person of notice of the commencement of any Proceedings, such Indemnified Person will, if a claim is to be made under Sections 6(a) or (b) of this Agreement, notify the Company and the Dealer Manager (if the claim is made under Section 6(b)) (each being referred to herein as an “Indemnifying Party”) in writing of the commencement thereof; provided that (i) the failure to so notify will not relieve the Indemnifying Party from any liability which it may have hereunder except to the extent it has been materially prejudiced (through forfeiture of substantive rights or defenses) by such failure, and (ii) the failure to so notify will not relieve the Indemnifying Party from any liability which it may have to an Indemnified Person otherwise than on account of this indemnity agreement. In case any such Proceedings are brought against any Indemnified Person and it notifies the Indemnifying Party of the commencement thereof, the Indemnifying Party will be entitled to participate therein and, to the extent that the Indemnifying Party may elect by written notice delivered to such Indemnified Person, to assume the defense thereof, with counsel reasonably satisfactory to such Indemnified Person, provided that if the defendants in any such Proceedings include both such Indemnified Person and the Indemnifying Party and such Indemnified Person shall have concluded that there may be legal defenses available to it which are different from or additional to those available to the Indemnifying Party, such Indemnified Person shall have the right to select separate counsel to assert such legal defenses and to otherwise participate in the defense of such Proceedings on behalf of such Indemnified Person. Upon receipt of notice from the Indemnifying Party to such Indemnified Person of its election so to assume the defense of such Proceedings and approval by such Indemnified Person of counsel, the Indemnifying Party shall not be liable to such Indemnified Person for expenses incurred by such Indemnified Person in connection with the defense thereof (other than reasonable costs of investigation) unless (i) such Indemnified Person shall have employed separate counsel in connection with the
21
assertion of legal defenses in accordance with the proviso to the immediately preceding sentence (it being understood, however, that the Indemnifying Party shall not be liable for the expenses of more than one separate counsel (in addition to any local counsel), approved by the Dealer Manager, in the case of a Dealer Manager Indemnified Person, or by the Company, in the case of a Company Indemnified Person, representing the Indemnified Persons who are parties to such Proceedings), (ii) the Indemnifying Party shall not have employed counsel reasonably satisfactory to such Indemnified Person to represent such Indemnified Person within a reasonable time after notice to the Indemnifying Party of commencement of the Proceedings, or (iii) the Indemnifying Party has authorized in writing the employment of counsel for such Indemnified Person.
(e) An Indemnified Party shall be liable for any settlement of any Proceedings effected without the Indemnifying Party’s written consent (which consent shall not be unreasonably withheld or delayed), but if settled with the Indemnifying Party’s written consent, the Indemnifying Party agrees to indemnify and hold harmless each Indemnified Person from and against any and all losses, claims, damages, liabilities and expenses by reason of such settlement. Notwithstanding the foregoing sentence, if at any time an Indemnified Person shall have requested that an Indemnifying Party reimburse such Indemnified Person for legal or other expenses in connection with investigating, responding to or defending any Proceedings as contemplated by this Section 6, the Indemnifying Party shall be liable for any settlement of any Proceedings effected without the Indemnifying Party’s written consent if (i) such settlement is entered into more than 45 days after receipt by the Indemnifying Party of such request for reimbursement, (ii) such Indemnifying party shall have received notice of the terms of such settlement at least 30 days prior to such settlement being entered into, and (iii) the Indemnifying Party shall not have reimbursed such Indemnified Person in accordance with such request prior to the date of such settlement. The Indemnifying Party shall not, without the prior written consent of an Indemnified Person, effect any settlement of any pending or threatened Proceedings in respect of which indemnification could have been sought hereunder by such Indemnified Person, unless such settlement (i) includes an unconditional release of such Indemnified Person, in form and substance satisfactory to such Indemnified Person, from all liability on claims that are the subject matter of such Proceedings, and (ii) does not include any statement as to or any admission of fault, culpability or a failure to act by or on behalf of any Indemnified Person.
(f) The indemnity, reimbursement and contribution obligations under this Section 6 shall be in addition to any liability which the applicable Indemnifying Party may otherwise have to an Indemnified Person and shall be binding upon and inure to the benefit of any successors, assigns, heirs and personal representatives of the Indemnified Person.
7. Termination. This Agreement shall terminate upon the earlier to occur of (i) the issuance of Shares pursuant to the exercise of Rights, and (ii) the earlier withdrawal or termination of the Rights Offering. This Agreement may be terminated by either the Company or you at any time, with or without cause, effective upon receipt by the other party of written notice to that effect.
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8. Survival. The provisions of Sections 1(d), 2, 5, 6, 9, 10, 11, 12 and 17 hereof shall remain operative and in full force and effect regardless of (i) any failure by the Company to commence, or the withdrawal, termination or consummation of, the Rights Offering or issuance of Shares upon exercise of the Rights, (ii) any investigation made by or on behalf of any party hereto, (iii) any withdrawal by you as a Dealer Manager, and (iv) any termination of this Agreement.
9. Certain Defined Terms. For purposes of this Agreement, (a) except where otherwise expressly provided, the term “affiliate” has the meaning set forth in Rule 405 under the Securities Act; (b) the term “business day” means any day other than a day on which banks are permitted or required to be closed in New York City; (c) the term “subsidiary” has the meaning set forth in Rule 405 under the Securities Act; and (d) the term “significant subsidiary” has the meaning set forth in Rule 1-02 of Regulation S-X under the Exchange Act.
10. Notices. All notices and other communications required or permitted to be given under this Agreement shall be in writing and shall be given (and shall be deemed to have been given upon receipt) by delivery in person, by telecopy, by e-mail or by registered or certified mail (postage prepaid, return receipt requested) to the applicable party at the addresses indicated below:
(a) if to J.P. Morgan Securities LLC:
J.P. Morgan Securities LLC
383 Madison Avenue
New York, New York 10179
Facsimile: (212) 834-6081
Attention: Equity Syndicate Desk
with a copy to:
Sidley Austin LLP
787 Seventh Avenue
New York, New York 10019
Facsimile: (212) 839-5599
Attention: Robert Mandell
Email: rmandell@sidley.com
(b) if to the Company:
Liberty Latin America Ltd.
1550 Wewatta Street, Suite 750
Denver, Colorado 80202
Facsimile: (720) 398-3330
Attention: John Winter
Email: j@lla.com
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with a copy to:
Baker Botts L.L.P.
30 Rockefeller Plaza
New York, NY 10112
Facsimile: (212) 408-2501
Attention: Adorys Velazquez
Email: adorys.velazquez@bakerbotts.com
11. Governing Law; Waiver of Jury Trial. This Agreement and any claim, controversy or dispute arising under or related to this Agreement shall be governed by and construed in accordance with the laws of the State of New York. The Company and you irrevocably agree to waive trial by jury in any action, proceeding, claim or counterclaim brought by or on behalf of any party related to or arising out of this Agreement or the performance of services hereunder.
12. Benefit. This Agreement, including any right to indemnity or contribution hereunder, shall inure to the benefit of and be binding upon the Company, the Dealer Manager and the other Indemnified Persons, and their respective successors and assigns. Subject to the foregoing, nothing in this Agreement is intended, or shall be construed, to give to any other person or entity any right hereunder or by virtue hereof.
13. Consent to Jurisdiction. Any legal suit, action or proceeding arising out of or based upon, relating to or in connection with this Agreement or the transactions contemplated hereby (“Related Proceedings”) may be instituted in the federal courts of the United States of America located in the City and County of New York or the courts of the State of New York in each case located in the Borough of Manhattan, New York City (collectively, the “Specified Courts”), and each party irrevocably submits to the non-exclusive jurisdiction of the Specified Courts in any Related Proceedings. Service of any process, summons, notice or document by mail to such party’s address set forth above shall be effective service of process for any Related Proceedings brought in any Specified Court. The parties irrevocably and unconditionally waive, to the fullest extent they may effectively do so, any objection to the laying of venue of any Related Proceedings in the Specified Courts and irrevocably and unconditionally waive and agree not to plead or claim in any Specified Court that any Related Proceedings brought in any Specified Court has been brought in an inconvenient forum. The Company irrevocably appoints LiLAC Communications Inc., 1550 Wewatta Street, Suite 710, Denver, CO 80202 as its agent to receive service of process or other legal summons for purposes of any Related Proceedings that may be instituted in any Specified Court.
14. Judgement Currency. If for the purposes of obtaining judgment in any court it is necessary to convert a sum due hereunder into any currency other than U.S. dollars, the parties hereto agree, to the fullest extent that they may effectively do so and to the extent permitted by law, that the rate of exchange used shall be the rate at which in accordance with normal banking procedures the Dealer Manager could purchase U.S. dollars with such other currency in the Borough of Manhattan, New York City, on the New York business day preceding that on which final judgment is given. The obligations of the Company in respect of any sum due from them to the Dealer Manager shall, notwithstanding any judgment in any currency other than U.S. dollars, not be discharged until the first New York business day following receipt by the Dealer Manager of any sum adjudged to be so due in such other currency, on which (and only to the extent that)
24
the Dealer Manager may in accordance with normal banking procedures purchase U.S. dollars with such other currency; if the U.S. dollars so purchased are less than the sum originally due to the Dealer Manager hereunder, the Company agrees, as a separate obligation and notwithstanding any such judgment, to indemnify the Dealer Manager against such loss. If the U.S. dollars so purchased are greater than the sum originally due to the Dealer Manager hereunder, the Dealer Manager agrees to pay to the Company an amount equal to the excess of the U.S. dollars so purchased over the sum originally due to the Dealer Manager hereunder.
15. Waiver of Immunities. To the extent that the Company or any of its properties, assets or revenues may have or may hereafter become entitled to, or have attributed to them, any right of immunity, on the grounds of sovereignty, from any legal action, suit or proceeding, from set-off or counterclaim, from the jurisdiction of any court, from service of process, from attachment upon or prior to judgment, or from attachment in aid of execution of judgment, or from execution of judgment, other legal process or proceeding for the giving of any relief or for the enforcement of any judgment, in any jurisdiction in which proceedings may at any time be commenced, with respect to their obligations, liabilities or any other matter under or arising out of or in connection with this Agreement, the Company hereby irrevocably and unconditionally, to the extent permitted by applicable law, waives and agrees not to plead or claim any such immunity and consents to such relief and enforcement.
