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
AUGUST 17, 1999
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Date of Report (Date of earliest event reported)
PLANET HOLLYWOOD INTERNATIONAL, INC.
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(Exact name of registrant as specified in its charter)
DELAWARE 00028230 59-3283783
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(State or other jurisdiction of (Commission File (I.R.S. Employer
incorporation or organization) Number) Identification Number)
8669 COMMODITY CIRCLE
ORLANDO, FLORIDA 32819
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(Address of principal executive office, including zip code)
(407) 363-7827
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(Registrant's telephone number, including area code)
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ITEM 5. OTHER EVENTS
On August 17, 1999, Planet Hollywood International, Inc. (the
"Company") announced that it had entered into an agreement in principle with a
subcommittee representing holders of its Senior Subordinated Notes due 2005 (the
"Notes") and with an investor group organized by Robert Earl, the Company's
founder and Chief Executive Officer, to restructure the Company's financial
position. The proposed agreement is conditioned upon acceptance by holders of
not less than $160 million of the Notes.
A description of the proposed agreement is included in the copy of the
Company's press release relating to the proposal, attached hereto as Exhibit
99.1 and incorporated herein by reference.
Prior to the Company's announcement of the proposed agreement, trading
in the Company's common stock was halted by the New York Stock Exchange.
ITEM 7. EXHIBITS.
99.1 Press Release by Planet Hollywood International Inc., dated
August 17, 1999.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Date: August 17, 1999 PLANET HOLLYWOOD
INTERNATIONAL, INC.
/s/ SCOTT E. JOHNSON
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Name: Scott E. Johnson
Title: Senior Vice President,
General Counsel and Secretary
2
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EXHIBIT INDEX
EXHIBIT NO. DESCRIPTION
- ----------- -----------
99.1 Press Release by Planet Hollywood International Inc., dated
August 17, 1999.
EXHIBIT 99.1
PRESS RELEASE
Contact: Robert Earl Jeffrey Taufield
Chairman, Chief Executive Officer Kekst and Company
(407) 351-4511 (212) 521-4800
PLANET HOLLYWOOD ANNOUNCES RESTRUCTURING AGREEMENT
--PLAN WILL PROVIDE WORKING CAPITAL TO EFFECT A TURNAROUND
AND POSITION THE COMPANY FOR FUTURE SUCCESS--
--COMPANY TO CONTINUE STEPS ALREADY UNDERWAY
TO REVITALIZE PLANET HOLLYWOOD OPERATIONS--
Orlando, FL, August 17, 1999 - Planet Hollywood International, Inc. (NYSE: PHL)
today announced it has entered into an agreement in principle with a
subcommittee representing holders of its Senior Subordinated Notes due 2005 and
with an investor group organized by Robert Earl, the Company's founder and Chief
Executive Officer, to restructure the Company's financial position. The plan is
designed to enable Planet Hollywood to resolve its financial difficulties,
stemming in part from its rapid expansion in 1996 and 1997, while positioning
the Company for a return to long-term profitability.
The plan includes a $30 million equity investment from an investor group
including two of the Company's largest shareholders, HRH Prince Alwaleed Bin
Talal and Mr. Ong Beng Seng, and a Trust in which the sole beneficiaries are Mr.
Earl's children. This capital infusion will provide the Company with the
necessary working capital to continue moving forward with its strategy to
improve performance by refocusing on its core base of Planet Hollywood
restaurants and disposing of non-core businesses and unprofitable units.
The proposed plan is conditioned upon acceptance of the offer by holders of not
less than $160 million of the Notes. The plan has already received the unanimous
support of the subcommittee, representing a minority of the Notes. The
subcommittee, which was advised by Houlihan, Lokey, Howard and Zukin, will
recommend acceptance of the agreement to an informal committee representing a
majority of the $250 million outstanding principal amount of the Notes. Planet
Hollywood has been in default on interest due on the Notes since April 1999.
