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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
JANUARY 4, 1999
ECHOSTAR COMMUNICATIONS CORPORATION
NEVADA 0-26176 88-0336997
(State or other jurisdiction of (Commission File (I.R.S. Employer
incorporation) Number) Identification No.)
5701 SOUTH SANTA FE DRIVE, LITTLETON, COLORADO 80120
(303) 723-1000
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ITEM 5. OTHER EVENTS
EchoStar Communications Corp. (NASDAQ: DISH, DISHP) announced today
that it has commenced a cash tender offer to purchase any and all of its
outstanding $232,365,391 aggregate principal amount of 12 1/8% Senior
Exchange Notes due 2004 (the "Exchange Notes") that were issued today in
exchange for all of its outstanding 12 1/8% Series B Senior Redeemable
Exchangeable Preferred Stock due 2004. The tender offer is part of a plan to
refinance existing indebtedness at more favorable rates and terms. The terms
and conditions of the tender offer are set forth in an Offer to Purchase and
Consent Solicitation Statement and a related Consent and Letter of
Transmittal. The tender offer will expire at 12:00 midnight, Eastern Time on
Monday, February 1, 1999, unless extended.
In conjunction with the tender offer, EchoStar is soliciting consents
to certain proposed amendments to the indenture governing the Exchange Notes
that would eliminate substantially all of the restrictive covenants and would
amend certain other provisions. Adoption of the proposed amendments requires
the consent of holders of not less than a majority, in the case of certain
proposed amendments, and not less than two-thirds, in the case of the other
proposed amendments, of the aggregate principal amount of Exchange Notes.
Holders who tender their Exchange Notes will be required to consent to the
proposed amendments.
The purchase price for the Exchange Notes will be determined in
accordance with a pricing formula that is based on a fixed spread of 75 basis
points above the yield on the 6 1/8% U.S. Treasury Note due July 31, 2000.
The purchase price includes a consent payment of $20 per $1,000 principal
amount of the Exchange Notes to holders who tender their Exchange Notes and
give their consent at or prior to 12:00 midnight, Eastern Time on January 8,
1999, unless extended.
Closing of the tender offer is subject to the receipt by EchoStar or
its subsidiaries of the proceeds of a new debt financing or financings
necessary to pay the consideration payable in connection with the tender
offer and the consent solicitation, the receipt of the required consents from
the holders of Exchange Notes, the receipt of the required consents and
waivers from the holders of Related Notes as described below and certain
other conditions described in the Offer to Purchase and Consent Solicitation
Statement.
On December 23, 1998, EchoStar commenced cash tender offers to
purchase any and all of the following debt securities issued by its direct
and indirect subsidiaries: the $375 million aggregate outstanding principal
amount of 12 1/2% Senior Secured Notes due 2002 issued by EchoStar DBS
Corporation; the 12 7/8% Senior Secured Discount Notes due 2004, with an
accreted value as of Jan. 1, 1999, of $592.8 million, issued by Dish, Ltd.;
and the 13 1/8%
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Senior Secured Discount Notes due 2004, with an accreted value as of Jan. 1,
1999, of $498.1 million, issued by EchoStar Satellite Broadcasting
Corporation (collectively, the "the Related Notes"). EchoStar is also
soliciting consents from the registered holders of the Related Notes to
amendments to the indentures governing the Related Notes. The proposed
amendments relating to the Related Notes include amendments similar to the
proposed amendments to the Exchange Notes and EchoStar is offering similar
compensation to holders of Related Notes as it is offering to holders of
Exchange Notes. The time by which the holders of Related Notes must tender
their Related Notes to be entitled to a consent payment is 12:00 midnight,
Thursday, Jan. 7, 1999, unless extended. Receipt of the requisite consents
to the proposed amendments to the indentures governing the Related Notes is a
condition to such payments to holders of Related Notes and to consummation of
the tender offers for both the Exchange Notes and the Related Notes.
Donaldson, Lufkin & Jenrette Securities Corporation is acting as the
sole dealer manager in connection with the tender offers for the Exchange
Notes and the Related Notes. Donaldson, Lufkin & Jenrette Securities
Corporation and NationsBanc Montgomery Securities LLC are acting as
co-financial advisors in connection with the consent solicitations. The
depositary for the tender offers is U.S. Bank Trust National Association.
Copies of the Offers to Purchase and Consent Solicitation Statements and
additional information concerning the terms of the tender offers may be
obtained by contacting Donaldson, Lufkin & Jenrette Securities Corporation
at (212) 892-7054.
Certain matters discussed in this statement are "forward looking
statements" intended to qualify for the safe harbors from liability
established by the Private Securities Litigation Reform Act of 1995. These
"forward looking statements" can generally be identified as such because the
context of the statement will include words such as the Company "believes,"
"anticipates," "expects," or words of similar import. Similarly, statements
that describe the Company's future plans, objectives or goals are
forward-looking statements. Such forward-looking statements are subject to
certain risks and uncertainties that could cause actual results to differ
materially from those currently anticipated. Such risks and uncertainties
include, but are not limited to: a total or partial loss of a satellite due
to operational failures, space debris or otherwise; uncertainty as to the
Company's future profitability; the Company's ability to develop and
implement operational and financial systems to manage rapidly growing
operations; an increase in competition from cable television, Direct
Broadcast Satellite ("DBS"), other satellite system operators, and other
providers of subscription television services; the introduction of new
technologies and competitors into the subscription television business; a
merger of existing DBS competitors; the Company's ability to integrate and
successfully operate acquired businesses and the risks associated with such
businesses; the Company's ability to obtain financing on acceptable terms to
finance the Company's growth strategy and for the Company to operate within
the limitations imposed by financing arrangements; uncertainty as to the
future profitability of acquired businesses; trends in the cable television,
broadcast television and satellite television industries; impediments to the
retransmission of local or distant broadcast network signals; a decrease in
sales of digital equipment and related services to international service
providers; a decrease in Dish Network subscriber growth; an increase in
subscriber acquisition costs; lower than expected demand for the Company's
delivery of local broadcast network signals; changes in relationships
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with customers; changes in the regulatory environment, such as the inability
of the Company to retain necessary authorizations from the Federal
Communications Commission ("FCC") or a change in the regulations governing
the subscription television service industry; the outcome of pending
litigation and regulatory inquiries; an unexpected business interruption due
to the failure of third parties to remediate Year 2000 issues; and the impact
of accounting policies required to be adopted. Other factors that could
materially affect such forward-looking statements can be found in EchoStar's
periodic reports filed with the Securities and Exchange Commission.
Shareholders, potential investors and other readers are urged to consider
these factors carefully in evaluating the forward-looking statements. The
forward-looking statements made herein are only made as of the date of this
statement and EchoStar undertakes no obligation to publicly update such
forward-looking statements to reflect subsequent events or circumstances.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
as amended, the Registrant, EchoStar Communications Corporation, has duly
caused this report to be signed on its behalf by the undersigned thereunto
duly authorized.
ECHOSTAR COMMUNICATIONS CORPORATION
By: /s/ DAVID K. MOSKOWITZ
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David K. Moskowitz
Senior Vice President and
General Counsel
Date: January 4, 1999
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