16. Miscellaneous. This Agreement contains the entire agreement between the parties relating to the subject matter hereof and supersedes all prior understandings, agreements and arrangements, written or oral, with respect thereto. This Agreement may not be amended or modified except by a writing executed by each of the parties hereto. Section headings herein are for convenience only and are not a part of this Agreement. In the event that any provision hereof shall be determined to be invalid or unenforceable in any respect, such determination shall not affect such provision in any other respect or any other provision hereof, which shall remain in full force and effect. This Agreement may not be assigned by any party hereto without the prior written consent of each other party. None of the parties hereto shall be responsible or have any liability to any other party for any indirect, special or consequential damages arising out of or in connection with this Agreement or the Transactions, even if advised of the possibility thereof. This Agreement may be executed in counterparts, each of which will be deemed an original, but all of which taken together will constitute one and the same instrument. Counterparts may be delivered via facsimile, electronic mail (including any electronic signature covered by the U.S. federal ESIGN Act of 2000, Uniform Electronic Transactions Act, the Electronic Signatures and Records Act or other applicable law, e.g., www.docusign.com (any such signature, an “Electronic Signature”)) or other transmission method and any counterpart so delivered shall be deemed to have been duly and validly delivered and be valid and effective for all purposes. The words “execution,” “signed,” “signature,” and words of like import in this Agreement or in any other certificate, agreement or document related to this Agreement shall include any Electronic Signature, except to the extent electronic notices are expressly prohibited under this Agreement.
17. Recognition of the U.S. Special Resolution Regimes.
(a) In the event that the Dealer Manager is a Covered Entity that becomes subject to a proceeding under a U.S. Special Resolution Regime, the transfer from such Dealer Manager of this Agreement, and any interest and obligation in or under this Agreement, will be
25
effective to the same extent as the transfer would be effective under the U.S. Special Resolution Regime if this Agreement, and any such interest and obligation, were governed by the laws of the United States or a state of the United States.
(b) In the event that the Dealer Manager is a Covered Entity or a BHC Act Affiliate of the Dealer Manager becomes subject to a proceeding under a U.S. Special Resolution Regime, Default Rights under this Agreement that may be exercised against the Dealer Manager are permitted to be exercised to no greater extent than such Default Rights could be exercised under the U.S. Special Resolution Regime if this Agreement were governed by the laws of the United States or a state of the United States.
As used in this Section 17:
“BHC Act Affiliate” of a party means an “affiliate” (as such term is defined under, and interpreted in accordance with, 12 U.S.C. 1841(k)) of such party.
“Covered Entity” means any of the following:
| (i) | a “covered entity” as that term is defined in, and interpreted in accordance with, 12 C.F.R. § 252.82(b); |
| (ii) | a “covered bank” as that term is defined in, and interpreted in accordance with, 12 C.F.R. § 47.3(b); or |
| (iii) | a “covered FSI” as that term is defined in, and interpreted in accordance with, 12 C.F.R. § 382.2(b). |
“Default Right” has the meaning assigned to that term in, and shall be interpreted in accordance with, 12 C.F.R. §§ 252.81, 47.2 or 382.1 as applicable.
“Insolvency Proceeding” means a receivership, insolvency, liquidation, resolution, or similar proceeding.
“U.S. Special Resolution Regime” means each of (i) the Federal Deposit Insurance Act and the regulations promulgated thereunder, and (ii) Title II of the Dodd-Frank Wall Street Reform and Consumer Protection Act and the regulations promulgated thereunder.
Please indicate your willingness to act as Dealer Manager and your acceptance of the foregoing provisions by signing in the space provided below for that purpose and returning to us a copy of this Agreement so signed, whereupon this Agreement and your acceptance shall constitute a binding agreement among the Company and you.
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| Very truly yours,
LIBERTY LATIN AMERICA LTD. | ||
| By: |
| |
| Name: | ||
| Title: | ||
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Accepted as of the
date first above written:
| J.P. MORGAN SECURITIES LLC. | ||
| By: |
| |
| Name: | ||
| Title: | ||
28
EXHIBIT A
[Issuer Written Communications]
29
EXHIBIT B-1
[Form of Opinion of Baker Botts L.L.P.]
30
EXHIBIT B-2
[Form of Opinion of Conyers Dill & Pearman Limited]
31
EXHIBIT B-3
[Form of Opinion of Allen & Overy LLP]
32
EXHIBIT B-4
[Form of Opinion of McConnell Valdés LLC]
33
EXHIBIT B-5
[Form of Opinion of Baker Botts (UK) LLP]
34
EXHIBIT B-6
[Form of Opinion of Nelson Mullins Riley & Scarborough LLP]
35
EXHIBIT B-7
[Form of Opinion of the Chief Legal Officer of the Company]
36
Exhibit 4.2
|
LIBERTY LATIN AMERICA LTD. |
|
LIBERTY LATIN AMERICA LTD. CLASS C RIGHTS CERTIFICATE
|
|
CLASS C RIGHTS CERTIFICATE TO SUBSCRIBE FOR LIBERTY LATIN AMERICA LTD. CLASS C COMMON SHARES FOR HOLDERS OF RECORD OF LIBERTY LATIN AMERICA LTD. CLASS A COMMON SHARES, CLASS B COMMON SHARES AND CLASS C COMMON SHARES AT 5:00 P.M., NEW YORK CITY TIME, ON SEPTEMBER 8, 2020. EXERCISABLE ON OR BEFORE 5:00 P.M., NEW YORK CITY TIME, ON SEPTEMBER 25, 2020, UNLESS EXTENDED BY THE COMPANY. |
As the registered owner of the rights certificate below (the “Rights Certificate”), you are entitled to subscribe for the number of Class C common shares, par value $0.01 per share (the “Class C Common Shares” or “LILAK”), of Liberty Latin America Ltd., a Bermuda exempted company (the “Company”), shown above and below. Each whole transferable subscription right (each a “Right”) entitles the holder to subscribe for and purchase one Class C Common Share (the “Basic Subscription Privilege”) at a subscription price per share equal to $7.14 (the “Subscription Price”), pursuant to a rights offering (the “Rights Offering”). If any Class C Common Shares available for purchase in the Rights Offering are not purchased by the Rightsholders pursuant to the exercise of their Basic Subscription Privilege (the “Excess Shares”), any Rightsholder fully exercising its Basic Subscription Privilege hereunder may also subscribe for a number of Excess Shares pursuant to the terms and conditions of the Rights Offering, subject to proration (the “Oversubscription Privilege”) as described in the prospectus relating to the Rights Offering, dated September 10, 2020, forming a part of the Company’s Registration Statement on Form S-3 (the “Prospectus”).
If you choose to exercise your Rights, your completed Rights Certificate must be received by 5:00 p.m., New York City time, on September 25, 2020, which is the Expiration Time (unless extended by the Company). If you choose to sell or transfer your Rights, your completed Rights Certificate must be received by the Subscription Agent by 5:00 P.M., New York City time, on September 18, 2020 (five business days prior to the Expiration Time, as may be adjusted in the event of an extension of the Expiration Time).
FOR A MORE COMPLETE DESCRIPTION OF THE TERMS AND CONDITIONS OF THE RIGHTS OFFERING, PLEASE REFER TO THE PROSPECTUS, WHICH IS INCORPORATED HEREIN BY REFERENCE. COPIES OF THE PROSPECTUS ARE AVAILABLE UPON REQUEST FROM THE INFORMATION AGENT, INNISFREE M&A INCORPORATED, AT (212) 750-5833 (FOR BANKS AND BROKERS) OR (877) 750-8312 (TOLL FREE).
EXERCISABLE ON OR BEFORE 5:00 P.M., NEW YORK CITY TIME, ON SEPTEMBER 25, 2020 UNLESS EXTENDED BY THE COMPANY (THE “EXPIRATION TIME”)
(Complete appropriate section on subsequent pages of this form.)
The Company is conducting a Rights Offering, which entitles holders of the Company’s Class A common shares, par value $0.01 per share (“Class A Common Shares”), Class B common shares, par value $0.01 per share (“Class B Common Shares”), and Class C Common Shares to receive 0.2690 of a Right for each Class A Common Share, Class B Common Share, or Class C Common Share held by them as of 5:00 P.M. New York City time, on September 8, 2020 (the “Record Date”). Each whole Right entitles the holder to subscribe for one Class C Common Share pursuant to its Basic Subscription Privilege and, if its Basic Subscription Privilege is fully exercised, to subscribe for additional Class C Common Shares pursuant to its Oversubscription Privilege. If the aggregate Subscription Price delivered or transmitted by the Rightsholder with the Rights Certificate exceeds the aggregate Subscription Price for all shares for which the Rightsholder would be entitled to subscribe pursuant to its Basic Subscription Privilege and no direction is given as to the excess, such Rightsholder will be deemed to have subscribed for a number of Excess Shares equal to the maximum whole number of Excess Shares that could be purchased with such excess Subscription Price. Class C Common Shares purchased pursuant to the Rights Offering will be issued by the Transfer Agent as soon as practicable following the Expiration Time. No fractional Rights or cash in lieu thereof were issued or paid and fractional Rights were rounded up to the nearest whole Right, as described in the Prospectus. Set forth herein is the number of Rights evidenced by this Rights Certificate that the Rightsholder is entitled to exercise pursuant to such Rightsholder’s Basic Subscription Privilege. If Class A Common Shares, Class B Common Shares, or Class C Common Shares applicable to a subscription are held by more than one record holder, the Rights Certificate must be signed by each such holder; if a holder or joint holders (registrants) hold more than one position in the Company, as indicated by different accounts on the relevant record holder list, then separate, properly completed and executed Rights Certificates must be submitted for each such position held by that or those joint holders (registrants).
This Rights Certificate is transferable and may be combined or divided (but only into Rights Certificates evidencing full rights) at the office of the Subscription Agent. Rightsholders should be aware that if they choose to exercise, assign, transfer or sell only part of their Rights they may not receive a new Rights Certificate in sufficient time to exercise, assign, transfer or sell the remaining Rights evidenced thereby.
| Signature of Owner and U.S. Person for Tax Certification | Signature of Co-Owner (if more than one registered holder listed) | Date (mm/dd/yyyy) | ||||||
For questions and to request copies of materials, call the Information Agent – Innisfree M&A Incorporated, at (212) 750-5833 (for banks and brokers) or (877) 750-8312 (toll free)
Please complete and return, as described below, on or before the dates outlined below.
SUBSCRIPTION AGENT: Computershare, N.A.
| By First Class Mail: |
By Registered, Certified or Express Mail, or Overnight Courier: | |
| Computershare, N.A. | Computershare, N.A. | |
| Liberty Latin America Rights Offering | Liberty Latin America Rights Offering | |
| P.O. Box 43011 | 150 Royall Street, Suite V | |
| Providence, RI 02940-3011 | Canton, MA 02021 |
To participate in the Rights Offering available through your shares held through Computershare you must follow the instructions and complete the relevant section(s) below, sign and date the front page of this document, and return this signed Rights Certificate, with payment or any additional documents if applicable, to the Subscription Agent listed above. Check all boxes below that apply.
