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
Date of Report (Date of earliest event reported): December 17, 1999
UGLY DUCKLING CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 000-20841 86-0721358
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
2525 E. Camelback Road, Suite 500, Phoenix, Arizona 85016
(Address of principal executive offices) (Zip code)
Registrant's telephone number, including area code (602) 852-6600
Not applicable.
(Former name or former address, if changed since last report.)
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Item 5. Other Events
Ugly Duckling Corporation (with its affiliates, the "Company") has entered
into a letter of intent to sell Cygnet Dealer Finance, Inc., an Arizona
corporation ("CDF"), to an entity controlled by Ernest C. Garcia II, the
Company's Chairman of the Board and principal shareholder (the "Buyer"), for an
amount equal to the book value of CDF, which is expected to be approximately $38
million. The purchase price for CDF is anticipated to be paid in the following
manner: 1) forgiveness of approximately $8 million of outstanding debt owed by
the Company to Verde Investments, Inc., an affiliate of Mr. Garcia, 2) an $12
million, ten-year promissory note from Buyer to the Company, secured by common
stock of CDF, and 3) the remaining purchase price paid in cash. The Company
would also receive a warrant to purchase a percentage of the Buyer's common
stock. While the transaction documents preclude active solicitation of other
potential buyers, the Company's board of directors may consider other offers
consistent with their fiduciary duties. The closing of the transaction is
contingent upon a number of conditions which include, but are not limited to: 1)
the Buyer obtaining satisfactory financing, 2) the approval of the transaction
by a special transaction committee comprised of independent board members, 3)
the receipt of an opinion from an independent investment banking firm that the
transaction is fair to the Company and its stockholders, and 4) the Company's
obtaining any required consents to consummate the transaction. The Company
anticipates closing the transaction prior to year end.
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SIGNATURE
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.
UGLY DUCKLING CORPORATION
Date: December 17, 1999 By: \s\ JON D. EHLINGER
---------------------------------
Vice President, Secretary and
General Counsel