The proposed agreement provides for the satisfaction of the Notes through the
issuance of a combination of $47.5 million of cash, $60 million of New Secured
PIK Notes, and New Common Stock, which will give holders of the Notes a 26.5%
equity stake in the reorganized Company. The investor group will invest $30
million to purchase a 70% equity stake in the reorganized Company and will
assist in obtaining a minimum $40 million bridge facility (the "New Senior
Secured Notes"), which will be secured by
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substantially all assets and will receive 3.5% of the New Common Stock. The
liens of the New Secured PIK Notes will be subordinate to the New Senior Secured
Notes and up to $25 million for a working capital facility.
In addition, all currently existing shares of the Company's common stock will be
cancelled and exchanged for 200,000 New Warrants for the New Common Stock
exercisable for three years. The exercise price of the New Warrants will be set
at a level such that the Warrants will be "in the money" only to the extent
unsecured creditors, including holders of the Notes, are paid in full.
Mr. Earl commented, "We are pleased to have reached an agreement in principle
that will enable Planet Hollywood to restructure its financial obligations and
will provide the Company with sufficient working capital going forward to effect
a turnaround of the business. We are confident we are taking the necessary steps
to revitalize our Planet Hollywood operations, and this plan will allow us to
continue implementing our strategy. We remain committed to providing consumers
with an exciting and unique dining experience, including great food at great
prices, and we believe this restructuring will put us in a position to do just
that for many years to come."
Under the proposed plan, the Company's Board of Directors will be reconstituted
to consist of five members designated by the investor group organized by Mr.
Earl and two members designated by the holders of the Notes. Planet Hollywood
will attempt to negotiate the restructuring of various of its leasehold and
other debt obligations as part of a definitive reorganization plan. The
restructuring will be effected through a voluntary pre-negotiated or
pre-packaged chapter 11 filing, subject to formal documentation. The Company
intends to continue its operations in the normal course of business as it
implements its business plan to refocus its core Planet Hollywood operations,
reduce overhead costs, and continue the disposition of excess assets.
Planet Hollywood's objective is to finalize and implement the restructuring
prior to year-end. However, there is no assurance that the restructuring will be
effectuated or as to the final terms of the restructuring.
Certain statements contained herein are forward-looking statements which involve
known and unknown risks and uncertainties which may cause the Company's actual
results to differ materially from what is currently anticipated. Such statements
are made pursuant to the safe harbor provisions of the Private Securities
Litigation Reform Act of 1995 and include, without limitation, the Company's
expectations and estimates as to the introduction of new products and
merchandise, future financial performance, final figures for past financial
performance, the possibility of a non-recurring charge, improved results because
of new strategies, the possibility of gains or losses from dispositions of
assets or facilities, and anticipated capital expenditures. Readers should
consider statements which use the terms "believes," "expected," "expects,"
"plans," "intends," "estimates," "anticipated," or "anticipates" to be uncertain
and forward-looking. Such statements reflect the current views of the Company
with respect to future events and are subject to risks, uncertainties and
assumptions. In addition to factors described in the Company's SEC filings, the
following factors, among others, could cause the Company's actual results to
differ materially from those expressed in any forward-looking statements made by
the Company: (i) difficulties or delays in developing and introducing new
products and merchandise or the failure of customers to accept new product
offerings; (ii) changes in consumer preferences, including reduced consumer
demand for the Company's products and brand; (iii) difficulties or delays in the
Company's implementation of initiatives and strategies, including the
introduction of a new menu; (iv) unanticipated costs or difficulties or delays
in completing projects associated with the Company's new merchandising and
marketing strategies; (v) effects and changes in economic conditions, including
inflation and monetary conditions, and in trade, monetary, fiscal and tax
policies in countries and regions outside of the U.S. in which the Company
operates, including Asia; (vi) actions taken by competitors, including business
combinations, new product offerings and marketing and promotions successes;
(vii) difficulties or delays in realizing improved results from operating
consolidations or the sale of certain facilities or assets held for sale or
franchise; and (viii) success of the Company's franchisees and licensees and the
manner in which they promote, operate or develop the Company's brands; (ix) the
availability of sufficient capital to service the Company's debt obligations and
to finance the Company's business plans on terms satisfactory to the Company;
and (x) the success of the Company's marketing of certain assets and pursuit of
financing alternatives. The Company assumes no responsibility to update
forward-looking information contained herein.
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