1. Exercise Your Rights and Subscribe for Class C Common Shares
To subscribe for shares under the Basic Subscription Privilege, please complete Sections 1.A and 1.C below. If you wish to subscribe for shares under the Oversubscription Privilege as well, you must also complete Section 1.B below. This Form of Exercise, Sale or Transfer and payment to the Subscription Agent must be received by 5:00 p.m., New York City time, on September 25, 2020, which is the Expiration Time (unless extended by the Company). Funds must clear your account before the Expiration Time. Please note that personal checks may take approximately five business days to clear your account. Please see paragraph 1 of the instructions accompanying this Rights Certificate.
☐ A. Basic Subscription Privilege: By checking this box, you will exercise your Rights at the discounted price of $7.14 per share. Please complete the fields below.
| _______________ | x | $7.14 | = | $_____________ | (One Right = One LILAK share) | |||||
| (no. of shares) | (Subscription price) |
(amount to pay) |
|
Example: 100 LILAK shares x $7.14 = $714
|
☐ B. Oversubscription Privilege: By checking this box, you will exercise your right to oversubscribe for additional shares (only available when you fully subscribe for the Rights available to you in Section 1.A above). Please complete the fields below.
| _______________ | x | $7.14 | = | $_____________ | ||||||
| (no. of shares) | (Subscription price) |
(amount to pay) |
| C. TOTAL AMOUNT ENCLOSED: |
$___________ (payable to Computershare, N.A.) (Total of Payments in 1.A and 1.B above) |
Please indicate any changes of address for deliveries and payments, if applicable:
|
Address |
If permanent change of address, check here: ☐ | |
|
City |
Daytime telephone number: | |
|
State |
Evening telephone number: | |
|
Zip
|
Email address: | |
I hereby irrevocably subscribe for the number of Class C Common Shares indicted as the total of Sections 1.A and 1.B above upon the terms and conditions specified in the Prospectus relating thereto and incorporated by reference herein, receipt of which is acknowledged. I hereby agree that if I fail to pay for the Class C Common Shares for which I have subscribed, the Company may exercise any remedies available to it under law.
If the aggregate Subscription Price paid by a Rightsholder is insufficient to purchase the number of Class C Common Shares that the holder indicates are being subscribed for, or if a Rightsholder does not specify the number of Class C Common Shares to be purchased, or if the aggregate Subscription Price paid by a Rightsholder exceeds the amount necessary to purchase the number of Class C Common Shares for which the Rightsholder has indicated an intention to subscribe, then the Rightsholder will be deemed to have exercised first its Basic Subscription Privilege and second its Oversubscription Privilege to purchase a number of Class C Common Shares equal to the maximum whole number of shares that could be purchased with the payment tendered.
MAKE CHECKS PAYABLE TO: Computershare N.A.
DELIVERY OF THIS FORM OF EXERCISE, SALE OR TRANSFER TO AN ADDRESS OTHER THAN AS SET FORTH ABOVE DOES NOT CONSTITUTE A VALID DELIVERY.
Full payment for shares subscribed for both the Basic Subscription Privilege (Section 1.A) and the Oversubscription Privilege (Section 1.B) must accompany this Rights Certificate or a notice of guaranteed delivery. Please reference your Rights Certificate Number (found on the front of this Rights Certificate) on your check or notice of guaranteed delivery. Funds must clear your account before the Expiration Time. Please note that personal checks may take approximately five business days to clear your account. You may, at your option, wire your funds to the Subscription Agent. Before sending your wire, please reference the wire instructions in the instructions accompanying this Rights Certificate in order to send your wire. Please contact the information agent for further information.
FOR RIGHTSHOLDERS REMITTING PAYMENT BY PERSONAL CHECK, ANY FAILURE WHATSOEVER, REGARDLESS OF THE CAUSE OR NATURE OF SUCH FAILURE, OF THE SUBSCRIPTION AGENT TO RECEIVE YOUR PAYMENT OF THE SUBSCRIPTION PRICE FREE AND CLEAR BY THE EXPIRATION TIME SHALL RESULT IN THE CANCELLATION OF YOUR EXERCISES OF RIGHTS, AND YOUR RIGHTS WILL EXPIRE NULL AND VOID WITHOUT PAYMENT OF ANY COMPENSATION THEREFOR.
2. ☐ Sell Your Rights: By checking the box for this section, you authorize the Subscription Agent to attempt to sell your unexercised Rights according to the procedures described in the Prospectus. If you choose to sell your Rights, your completed Rights Certificate (together with a properly completed and executed Internal Revenue Service Form W-8 or W-9, as applicable) must be received by the Subscription Agent by 5:00 P.M., New York City time, on September 18, 2020 (five business days prior to the Expiration Time, as may be adjusted in the event of an extension of the Expiration Time). Please see Paragraph 2 of the Instructions accompanying the Rights Certificate for timing considerations relating to the sale of rights.
Please indicate any changes of address for deliveries and payments, if applicable:
|
Address____________________________________
|
If permanent change of address, check here: ☐ | |
|
City_______________________________________
|
Daytime telephone number:____________________ | |
|
State______________________________________
|
Evening telephone number:____________________ | |
|
Zip_____________ __________________________
|
Email address:______________________________ | |
3. ☐ Transfer Your Rights: If you want some or all of your unexercised Rights transferred to a designated transferee, or to a bank or broker to sell for you, check the box for this section and complete the requested information below. Please see Paragraph 3 of the Instructions accompanying this Rights Certificate for timing considerations relating to the transfer of Rights.
For value received, of the Rights represented by this Form of Exercise, Sale or Transfer are assigned to:
| Print Full Name of Bank or Broker or Assignee and Assignee’s Social Security Number (or other applicable Taxpayer Identification Number) |
| Print Full Address of Bank or Broker or Assignee |
| Signature(s) of Assignor(s) |
4. ☐ New Certificate for Unexercised Rights: If you want a new Rights Certificate evidencing any unexercised Rights delivered to you or to someone else, please complete the requested information below. Please see the Instructions accompanying this Rights Certificate for timing considerations relating to requesting a new Rights Certificate.
| Print Rightsholder’s Full Name and Social Security Number (or other applicable Taxpayer Identification Number) |
| Address for delivery of certificate representing unexercised Rights (if any) |
5. Signature:
The signature(s) on this Form of Exercise, Sale or Transfer must correspond with the name(s) of the registered holder(s) exactly as it appears on the face of the Rights Certificate without any alteration or change whatsoever. In the case of joint registered holders, each person must sign this Form of Exercise, Sale or Transfer in accordance with the foregoing. If you sign this Form of Exercise, Sale or Transfer in your capacity as a trustee, executor, administrator, guardian, attorney-in-fact, agent, officer or a corporation or other fiduciary or representative, you must indicate the capacity in which you are signing when you sign and, if requested by the Subscription Agent in its sole and absolute discretion, you must present to the Subscription Agent satisfactory evidence of your authority to sign in that capacity.
If you wish to transfer your Rights, then your signature must be guaranteed by an Eligible Guarantor Institution, as that term is defined in Rule 17Ad-15 of the Securities Exchange Act of 1934, as amended, which may include: (a) a commercial bank or trust company; (b) a member firm of a domestic stock exchange; or (c) a savings bank or credit union.
| Signature (name of bank or firm) |
| Guaranteed by (signature/title) |
DELIVERY OF THIS FORM OF EXERCISE, SALE OR TRANSFER TO AN ADDRESS OTHER THAN AS SET FORTH ABOVE DOES NOT CONSTITUTE A VALID DELIVERY.
Exhibit 4.3
INSTRUCTIONS FOR USE OF LIBERTY LATIN AMERICA LTD.
CLASS C RIGHTS CERTIFICATES
CONSULT INNISFREE (THE “INFORMATION AGENT”) OR YOUR BANK OR BROKER AS TO ANY QUESTIONS
The following instructions relate to a rights offering (the “Rights Offering”) by Liberty Latin America Ltd., a Bermuda exempted company (the “Company”), to the holders of its Class A common shares, par value $0.01 per share (the “Class A Common Shares”), to the holders of its Class B common shares, par value $0.01 per share (the “Class B Common Shares”), and to the holders of its Class C common shares, par value $0.01 per share (the “Class C Common Shares”), as described in the Company’s prospectus dated September 10, 2020 (the “Prospectus”). In the rights distribution (as such term is defined in the Prospectus), holders of record of the Company’s Class A Common Shares, Class B Common Shares and Class C Common Shares (together, the “Common Shares”), at 5:00 p.m. New York City time, on September 8, 2020 (the “Record Date”) received 0.2690 of a transferable subscription right (a “Class C Right”) for each Class A Common Share, Class B Common Share and Class C Common Share held by them as of the Record Date. The total number of Class C Rights to be issued to each such holder was rounded up to the nearest whole number (after taking into account the aggregate number of Class C Rights each such holder would otherwise be entitled to receive in respect of the aggregate number of Common Shares held of record by such holder as a result of the Rights Offering). Such rounding was made with respect to each beneficial shareholder. Each whole Class C Right is exercisable, upon payment of $7.14 as described below (the “Subscription Price”), to purchase one Class C Common Share (the “Basic Subscription Privilege”). In addition, subject to the proration described below, each holder of record of Class C Rights (each a “Rightsholder”) that fully exercises its Basic Subscription Privilege with respect to all Class C Rights that it holds in the same capacity pursuant to a single rights certificate also has the right to subscribe at the Subscription Price for additional Class C Common Shares (the “Oversubscription Privilege”). If Class C Common Shares being offered in the Rights Offering remain available for subscription following the exercise of the Basic Subscription Privilege by Rightsholders prior to the Expiration Time, as defined below (the “Excess Shares”), such Rightsholders may exercise their Oversubscription Privilege to subscribe for a number of Excess Shares. If there are not a sufficient number of Excess Shares to satisfy all subscriptions pursuant to the exercise of Oversubscription Privileges by the applicable Rightsholders, the available Excess Shares will be allocated pro rata among Rightsholders exercising their Oversubscription Privilege in proportion to the number of Class C Common Shares that each such Rightsholder purchased pursuant to its Basic Subscription Privilege; provided, however, that if such pro rata allocation results in any Rightsholder being allocated a greater number of Excess Shares than such Rightsholder subscribed for pursuant to the exercise of such Rightsholder’s Oversubscription Privilege, then such Rightsholder will be allocated only such number of Excess Shares as such Rightsholder subscribed for, and the remaining Excess Shares will be allocated among the other Rightsholders exercising their Oversubscription Privilege with respect to the Class C Rights.
The Rights Offering will expire at 5:00 p.m., New York City time, on September 25, 2020, unless extended as described in the Prospectus (the “Expiration Time”).
