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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report: March 25, 1999
Date of Earliest Event Reported: March 10, 1999
TCI SATELLITE ENTERTAINMENT, INC.
(Exact Name of Registrant as Specified in its Charter)
Delaware
(State or Other Jurisdiction of Incorporation)
000-21317 84-1299995
(Commission File Number) (I.R.S. Employer Identification No.)
8085 South Chester, Suite 300
Englewood, Colorado 80112
(Address of principal executive offices, including zip code)
Registrant's telephone number, including area code: (303) 712-4600
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Item 2. Disposition of Assets.
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Effective January 22, 1998, Tempo Satellite, Inc., a wholly-owned
subsidiary of the Registrant ("Tempo"), and PRIMESTAR, Inc. ("PRIMESTAR")
entered into an asset purchase agreement (the "Hughes High Power Agreement")
with Hughes Electronics Corporation ("Hughes"), an unaffiliated third party.
Pursuant to the Hughes High Power Agreement, Tempo agreed to sell its high power
direct broadcast satellite assets, which consist of its two high-power
satellites (one of which is currently in orbit at 119 degrees West Longitude
(the "In-Orbit Satellite") and one of which is currently used as a ground spare
(the "Ground Satellite")) and its license with respect to the 119 degrees West
Longitude orbital location (collectively, the "Tempo High Power Assets"), and
PRIMESTAR agreed to sell its option to acquire the Tempo High Power Assets to
Hughes, for aggregate consideration valued at $500 million (the "Hughes High
Power Transaction").
Due to the fact that regulatory approval is required to transfer the
In-Orbit Satellite and the license for the 119 degrees West Longitude orbital
location to Hughes, the Hughes High Power Transaction will be completed in two
steps. Effective March 10, 1999, the first closing (the "First Closing") was
consummated whereby Hughes acquired the Ground Satellite and PRIMESTAR's option
to acquire the Ground Satellite (the "Ground Satellite Option") for aggregate
consideration of $150 million. Such consideration was comprised of the
following: (1) $9,750,000 paid to PRIMESTAR for the Ground Satellite Option, (2)
$750,000 paid to Tempo to exercise the Ground Satellite Option and (3) the
assumption by Hughes of liabilities of Tempo related to the Ground Satellite in
the amount of $139,500,000 in exchange for the Ground Satellite. At December 31,
1998, the carrying value of the Ground Satellite was $224 million.
As noted above, the closing of the sale of the In-Orbit Satellite, the
119 degrees West Longitude orbital location license and PRIMESTAR's option to
acquire the In-Orbit Satellite is subject to regulatory approval, and is
expected to be consummated in the second quarter of 1999. Upon completion of the
sale of the Registrant's remaining high power assets, which had a carrying value
of $239 million at December 31 1998, the Registrant will receive additional
consideration of $325 million in the form of cash and debt assumption.
Item 7. Financial Statements and Exhibits.
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(b) Pro forma financial information
See Item 2 above for a description of the pro forma balance sheet
effects of the First Closing. The Registrant's pro forma results of operations
would not be impacted by the consummation of the First Closing because the sale
of the Ground Satellite is a nonrecurring transaction. As this narrative
description represents all of the pro forma effects of the First Closing,
detailed pro forma financial statements are not included herein.
(c) Exhibits
99.1 Hughes High Power Agreement, incorporated by reference to
Exhibit 99.2 of the Company's Current Report on Form 8-K, dated February 1,
1999.
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SIGNATURE
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Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, the Registrant has duly caused this report to be signed on its behalf
by the undersigned hereunto duly authorized.
Date: March 25, 1999
TCI SATELLITE ENTERTAINMENT, INC.
By:/s/ Kenneth G. Carroll
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Kenneth G. Carroll
Senior Vice President and
Chief Financial Officer
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Exhibit Index
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99.1 Hughes High Power Agreement, incorporated by reference to Exhibit 99.2 of
the Company's Current Report on Form 8-K, dated February 1, 1999.