AS DESCRIBED IN THESE INSTRUCTIONS, YOUR RIGHTS CERTIFICATE (ALONG WITH AN INTERNAL REVENUE SERVICE FORM W-8 OR W-9, AS APPLICABLE, TO THE EXTENT REQUIRED BY PARAGRAPH 2 OF THESE INSTRUCTIONS) MUST BE RECEIVED BY THE SUBSCRIPTION AGENT, OR GUARANTEED DELIVERY REQUIREMENTS WITH RESPECT TO YOUR RIGHTS CERTIFICATE MUST BE COMPLIED WITH, AND PAYMENT OF THE SUBSCRIPTION PRICE MUST BE RECEIVED, AS MORE SPECIFICALLY DESCRIBED BELOW AND IN THE PROSPECTUS, BY THE SUBSCRIPTION AGENT ON OR BEFORE THE EXPIRATION TIME. YOU MAY NOT REVOKE ANY EXERCISE OF A CLASS C RIGHT.
Below is a list of the key dates for the Rights Offering of which you should be aware. With the exception of the Record Date and Rights Distribution Date, such dates are subject to change in the event the Company’s board of directors (the “Board”), or a committee thereof, determines to extend the Rights Offering. For more information regarding these dates, we encourage you to review the section of the Prospectus entitled “The Rights Offering,” as this portion of the Prospectus describes other timing considerations of which you should be aware regarding the Rights Offering.
| Date |
Event / Action | |
| 5:00 p.m., New York City time, on September 8, 2020
|
Record Date.
| |
| September 10, 2020
|
Expected when-issued trading period for the Class C Rights on the Nasdaq Global Select Market under the symbol “LILRV.”
| |
| 5:00 p.m., New York City time, on September 10, 2020
|
Rights Distribution Date.
| |
| September 11, 2020
|
Commencement of the Rights Offering. Expected commencement of “regular way” trading for the Class C Rights on the Nasdaq Global Select Market under the symbol “LILAR.”
| |
| 5:00 p.m. New York City time, on September 18, 2020 (five business days prior to the Expiration Time, as may be adjusted in the event of an extension of the Expiration Time)
|
Date by which the Subscription Agent must have received appropriate materials from holders of Class C Rights in order to have the Subscription Agent sell such rights. Date by which registered foreign holders of Class C Rights must notify the Subscription Agent and establish to the satisfaction of the Subscription Agent that they are permitted to exercise their Class C Rights. Date by which the Subscription Agent must have received appropriate materials from holders of Class C Rights in order to transfer all or a portion of such rights.
| |
| 5:00 p.m., New York City time, on September 25, 2020 |
Expiration of the Rights Offering. | |
No fractional Class C Rights or cash in lieu thereof were issued or paid. Instead, the total number of Class C Rights issued to each shareholder was rounded up to the nearest whole number (after taking into account the aggregate number of Class C Rights each shareholder would otherwise have been entitled to receive in respect of all Common Shares held of record by such shareholder, in the aggregate as a result of the Rights Offering). Such rounding was made with respect to each beneficial shareholder. Nominee holders of Common Shares that held, on the Record Date, shares for the account(s) of more than one beneficial owner may, upon proper showing to the Subscription Agent, exercise such beneficial owners’ Basic Subscription Privilege and Oversubscription Privilege as described below.
The Class C Rights will be traded on the Nasdaq Global Select Market under the symbol “LILAR.”
The number of Class C Rights to which a holder of Class A Common Shares, Class B Common Shares and Class C Common Shares is entitled is printed on the face of that holder’s “Rights Certificate.” You should indicate your wishes with regard to the exercise, assignment, transfer or sale of your Class C Rights by completing the Rights Certificate and returning it to the Subscription Agent in the envelope provided.
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| 1. | EXERCISE YOUR RIGHTS AND SUBSCRIBE FOR CLASS C COMMON SHARES (Section 1 of the Rights Certificate). |
To exercise Class C Rights, deliver your properly completed and executed Rights Certificate, by checking the boxes next to Section 1.A and 1.B, if applicable, and completing Section 1.C, together with payment in full of the Subscription Price for each Class C Common Share subscribed for pursuant to the Basic Subscription Privilege and the Oversubscription Privilege, to the Subscription Agent.
Payment of the applicable Subscription Price must be made for the full number of Class C Common Shares being subscribed for by wire transfer or personal check drawn upon a U.S. bank payable to: Computershare N.A., as Subscription Agent.
THE SUBSCRIPTION PRICE WILL BE DEEMED TO HAVE BEEN RECEIVED BY THE SUBSCRIPTION AGENT ONLY UPON (I) THE CLEARANCE OF ANY PERSONAL CHECK, OR (II) THE RECEIPT BY THE SUBSCRIPTION AGENT OF ANY WIRE TRANSFER.
If paying by personal check, please note that the funds paid thereby may take approximately five business days to clear. Accordingly, Rightsholders who wish to pay the Subscription Price by means of a personal check are urged to make payment sufficiently in advance of the Expiration Time to ensure that such payment is received and clears by such date.
Notice of Guaranteed Delivery. Alternatively, you may cause a written guarantee substantially in the form enclosed herewith (the “Notice of Guaranteed Delivery”) from a commercial bank, trust company, securities broker or dealer, credit union, savings association or other eligible guarantor institution which is a member of or a participant in a signature guarantee program acceptable to the Subscription Agent (each of the foregoing being an “Eligible Institution”), to be received by the Subscription Agent at or prior to the Expiration Time, together with payment in full of the applicable Subscription Price. Such Notice of Guaranteed Delivery must state your name, the number of Class C Rights represented by your Rights Certificate, the number of Class C Rights being exercised pursuant to the Basic Subscription Privilege and the number of Class C Common Shares, if any, being subscribed for pursuant to the Oversubscription Privilege, and will guarantee the delivery to the Subscription Agent of your properly completed and executed Rights Certificate within two business days following the date of the Notice of Guaranteed Delivery. Delivery information for the Subscription Agent are listed below. If this procedure is followed, your Rights Certificate must be received by the Subscription Agent within two business days of the Notice of Guaranteed Delivery.
Additional copies of the Notice of Guaranteed Delivery may be obtained upon request from the Information Agent, Innisfree M&A Incorporated, at the address, or by calling the telephone number, indicated below.
Banks, brokers, trusts, depositaries or other nominee holders of the Class C Rights who exercise the Class C Rights on behalf of beneficial owners of Class C Rights will be required to certify to the Subscription Agent and the Company, in connection with any exercise of the Oversubscription Privilege, the aggregate number of Class C Rights that have been exercised and the number of Class C Common Shares that are being subscribed for pursuant to the Oversubscription Privilege by each beneficial owner of Class C Rights on whose behalf such nominee holder is acting. If more Class C Common Shares are subscribed for pursuant to the Oversubscription Privilege than are available for sale, such shares will be allocated, as described above, among Rightsholders exercising their Oversubscription Privilege in proportion to the number of Class C Common Shares purchased pursuant to each such Rightsholder’s Basic Subscription Privilege.
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The addresses of the Subscription Agent are as follows:
| If delivering by first class mail: | If delivering by registered, certified or express mail or overnight courier: | |
| Computershare N.A. | Computershare N.A. | |
| Liberty Latin America Rights Offering | Liberty Latin America Rights Offering | |
| P.O. Box 43011 | 150 Royall Street, Suite V | |
| Providence, RI 02940-3011 | Canton, MA 02021 | |
The telephone numbers of the Information Agent, for inquiries, information or requests for additional documentation are as follows:
Innisfree M&A Incorporated
Banks and Brokers Call: (212) 750-5833
All Others Call: (877) 750-8312
If you exercise less than all of the Class C Rights evidenced by your Rights Certificate you may either (a) check the box next to Section 2 and complete Section 2 of your Rights Certificate to direct the Subscription Agent to attempt to sell the unexercised Class C Rights (but no fractional Class C Rights) on your behalf (and provide an Internal Revenue Service Form W-8 or W-9, as described in Paragraph 2(a) below), (b) check the box next to Section 3 and complete Section 3 of your Rights Certificate to transfer your remaining unexercised Class C Rights (but no fractional Class C Rights) to a designated transferee or to assign them to a bank or broker to sell for you, or (c) check the box next to Section 4 and complete Section 4 of your Rights Certificate and the Subscription Agent will issue you a new Rights Certificate evidencing the unexercised Class C Rights (see Paragraph 4 of these “Instructions For Use of Liberty Latin America Ltd. Class C Rights Certificates”). If you choose to have any such new Rights Certificate delivered to a different address, so indicate in Section 4 of your Rights Certificate. If you choose to have a new Rights Certificate sent, you may not receive the new Rights Certificate in sufficient time to permit the exercise, assignment, transfer or sale of the Class C Rights evidenced thereby.
If you have not indicated the number of Class C Rights being exercised, or if you have not forwarded full payment of the Subscription Price for the number of Class C Rights that you have indicated are being exercised, you will be deemed to have exercised the Basic Subscription Privilege with respect to the maximum number of whole Class C Rights which may be exercised for the aggregate Subscription Price transmitted or delivered by you, and to the extent that the aggregate Subscription Price transmitted or delivered by you exceeds the product of the applicable per share Subscription Price multiplied by the number of whole Class C Rights evidenced by the Rights Certificate(s) transmitted or delivered by you and no direction is given as to the excess (such excess being the “Subscription Excess”), you will be deemed to have exercised your Oversubscription Privilege to purchase, to the extent available, that number of whole Class C Common Shares equal to the quotient obtained by dividing the Subscription Excess by the applicable per share Subscription Price, subject to the limit on the number of Class C Common Shares available to be purchased in the Rights Offering and applicable proration.
Conditions to Completion of the Rights Offering. There are no conditions to the completion of the Rights Offering. However, the Company has the right to terminate the Rights Offering for any reason before the Class C Rights expire.
Delivery of Class C Common Shares. As soon as practicable after the Expiration Time, the following deliveries and payments will be made to the address shown on the face of your Rights Certificate unless you provide instructions to the contrary in Section 1 of your Rights Certificate.
Subscription Privilege. The Subscription Agent will deliver to each validly exercising Rightsholder Class C Common Shares purchased pursuant to such exercise including the number of Class C Common Shares allocated to and purchased by such Rightsholder pursuant to its Oversubscription Privilege. The Subscription Agent will effect delivery of the subscribed-for Class C Common Shares through the Subscription Agent’s book-entry
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registration system by mailing to each subscribing Rightsholder a statement of holdings detailing such Rightsholder’s subscribed- for Class C Common Shares and the method by which the subscribing Rightsholder may access its account and, if desired, trade its shares. See “The Rights Offering—Subscription Privileges” in the Prospectus.
Return of Excess Payments. The Subscription Agent will promptly deliver to each Rightsholder who exercises the Oversubscription Privilege any excess funds tendered, without interest or deduction, in payment of the Subscription Price for each Class C Common Share that is subscribed for by, but not allocated to, such Rightsholder pursuant to the Oversubscription Privilege.
| 2. | SELL YOUR RIGHTS (Section 2 of the Rights Certificate). |
(a) Sale of All Unexercised Class C Rights Through the Subscription Agent. To sell all unexercised Class C Rights (but no fractional Class C Rights) through the Subscription Agent, you must so indicate by checking the box next to Section 2 and completing Section 2 of the Rights Certificate and you must provide a properly completed and executed Internal Revenue Service Form W-8 or W-9, as applicable, to the Subscription Agent along with your completed Rights Certificate. Internal Revenue Service Forms W-8 and W-9 and the applicable instructions are available on the Internal Revenue Service website at www.irs.gov. IF THE SUBSCRIPTION AGENT SELLS ANY OF YOUR CLASS C RIGHTS, SUCH CLASS C RIGHTS WILL BE DEEMED TO HAVE BEEN SOLD AT THE WEIGHTED AVERAGE NET SALE PRICE OF ALL CLASS C RIGHTS SOLD BY THE SUBSCRIPTION AGENT. Promptly following the Expiration Time, the Subscription Agent will send the selling Rightsholder a check for the net proceeds from the sale of any Class C Rights sold, reduced by any applicable tax withholding (including U.S. federal backup withholding). The aggregate fees charged by the Subscription Agent for selling Class C Rights will be deducted from the aggregate sale price for all such Class C Rights in determining the weighted average net sale price of all such Class C Rights. The Subscription Agent’s obligation to execute sell orders is subject to its ability to find buyers for the Class C Rights. NO ASSURANCE CAN BE GIVEN THAT A MARKET WILL DEVELOP OR BE MAINTAINED FOR THE CLASS C RIGHTS OR THAT THE SUBSCRIPTION AGENT WILL BE ABLE TO SELL ANY CLASS C RIGHTS.
| You must have your order to sell your Class C Rights to the Subscription Agent before 5:00 p.m., New York City time, on the fifth business day before the Expiration Time (which is September 18, 2020, unless the Expiration Time is extended). |
We encourage you to review the discussion in the Prospectus under the heading “The Rights Offering—Method of Transferring and Selling Class C Rights—Sales of Class C Rights Through the Subscription Agent.” Deliveries and payments will be made to the address shown on the face of your Rights Certificate unless you provide instructions to the contrary in Section 2 of your Rights Certificate.
Failure to provide a properly completed and executed Internal Revenue Service Form W-8 or W-9, as applicable, may result in the imposition of U.S. federal backup withholding (currently at a rate of 24%). See the discussion in the Prospectus under the heading “Certain U.S. Federal Income Tax Consequences—Information Reporting and Backup Withholding.”
(b) Sale of Less than All Unexercised Class C Rights Through the Subscription Agent. You may have your Rights Certificate divided into Rights Certificates of appropriate denominations by following the instructions in Paragraph 4 below. The Rights Certificate evidencing the number of unexercised Class C Rights you intend to sell can then be sold by following the instructions in Paragraph 2(a). IF THE SUBSCRIPTION AGENT SELLS ANY OF YOUR CLASS C RIGHTS, SUCH CLASS C RIGHTS WILL BE DEEMED TO HAVE BEEN SOLD AT THE WEIGHTED AVERAGE SALE PRICE OF ALL CLASS C RIGHTS SOLD BY THE SUBSCRIPTION AGENT. Promptly following the Expiration Time, the Subscription Agent will send the
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holder a check for the net proceeds from the sale of any Class C Rights sold, reduced by any applicable tax withholding (including U.S. federal backup withholding). The aggregate fees charged by the Subscription Agent for selling Class C Rights will be deducted from the aggregate sale price for all such Class C Rights in determining the weighted average net sale price of all such Class C Rights. The Subscription Agent’s obligation to execute sell orders is subject to its ability to find buyers for the Class C Rights. NO ASSURANCE CAN BE GIVEN THAT A MARKET WILL DEVELOP OR BE MAINTAINED FOR THE CLASS C RIGHTS OR THAT THE SUBSCRIPTION AGENT WILL BE ABLE TO SELL ANY CLASS C RIGHTS.
| You must have your order to sell your Class C Rights to the Subscription Agent before 5:00 p.m., New York City time, on the fifth business day before the Expiration Time (which is September 18, 2020, unless the Expiration Time is extended). |
We encourage you to review the discussion in the Prospectus under the heading “The Rights Offering—Method of Transferring and Selling Class C Rights—Sales of Class C Rights Through the Subscription Agent.” Deliveries and payments will be made to the address shown on the face of your Rights Certificate unless you provide instructions to the contrary in Section 2 of your Rights Certificate.
| 3. | TRANSFER OF ALL OR LESS THAN ALL UNEXERCISED CLASS C RIGHTS TO ONE OR MORE DESIGNATED TRANSFEREES (Section 3 of the Rights Certificate). |
(a) One Designated Transferee. To transfer all of your unexercised Class C Rights to a designated transferee or to a broker, dealer or nominee for sale on your behalf, you must so indicate by checking the box next to Section 3 and completing Section 3 of your Rights Certificate. A Rights Certificate that has been properly transferred in its entirety may be exercised by a new holder without having a new Rights Certificate issued. If you wish to transfer less than all of your unexercised Class C Rights (but no fractional Class C Rights) to one designated transferee or to a broker, dealer or nominee for sale on your behalf, so indicate by checking the box next to Section 3 and completing Section 3 of your Rights Certificate and separately instruct the Subscription Agent as to the action to be taken with respect to the unexercised Class C Rights not transferred. Such instructions should be guaranteed by an Eligible Institution. If no such instructions are received, the Subscription Agent will issue you a new Rights Certificate evidencing the unexercised Class C Rights. If the box next to Section 3 is checked but Section 3 is not completed, the Subscription Agent may thereafter treat the bearer of the Rights Certificate as the absolute owner of all of the Class C Rights evidenced by such Rights Certificate for all purposes, and neither the Subscription Agent nor the Company shall be affected by any notice to the contrary.
| If you wish to transfer any of your Class C Rights, you must have your order to transfer such Class C Rights to the Subscription Agent by the fifth business day prior to the Expiration Time (which is September 18, 2020, unless the Expiration Time is extended). |
(b) More than One Designated Transferee. Because only the Subscription Agent can issue Rights Certificates, if you wish to transfer all or less than all of the unexercised Class C Rights (but no fractional Class C Rights) evidenced by your Rights Certificate to more than one designated transferee or to more than one broker, dealer or nominee for sale on your behalf, so indicate by checking the box next to Section 3 and completing Section 3 and separately instruct the Subscription Agent as to the action to be taken with respect to any unexercised Class C Rights not transferred. Such instructions should be guaranteed by an Eligible Institution. Alternatively, you may first have your Rights Certificate divided into Rights Certificates of appropriate denominations by following the instructions in Paragraph 5 below. Each Rights Certificate evidencing the number of Class C Rights you intend to transfer can then be transferred by following the instructions in Paragraph 5(c).
| If you wish to transfer any of your Class C Rights, you must have your order to transfer such Class C Rights to the Subscription Agent by the fifth business day prior to the Expiration Time (which is September 18, 2020, unless the Expiration Time is extended). |
6
| 4. | TO HAVE A CLASS C RIGHTS CERTIFICATE DIVIDED INTO SMALLER DENOMINATIONS. |
Send your Rights Certificate, together with complete separate instructions (including specification of the denominations into which you wish your Class C Rights to be divided), signed by you, to the Subscription Agent, allowing a sufficient amount of time for new Rights Certificates to be issued and returned so that they can be used prior to the Expiration Time. Alternatively, you may assign your unexercised Class C Rights to a bank or broker to effect such actions on your behalf. Your signature must be guaranteed by an Eligible Institution if any of the new Rights Certificates are to be issued in a name other than that in which the old Rights Certificate was issued. Class C Rights Certificates may not be divided into fractional Class C Rights, and any instruction to do so will be rejected. As a result of delays in the mail, the time of the transmittal, the necessary processing time and other factors, you or your transferee may not receive such new Rights Certificate(s) in time to enable the Rightsholder to complete a sale, exercise or transfer by the Expiration Time. Neither the Company nor the Subscription Agent will be liable to either a transferor or transferee for any such delays.
If you choose to have a new Rights Certificate sent, you may not receive the new Rights Certificate in sufficient time to permit the exercise, assignment, transfer or sale of the Class C Rights evidenced thereby.
| 5. | EXECUTION. |
(a) Execution by Registered Holder(s). The signature on the Rights Certificate must correspond with the name of the registered holder exactly as it appears on the face of the Rights Certificate without any alteration or change whatsoever. If the Rights Certificate is registered in the names of two or more joint owners, all of such owners must sign. Persons who sign the Rights Certificate in a representative or other fiduciary capacity must indicate their capacity when signing and, unless waived by the Company in its sole and absolute discretion, must present to the Subscription Agent satisfactory evidence of their authority to so act.
(b) Execution by Person Other than Registered Holder. If the Rights Certificate is executed by a person other than the holder named on the face of the Rights Certificate, proper evidence of authority of the person executing the Rights Certificate must accompany the same unless, for good cause, the Company dispenses with proof of authority, in its sole and absolute discretion.
(c) Signature Guarantees. Your signature must be guaranteed by an Eligible Institution if you wish to transfer all or less than all of your unexercised Class C Rights to a designated transferee or to a broker, dealer or nominee for sale on your behalf as specified in Paragraphs 4(c) and/or 4(d), or to have the Subscription Agent sell less than all of your unexercised Class C Rights, as specified in Paragraph 4(b).
| 6. | METHOD OF DELIVERY. |
The method of delivery of Rights Certificates and payment of the Subscription Price to the Subscription Agent will be at the election and risk of the Rightsholder, but, if sent by mail, it is recommended that they be sent by registered mail, properly insured, with return receipt requested, and that a sufficient number of days be allowed to ensure delivery to the Subscription Agent and the clearance of any checks sent in payment of the Subscription Price prior to the Expiration Time. If paying by personal check, please note that the funds paid thereby may take approximately five business days to clear. Accordingly, Rightsholders who wish to pay the Subscription Price by means of a personal check are urged to make payment sufficiently in advance of the Expiration Time to ensure that such payment is received and clears by such date. Rightsholders who wish to pay the Subscription Price by means of wire transfer will need to follow these instructions:
If sending payment of subscription price by wire of immediately available funds:
Bank of America
ABA Number 026009593
7
DDA 4426226480
Account Name CINC AAF Rights Offering A
SWIFT BOFAUS3N
Reference Line LILA Rights Offering and your 11-digit Computershare Account Number
If you do not include your 11-digit Computershare Account Number in the reference line of your wire we will not be able to match your wire to your Rights Exercise and your Rights Exercise would not be accepted into this offer.
| 7. | SPECIAL PROVISIONS RELATING TO THE DELIVERY OF CLASS C RIGHTS THROUGH THE DEPOSITORY TRUST COMPANY. |
If you are a broker, a dealer, a trustee or a depositary for securities who holds Class A Common Shares, Class B Common Shares or Class C Common Shares for the account of others as a nominee holder, you may, upon proper showing to the Subscription Agent, exercise your beneficial owners’ Basic Subscription Privilege and Oversubscription Privilege through The Depository Trust Company (“DTC”). You may exercise Class C Rights held through DTC through DTC’s PSOP Function on the “agents subscription over PTS” procedures and instructing DTC to charge the applicable DTC account for the Subscription Price and to deliver such amount to the Subscription Agent. DTC must receive the subscription instructions and payment for the new shares by the Expiration Time unless guaranteed delivery procedures are utilized.
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Exhibit 5.1
|
CONYERS DILL & PEARMAN LIMITED
Clarendon House, 2 Church Street Hamilton HM 11, Bermuda
Mail: PO Box HM 666, Hamilton HM CX, Bermuda T +1 441 295 1422
conyers.com | |||||||
10 September 2020
Matter No.: 366682
+1 441 278 7957
karoline.tauschke@conyers.com
Liberty Latin America Ltd.
2 Church Street
Hamilton HM 11
Bermuda
Dear Sirs,
| Re: | Liberty Latin America Ltd. (the “Company”) |
We have acted as special Bermuda legal counsel to the Company in connection with a registration statement on form S-3 filed with the U.S. Securities and Exchange Commission (the “Commission”) on 10 September 2020 (the “Registration Statement”, which term does not include any other document or agreement whether or not specifically referred to therein or attached as an exhibit or schedule thereto) relating to the registration under the U.S. Securities Act of 1933, as amended, (the “Securities Act”) of (i) subscription rights (the “Rights”) for an aggregate of 49,089,607 of the Company’s Class C Common Shares, par value $0.01 per share (the “New Class C Common Shares”) and (ii) the New Class C Common Shares.
For the purposes of giving this opinion, we have examined a copy of the Registration Statement. We have also reviewed the memorandum of association and the bye laws of the Company, certified by the Assistant Secretary of the Company on 9 September 2020 (collectively, the “Constitutional Documents”) and unanimous written resolutions of the Company’s board of directors dated 5 August 2020 (the “Resolutions”), and such other documents and made such enquiries as to questions of law as we have deemed necessary in order to render the opinion set forth below.
We have assumed (a) the genuineness and authenticity of all signatures and the conformity to the originals of all copies (whether or not certified) examined by us and the authenticity and completeness of the originals from which such copies were taken, (b) that where a document has been examined by us in draft form, it will be or has been executed and/or filed in the form of that draft, and where a number of drafts of a document have been examined by us all changes thereto have been marked or otherwise drawn to our attention, (c) the accuracy and completeness of all factual representations made in the Registration Statement and other documents reviewed by us, (d) that the Resolutions were passed at one or more duly convened, constituted and quorate meetings, or by unanimous written resolutions, remain in full force and effect and have not been rescinded or amended, (e) that there is no provision of the law of any jurisdiction, other than Bermuda, which would have any implication in relation to the opinions expressed herein, (f) that upon issue of any New Class C Common Shares following exercise of the Rights, the Company will receive consideration for the full issue price thereof which shall be equal to at least the par value thereof (g) that the Company will have sufficient authorised capital to effect the issue of any of the New Class C Common Shares at the time of exercise of the Rights and (h) the consent to the issue and free transfer of the Company’s securities given by the Bermuda Monetary Authority as of 22 December 2017 will not have been revoked or amended at the time that any Rights are exercised.
“Non-assessability” is not a legal concept under Bermuda law, but when we describe the New Class C Common Shares herein as being “non-assessable” we mean, subject to any contrary provision in any agreement between the Company and any one of its members holding any of the New Class C Common Shares (but only with respect to such member), that no further sums are payable with respect to the issue of such shares and no member shall be bound by an alteration in the Constitutional Documents after the date upon which it became a member if and so far as the alteration requires such member to take or subscribe for additional New Class C Common Shares or in any way increases its liability to contribute to the share capital of, or otherwise pay money to, the Company.
We have made no investigation of and express no opinion in relation to the laws of any jurisdiction other than Bermuda. This opinion is to be governed by and construed in accordance with the laws of Bermuda and is limited to and is given on the basis of the current law and practice in Bermuda. This opinion is issued solely for the purposes of the filing of the Registration Statement and the offering of the Rights and the New Class C Common Shares by the Company and is not to be relied upon in respect of any other matter.
On the basis of and subject to the foregoing, we are of the opinion that:
| 1. | The Company is duly incorporated and existing under the laws of Bermuda in good standing (meaning solely that it has not failed to make any filing with any Bermuda government authority under the Companies Act 1981, or to pay any Bermuda government fees or tax which would make it liable to be struck off the Register of Companies and thereby cease to exist under the laws of Bermuda). |
| 2. | The Rights have been duly authorised and validly issued. |
| 3. | When issued upon due exercise of the Rights in accordance with the terms of the Registration Statement, the New Class C Common Shares will be validly issued, fully paid and non-assessable. |
conyers.com | 2
We hereby consent to the filing of this opinion as an exhibit to the Registration Statement and to the references to our firm under the caption “Legal Matters” in the prospectus forming a part of the Registration Statement. In giving this consent, we do not hereby admit that we are experts within the meaning of Section 11 of the Securities Act or that we are within the category of persons whose consent is required under Section 7 of the Securities Act or the Rules and Regulations of the Commission promulgated thereunder.
Yours faithfully,
/s/ Conyers Dill & Pearman
Conyers Dill & Pearman Limited
conyers.com | 3
Exhibit 23.1
Consent of Independent Registered Public Accounting Firm
The Board of Directors Liberty Latin America Ltd.:
We consent to the use of our reports dated February 19, 2020, with respect to the consolidated balance sheets of Liberty Latin America Ltd. and subsidiaries (the Company) as of December 31, 2019 and 2018, the related consolidated statements of operations, comprehensive loss, equity, and cash flows for each of the years in the three-year period ended December 31, 2019, and the related notes and financial statement schedules I and II, and the effectiveness of internal control over financial reporting as of December 31, 2019 incorporated by reference herein and to the reference to our firm under the heading “Experts” in the prospectus.
Our report dated February 19, 2019, on the effectiveness of internal control over financial reporting as of December 31, 2019, expresses our opinion that Liberty Latin America Ltd. did not maintain effective internal control over financial reporting as of December 31, 2019 because of the effect of material weaknesses on the achievement of the objectives of the control criteria and contains an explanatory paragraph that states a material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the company’s annual or interim financial statements will not be prevented or detected on a timely basis. The following material weaknesses have been identified and included in management’s assessment:
| • | The Company did not have a sufficient number of trained resources with the appropriate skills and knowledge with assigned responsibilities and accountability for the design and operation of internal controls over financial reporting. |
| • | The Company did not have an effective risk assessment process that successfully identified and assessed risks of misstatement to ensure controls were designed and implemented to respond to those risks. The Company did not adequately communicate the changes necessary in financial reporting and related internal controls throughout its organization and to affected third parties. |
| • | The Company did not have an effective monitoring process to assess the consistent operation of internal control over financial reporting and to remediate known control deficiencies. |
| • | The Company did not have an effective information and communication process to identify, capture and process relevant information necessary for financial accounting and reporting. |
| • | The Company did not i) establish effective general information technology controls (GITCs), specifically program change controls and access controls, commensurate with financial and IT personnel job responsibilities that support the consistent operation of the Company’s IT operating systems, databases and IT applications, and end user computing over all financial reporting, ii) have policies and procedures through which general information technology controls are deployed across the organization. Automated process-level controls and manual controls dependent upon the accuracy and completeness of information derived from information technology systems were also rendered ineffective because they are affected by the lack of GITCs. |
| • | The Company did not have effective control activities related to the design, implementation and operation of process-level control activities related to order-to-cash (including revenue, trade receivables, and deferred revenue), procure-to-pay (including operating expenses, prepaid expenses, accounts payable, and accrued liabilities), hire-to-pay (including compensation expense and accrued liabilities), long-lived assets, inventory, and other financial reporting processes. |
The material weaknesses were considered in determining the nature, timing, and extent of audit tests applied in our audit of the 2019 consolidated financial statements, and this report does not affect our report on those consolidated statements.
The report covering the December 31, 2019 consolidated financial statements refers to changes in the method of accounting for leases as of January 1, 2019 due to the adoption of Accounting Standards Update No. 2016-02, Leases, and accounting for revenue from contracts with customers as of January 1, 2018 due to the adoption of Accounting Standards Update No. 2014-09, Revenue from Contracts with Customers.
/s/ KPMG LLP
Denver, Colorado
September 10, 2020
Exhibit 99.1
LIBERTY LATIN AMERICA LTD.
FORM OF NOTICE OF GUARANTEED DELIVERY
RELATING TO CLASS C COMMON SHARES SUBSCRIBED FOR PURSUANT
TO THE BASIC SUBSCRIPTION AND OVER-SUBSCRIPTION PRIVILEGE
As set forth in Liberty Latin America Ltd.’s (the “Company”) prospectus, dated September 10, 2020, which forms a part of the Company’s Registration Statement on Form S-3, under “The Rights Offering—Delivery of Subscription Materials and Payment,” this form (or one substantially equivalent hereto) may be used as a means of effecting the subscription and payment for Class C common shares, par value $0.01 per share, of the Company subscribed for pursuant to the basic subscription privilege and the oversubscription privilege. Such form may be delivered or sent by overnight delivery or first class mail to the Subscription Agent and must be received prior to 5:00 p.m., New York City time, on September 25, 2020, unless extended by the Company in its sole discretion (as it may be extended, the “Expiration Time”).
The Subscription Agent is:
COMPUTERSHARE N.A.
Attention: Liberty Latin America Ltd. Rights Offering
| By First Class Mail Only | By Registered, Certified or Express Mail, | |
| (No Overnight/Express Mail): | or Overnight Courier: | |
| Computershare | Computershare | |
| Attn: Voluntary Corporate Actions | Attn: Voluntary Corporate Actions | |
| P.O. Box 43011 Providence, RI 02940-3011 |
150 Royall Street, Suite V Canton, MA 02021 |
If delivering by email: canoticeofguarantee@computershare.com
This email address can ONLY be used for delivery of this Notice of Guaranteed Delivery.
DELIVERY OF THIS INSTRUMENT TO AN ADDRESS OTHER THAN AS SET FORTH ABOVE DOES NOT CONSTITUTE A VALID DELIVERY.
The Eligible Guarantor Institution (as that term is defined in Rule 17Ad-15 of the Securities Exchange Act of 1934, as amended), which may include (i) a commercial bank or trust company, (ii) a member firm of a domestic stock exchange or (iii) a savings bank or credit union, that completes this form must communicate the guarantee and the number of Class C common shares of the Company subscribed for pursuant to both the basic subscription privilege and the oversubscription privilege to the Subscription Agent and the Subscription Agent must receive this Notice of Guaranteed Delivery and full payment for all Class C common shares subscribed for pursuant to the basic subscription privilege and the oversubscription privilege at or prior to the Expiration Time, guaranteeing delivery to the Subscription Agent of a properly completed and duly executed Class C Rights Certificate. The Class C Rights Certificate must be received by the Subscription Agent at or prior to 5:00 p.m., New York City time, on the second business day after the date this Notice of Guaranteed Delivery is delivered to the Subscription Agent. Failure to timely and properly deliver this Notice of Guaranteed Delivery or to make the delivery guaranteed herein will result in a forfeiture of the rights.
This Notice of Guaranteed Delivery shall not be used to guarantee signatures. If a signature on the Class C Rights Certificate is required to be guaranteed by an Eligible Guarantor Institution (as that term is defined in Rule 17Ad-15 of the Securities Exchange Act of 1934, as amended) under the instructions to the Class C Rights Certificate, the signature guarantee must appear in the applicable space provided in the signature box on the Class C Rights Certificate.
1
GUARANTEE
The undersigned, an Eligible Guarantor Institution (as that term is defined in Rule 17Ad-15 of the Securities Exchange Act of 1934, as amended) guarantees delivery to the Subscription Agent at or prior to 5:00 p.m., New York City time, on the second business day after the date this Notice of Guaranteed Delivery is delivered to the Subscription Agent of a properly completed and duly executed Class C Rights Certificate. Participants should notify the Depositary prior to covering through the submission of a physical security directly to the Depositary based on a guaranteed delivery that was submitted via The Depositary Trust Company’s PTOP platform.
Broker Assigned Control #
LIBERTY LATIN AMERICA LTD.
| 1. |
Basic Subscription | Number of Class C Rights exercised: | rights | |||||
| Number of Class C common shares subscribed for pursuant to the basic subscription privilege for which you are guaranteeing delivery of the Class C Rights Certificate and full payment: | shares | |||||||
| Total payment to be made or previously made in connection with basic subscription: |
$ (Shares × $7.14, the subscription price) |
|||||||
| 2. |
Oversubscription Privilege | Number of Class C common shares subscribed for pursuant to the oversubscription privilege for which you are guaranteeing delivery of the Class C Rights Certificate and full payment: | shares | |||||
| Total payment to be made or previously made in connection with over-subscription privilege: |
$ (Shares × $7.14, the subscription price) |
|||||||
| 3. |
Totals | Total number of Class C Rights exercised: | rights | |||||
| Total number of Class C common shares subscribed for pursuant to the basic subscription privilege and oversubscription privilege for which you are guaranteeing delivery on the Class C Rights Certificate: | shares | |||||||
| Total payment to be made or previously made: | $ | |||||||
| 4. |
Method of Delivery | |||||||
| (Check one) |
||||||||
| ☐ |
Through the Depository Trust Company (“DTC”) | |||||||
| ☐ |
Direct to Computershare N.A., as the Subscription Agent. | |||||||
2
Please assign above a unique control number for each guarantee submitted. This number needs to be referenced on any direct delivery or any delivery through DTC.
| Name of Firm |
||
| Authorized Signature |
||
| Name (Please print or type) |
||
| Title: |
||
| DTC Participant Number |
||
| Contact Name |
||
| Address |
||
| City State Zip Code |
||
| Phone Number |
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| Date |
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3
Exhibit 99.2
LIBERTY LATIN AMERICA LTD.
FORM OF NOTICE TO SHAREHOLDERS WHO ARE ACTING AS NOMINEES
Up to 49,019,607 Class C Common Shares
Issuable Upon Exercise of Transferable Rights*
This letter is being distributed to broker-dealers, trust companies, banks and other nominees in connection with the offering (the “Rights Offering”) by Liberty Latin America Ltd. (the “Company”) of transferable rights to subscribe for the Company’s Class C common shares, par value $0.01 per share (“Class C Common Shares”), by holders of record of the Company’s Class A common shares, par value $0.01 per share (“Class A Common Shares”), Class B common shares, par value $0.01 per share (“Class B Common Shares”) and Class C Common Shares (collectively, the “Record Date Shareholders”) as of 5:00 p.m., New York City time, on September 8, 2020 (the “Record Date”).
Pursuant to the Rights Offering, the Company is issuing rights (the “Class C Rights”) to subscribe for up to 49,019,607 of its Class C Common Shares, on the terms and subject to the conditions described in the Company’s prospectus, dated September 10, 2020 (the “Prospectus”) (plus additional Class C Common Shares which may be issued as a result of rounding fractional Class C Rights up to the nearest whole right as described in the Prospectus). The Class C Rights may be exercised by holders thereof (the “Rights Holders”) at any time during the subscription period, which commences on September 11, 2020. The Rights Offering will expire at 5:00 p.m., New York City time, on September 25, 2020, unless extended by the Company in its sole discretion (as it may be extended, the “Expiration Date”). The Class C Rights are transferable and will be listed for trading on The Nasdaq Global Select Market under the symbol “LILAR” until the Expiration Date.
As described in the Prospectus, Record Date Shareholders will receive 0.2690 of a Class C Right for each Class A Common Share, Class B Common Share or Class C Common Share held by such holder as of the Record Date. The total number of Class C Rights to be issued to each Record Date Shareholder was rounded up to the nearest whole number (after taking into account the aggregate number of Class C Rights each Record Date Shareholder would otherwise be entitled to receive in respect of the aggregate number of Class A Common Shares, Class B Common Shares and Class C Common Shares held of record by such Record Date Shareholder as a result of the Rights Offering). Such rounding was made with respect to each beneficial Shareholder. Each whole Class C Right entitles a Rights Holder to purchase one new Class C Common Share, which is referred to as the “Basic Subscription.” The subscription price per share of $7.14, which is equal to an approximate 25% discount to the volume weighted average trading price of the Class C Common Shares over the three trading day period beginning on August 31, 2020 and ending on (and including) September 2, 2020.
If any Class C Common Shares available for purchase in the Rights Offering are not subscribed for by Rights Holders pursuant to the Basic Subscription (the “Remaining Shares”), a Rights Holder that has exercised fully its Class C Rights pursuant to the Basic Subscription may subscribe for any Remaining Shares that are not otherwise subscribed for by Rights Holders, on the terms and subject to the conditions set forth in the Prospectus, including as to proration. We refer to these over-subscription privileges as the “Oversubscription Privilege.”
The Class C Rights are evidenced by a subscription certificate registered in your name or the name of your nominee. Each beneficial owner of the Company’s common shares registered in your name or the name of your nominee on the Record Date is entitled to 0.2690 of a Class C Right for every Class A Common Share, Class B Common Share and Class C Common Share held as of the Record Date.
| (*) | Plus additional Class C Common Shares which may be issued as a result of rounding fractional Class C Rights up to the nearest whole right as described in the Prospectus. |
1
We are asking persons who held Class A Common Shares, Class B Common Shares or Class C Common Shares beneficially, and who received the Class C Rights distributable with respect to those shares through a broker-dealer, trust company, bank or other nominee, to contact the appropriate institution or nominee and request it to effect the transactions for them.
If you exercise the Oversubscription Privilege on behalf of beneficial owners of Class C Rights, you will be required to certify to the Subscription Agent and the Company, in connection with the exercise of the Oversubscription Privilege, as to the number of Class A Common Shares, Class B Common Shares and Class C Common Shares held on behalf of each beneficial owner as of the Record Date, the aggregate number of Class C Rights that have been exercised pursuant to the Basic Subscription, whether the Class C Rights exercised pursuant to the Basic Subscription on behalf of each beneficial owner for which you are acting have been exercised in full and the number of Class C Common Shares being subscribed for pursuant to the Oversubscription Privilege by each beneficial owner of Class C Rights on whose behalf you are acting.
Enclosed are copies of the following documents:
| 1. | Prospectus, dated September 10, 2020; |
| 2. | A form of letter which may be sent to beneficial holders of the Class C Rights; and |
| 3. | A Notice of Guaranteed Delivery. |
You will have no right to rescind a subscription after receipt of the payment of the Subscription Price, except as described in the Prospectus. Class C Rights not exercised at or prior to the Expiration Time will expire.
Additional copies of the enclosed materials may be obtained from the Information Agent, Innisfree M&A Incorporated, toll-free at the following telephone number: 877-750-8312.
NOTHING HEREIN OR IN THE ENCLOSED DOCUMENTS SHALL MAKE YOU OR ANY OTHER PERSON AN AGENT OF THE COMPANY, THE DEALER-MANAGER, THE SUBSCRIPTION AGENT, THE INFORMATION AGENT OR ANY OTHER PERSON MAKING OR DEEMED TO BE MAKING OFFERS OF THE SECURITIES ISSUABLE UPON VALID EXERCISE OF THE CLASS C RIGHTS, OR AUTHORIZE YOU OR ANY OTHER PERSON TO MAKE ANY STATEMENTS ON BEHALF OF ANY OF THEM WITH RESPECT TO THE RIGHTS OFFERING, EXCEPT FOR STATEMENTS MADE IN THE PROSPECTUS.
2
Exhibit 99.3
LIBERTY LATIN AMERICA LTD.
FORM OF NOTICE TO CLIENTS OF RIGHTS HOLDERS WHO ARE ACTING AS NOMINEES
Up to 49,019,607 Class C Common Shares
Issuable Upon Exercise of Transferable Rights*
Enclosed for your consideration is a prospectus, dated September 10, 2020 (the “Prospectus”), relating to the offering (the “Rights Offering”) by Liberty Latin America Ltd. (the “Company”) of transferable rights to subscribe for the Company’s Class C common shares, par value $0.01 per share (“Class C Common Shares”), by holders of record of the Company’s Class A common shares, par value $0.01 per share (“Class A Common Shares”), Class B common shares, par value $0.01 per share (“Class B Common Shares”), and Class C Common Shares (collectively, the “Record Date Shareholders”) as of 5:00 p.m., New York City time, on September 8, 2020 (the “Record Date”).
Pursuant to the Rights Offering, the Company has issued rights (the “Class C Rights”) to subscribe for up to 49,019,607 Class C Common Shares, on the terms and subject to the conditions described in the Prospectus (plus additional Class C Common Shares which may be issued as a result of rounding fractional Class C Rights up to the nearest whole right as described in the Prospectus). The Class C Rights may be exercised by the holders thereof (the “Rights Holders”) at any time during the subscription period, which commences on September 11, 2020. The Rights Offering will expire at 5:00 p.m., New York City time, on September 25, 2020, unless extended by the Company in its sole discretion (as it may be extended, the “Expiration Time”). The Class C Rights are transferable and will be listed for trading on The Nasdaq Global Select Market under the symbol “LILAR” until the Expiration Time.
As described in the Prospectus, Record Date Shareholders received 0.2690 of a Class C Right for each Class A Common Share, Class B Common Share or Class C Common Share held by such holder on the Record Date. The total number of Class C Rights to be issued to each Record Date Shareholder was rounded up to the nearest whole number (after taking into account the aggregate number of Class C Rights each Record Date Shareholder would otherwise be entitled to receive in respect of the aggregate number of Liberty Latin America Ltd. common shares held of record by such Record Date Shareholder as a result of the Rights Offering). Such rounding was made with respect to each beneficial shareholder. Each whole Class C Right entitles the holder (the “Rights Holder”) to purchase one Class C Common Share, which is referred to as the “Basic Subscription.” The subscription price per share of $7.14 (the “Subscription Price”) is equal to an approximate 25% discount to the volume weighted average trading price of the Class C Common Shares over the three trading day period beginning on August 31, 2020 and ending on (and including) September 3, 2020.
If any Class C Common Shares available for purchase in the Rights Offering are not subscribed for by Rights Holders pursuant to the Basic Subscription (the “Remaining Shares”), a Rights Holder that has exercised fully its Class C Rights pursuant to the Basic Subscription may subscribe for any Remaining Shares that are not otherwise subscribed for by Rights Holders, on the terms and subject to the conditions set forth in the Prospectus, including as to proration.
The Class C Rights will be evidenced by subscription certificates.
Enclosed are copies of the following documents:
| 1. | Prospectus, dated September 10, 2020; and |
| 2. | Beneficial Owner Election Form. |
| (*) | Plus additional Class C Common Shares which may be issued as a result of rounding fractional Class C Rights up to the nearest whole right as described in the Prospectus. |
1
THE MATERIALS ENCLOSED ARE BEING FORWARDED TO YOU AS THE BENEFICIAL OWNER OF CLASS C RIGHTS CARRIED BY US IN YOUR ACCOUNT BUT NOT REGISTERED IN YOUR NAME. EXERCISES OF CLASS C RIGHTS MAY ONLY BE MADE BY US AS THE RECORD OWNER AND PURSUANT TO YOUR INSTRUCTIONS.
Accordingly, we request instructions as to whether you wish us to elect to subscribe for any Class C Common Shares to which you are entitled pursuant to the terms and subject to the conditions set forth in the enclosed Prospectus. However, we urge you to read the Prospectus carefully before instructing us to exercise any Class C Rights.
Your instructions to us should be forwarded as promptly as possible in order to permit us to exercise the Class C Rights on your behalf in accordance with the provisions of the Rights Offering. The Rights Offering will expire at the Expiration Time. You will have no right to rescind your subscription after receipt of your payment of the Subscription Price or Notice of Guaranteed Delivery, except as described in the Prospectus. Class C Rights not exercised at or prior to the Expiration Time will expire.
If you wish to have us, on your behalf, exercise your Class C Rights for any Class C Common Shares to which you are entitled, please so instruct us by completing, executing and returning to us the Beneficial Owner Election Form included with this letter.
ANY QUESTIONS OR REQUESTS FOR ASSISTANCE CONCERNING THE RIGHTS OFFERING SHOULD BE DIRECTED TO INNISFREE M&A INCORPORATED, THE INFORMATION AGENT, TOLL-FREE AT THE FOLLOWING TELEPHONE NUMBER: 877-750-8312.
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Exhibit 99.4
LIBERTY LATIN AMERICA LTD.
FORM OF NOTICE TO RIGHTS HOLDERS WHO ARE RECORD HOLDERS
Up to 49,019,607 Class C Common Shares
Issuable Upon Exercise of Transferable Rights*
Enclosed for your consideration is a prospectus, dated September 10, 2020 (the “Prospectus”), relating to the offering (the “Rights Offering”) by Liberty Latin America Ltd. (the “Company”) of transferable rights (the “Class C Rights”) to subscribe for the Company’s Class C common shares, par value $0.01 per share (“Class C Common Shares”), by holders of record of the Company’s Class A common shares, par value $0.01 per share (“Class A Common Shares”), Class B common shares, par value $0.01 per share (“Class B Common Shares”), and Class C Common Shares (“Record Date Shareholders”) as of 5:00 p.m., New York City time, on September 8, 2020 (the “Record Date”).
Pursuant to the Rights Offering, the Company is issuing Class C Rights to subscribe for up to 49,019,607 of the Company’s Class C Common Shares, on the terms and subject to the conditions described in the Prospectus (plus additional Class C Common Shares which may be issued as a result of rounding fractional Class C Rights up to the nearest whole right, as described in the Prospectus). The Class C Rights may be exercised at any time during the subscription period, which commences on September 11, 2020. The Rights Offering will expire at 5:00 p.m., New York City time, on September 25, 2020, unless extended by the Company in its sole discretion (as it may be extended, the “Expiration Time”). The Class C Rights are transferable and will be listed for trading on The Nasdaq Global Select Market under the symbol “LILAR” until the Expiration Time.
As described in the Prospectus, Record Date Shareholders received 0.2690 of a Class C Right for each Class A Common Share, Class B Common Share or Class C Common Share held by such holder as of the Record Date. Each whole Class C Right entitles a holder (the “Rights Holder”) to purchase one new Class C Common Share, which is referred to as the “Basic Subscription.” The total number of Class C Rights to be issued to each Record Date Shareholder was rounded up to the nearest whole number (after taking into account the aggregate number of Class C Rights each Record Date Shareholder would otherwise be entitled to receive in respect of the aggregate number of the Company’s common shares held of record by such Record Date Shareholder as a result of the Rights Offering). Such rounding was made with respect to each beneficial Shareholder. The subscription price per share is $7.14 (the “Subscription Price”), which is equal to an approximate 25% discount to the volume weighted average trading price of the Class C Common Shares over the three trading day period beginning on August 31, 2020 and ending on (and including) September 2, 2020.
If any Class C Common Shares available for purchase in the Rights Offering are not subscribed for by Rights Holders pursuant to the Basic Subscription (the “Remaining Shares”), a Rights Holder that has exercised fully its Class C Rights pursuant to the Basic Subscription may subscribe for any Remaining Shares that are not otherwise subscribed for by Rights Holders, on the terms and subject to the conditions set forth in the Prospectus, including as to proration. We refer to these over-subscription privileges as the “Oversubscription Privilege.”
The Class C Rights will be evidenced by subscription certificates (the “Rights Certificates”).
Enclosed are copies of the following documents:
| 1. | Prospectus, dated September 10, 2020; |
| 2. | Rights Certificate and Instructions for Use; and |
| 3. | Notice of Guaranteed Delivery |
| (*) | Plus additional Class C Common Shares which may be issued as a result of rounding fractional Class C Rights up to the nearest whole right as described in the Prospectus. |
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Your prompt attention is requested. To exercise Class C Rights, you should complete and sign the Rights Certificate and forward it, with payment of the Subscription Price in full for each Class C Common Share subscribed for pursuant to the Basic Subscription and the Oversubscription Privilege to Computershare N.A. (the “Subscription Agent”), as indicated on the Rights Certificate. The Subscription Agent must receive the properly completed and duly executed Rights Certificate and full payment at or prior to the Expiration Time. You are responsible for the method of delivery of Rights Certificates, any necessary accompanying documents and payment of the Subscription Price to the Subscription Agent. If you send the Rights Certificates and other items by mail, we recommend that you send them by registered mail, properly insured, with return receipt requested. There may be unexpected delays in mail processing times as a result of the coronavirus (COVID-19) pandemic. You should allow a sufficient number of days to ensure delivery to the Subscription Agent and clearance of any payment by personal check prior to the Expiration Time.
You will have no right to rescind your subscription following the Subscription Agent’s receipt of your payment of the Subscription Price, except as described in the Prospectus. Class C Rights not exercised at or prior to the Expiration Time will expire.
ANY QUESTIONS OR REQUESTS FOR ASSISTANCE CONCERNING THE RIGHTS OFFERING SHOULD BE DIRECTED TO INNISFREE M&A INCORPORATED, THE INFORMATION AGENT, TOLL-FREE AT THE FOLLOWING TELEPHONE NUMBER: 877-750-8312.
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Exhibit 99.5
FORM OF BENEFICIAL OWNER ELECTION FORM
I (we) acknowledge receipt of your letter and the enclosed materials relating to the offering of rights (the “Class C Rights”) to purchase Class C common shares, par value $0.01 per share (the “Class C Common Shares”), of Liberty Latin America Ltd. (the “Company”).
In Part I of this form, I (we) instruct you whether to exercise, sell or transfer the Class C Rights distributed pursuant to the terms and subject to the conditions set forth in the prospectus dated September 10, 2020.
PART I
| BOX 1. |
☐ |
Please do not exercise Class C Rights. |
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| BOX 2. |
☐ |
Please exercise Class C Rights as set forth below: |
| Number of Class C Rights |
Subscription Price | Payment | ||||||||||||||||
| Basic Subscription Privilege: |
x | $ | 7.14 | = | $ | (Line 1) | ||||||||||||
| Oversubscription Privilege: |
x | $ | 7.14 | = | $ | (Line 2) | ||||||||||||
By exercising the oversubscription privilege (the “Oversubscription Privilege”) with respect to my (our) Class C Rights, I (we) hereby represent and certify that I (we) have fully exercised my (our) basic subscription privilege (the “Basic Subscription Privilege”) received in respect of Class C common shares held in the below described capacity.
Total Payment Required = $______________
(Sum of Lines 1 and 2 must equal total of amounts in Boxes 3 and 4)
| BOX 3. |
☐ |
Payment in the following amount is enclosed: ______________ |
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| BOX 4. |
☐ |
Please deduct payment from the following account maintained by you as follows: |
| Type of Account |
Account No: |
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| Amount to be deducted: $___________________ |
Signature: |
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| Date: ______________, 2020 |
Signature: |
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| (If held jointly) | ||||||||
| BOX 5. |
☐ |
Please sell __________________of my Class C Rights. | ||
| BOX 6. |
☐ |
Please have Computershare N.A. effect my specific instructions that I have attached hereto and for which I have had an Eligible Institution guarantee my signature. |
| Signature(s): |
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| Signature(s): |
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| (If held jointly) |
| Please type or print name(s) below: |
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| Signature(s) Guaranteed by: |
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| Eligible Institution |
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