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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTIONS 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): June 11, 1998
@Entertainment, Inc.
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(Exact name of Registrant as Specified in Charter)
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Delaware 000-22877 06-1487156
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(State or Other Jurisdiction (Commission (IRS Employer
of Incorporation) File Number) Identification No.)
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One Commercial Plaza
Hartford, Connecticut 06103-3585
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(Address of Principal Executive Offices)
(860) 549-1674
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(Registrant's telephone number, including area code)
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Item 5. Other Events.
On June 16, 1998, @Entertainment, Inc. (the "Company") announced that it
intends to issue a debt offering with gross proceeds of approximately $225
million, pursuant to exemptions from the Securities Act of 1933, during the
second or third quarter of 1998.
In addition, the Company announced that it estimates the delay of its
planned April 18, 1998 launch of its Wizja TV programming platform and
digital satellite direct-to-home ("D-DTH") television service, due to a
standstill provision in the letter of intent which the Company entered into with
Telewizyjna Korporacja Partycypacyjna ("TKP") on April 17, 1998 (the "Letter of
Intent"), has resulted in approximately $7.2 million in out-of-pocket
expenditures.
The Company also announced that it was informed by TKP that TKP had
recently initiated arbitration proceedings before an arbitration panel in
Geneva, Switzerland relating to claims arising out of the Letter of Intent.
The Company intends to file its own claims for $10 million against TKP and
its shareholders in arbitration. A copy of the press release is attached as
Exhibit 99.1 and is incorporated herein by reference.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.
(a) Financial statements of businesses acquired.
Not applicable.
(b) Pro forma financial information.
Not applicable.
(c) Exhibits.
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Number Description
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99.1 Press Release of @ Entertainment, Inc.
dated June 16, 1998.
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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.
@ Entertainment, Inc.
Date: June 16, 1998 By: /s/ Przemyslaw Szmyt
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By: Przemyslaw Szmyt
Its: Vice President, Secretary
and General Counsel
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EXHIBIT INDEX
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Exhibit Number Description
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99.1 Press Release of @ Entertainment, Inc. dated June 16, 1998.
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@ENTERTAINMENT ANNOUNCES DEBT OFFERING
HARTFORD, CT, JUNE 16, 1998 -- @Entertainment, Inc. (NASDAQ; ATEN) announced
today that it intends to issue a debt offering with gross proceeds of
approximately $225 million, pursuant to exemptions from the registration
requirements of the Securities Act of 1933, during the second or third
quarter of 1998. Net proceeds from the offering are currently intended
primarily to fund the launch and development of the Company's digital
satellite direct-to-home ("D-DTH") business, cable television network
acquisitions, the acquisition of minority interests in certain subsidiaries,
and for general corporate purposes. The terms of the offering have not yet
been determined, and the Company cannot guarantee the timing of the offering
or whether the offering will be successful.
The Company postponed its planned launch of Wizja TV and its D-DTH service,
which was originally scheduled for April 18, 1998, due to a standstill
provision in the letter of intent which the Company entered into with
Telewizyjna Korporacja Partycypacynja S.A. ("TKP") on April 17, 1998 (the
"Letter of Intent") to bring together @Entertainment's Wizja TV programming
service and the Canal+ Polska premium pay-television channel and to provide
for the joint development and operation of a D-DTH service for the Polish
market. TKP is owned by Canal+ S.A., Agora S.A. and PolCom Invest S.A. The
Company estimates that the delay of its planned April 18, 1998 launch of Wizja
TV and its D-DTH service has resulted in approximately $7.2 million of
additional out-of-pocket expenditures as of the date hereof, including a $5
million payment to Philips Electronics B.V. to compensate it for costs
incurred as a result of the suspension of the production process for D-DTH
reception systems for the Company's planned D-DTH service.
The establishment of the joint venture was subject to the execution of
definitive agreements, regulatory approvals and certain other closing
conditions. The definitive agreements were not agreed and executed by the
parties by the date set forth in the Letter of Intent (the "Signature Date").
Therefore, the Company terminated the Letter of Intent on June 1, 1998. TKP
and its shareholders have informed the Company that they believe the Company
did not have the right to terminate the Letter of Intent.
Under the terms of the Letter of Intent, TKP is obligated to pay the Company
a $5 million Break-up Fee within 10 days of the Signature Date if the
definitive agreements were not executed by the Signature Date, unless the
failure to obtain such execution was caused by the Company's breach of any of
its obligations under the Letter of Intent. If there was any such breach by
the Company, the Company would be obligated to pay TKP $10 million. However,
if any breach of the Letter of Intent by TKP caused the definitive agreements
not to be executed, TKP would be obligated to pay the Company a total of $10
million (including the $5 million Break-up Fee). In the event that TKP fails
to pay the Company any of the above-referenced amounts owed to the Company,
TKP's shareholders are responsible for the payment of such amounts.
The Company has demanded monies from TKP and its shareholders as a result of
the failure to execute the definitive agreements by the Signature Date. While
the Company was waiting for the expiration of the 10-day period for payment
of the Break-up Fee, the Company was informed by TKP that it had initiated
arbitration proceedings before a three member arbitration panel in Geneva,
Switzerland. The Company has not yet seen a copy of TKP's claim, but the
Company intends to file its own claims for $10 million against TKP and its
shareholders in arbitration.
@Entertainment, Inc. is the developer of both Wizja TV and a D-DTH service
for the Polish market. Through its Poland Communications, Inc. subsidiary,
the Company owns and operates the largest cable television network in Poland
with approximately 865,000 subscribers at May 31, 1998.
The securities referenced herein will not be registered under the
Securities Act of 1933 and may not be offered or sold in the U.S. absent
registration under the Securities Act of 1933 or an applicable exemption from
registration requirements contained therein. This announcement shall not
constitute an offer to sell, or the solicitation of an offer to buy, any of
the instruments referenced herein.
The aforementioned remarks contain forward-looking statements that
involve significant risks and uncertainties, including without limitation
those related to variables concerning the implementation of the debt offering
and the outcome of the arbitration proceedings with TKP and its shareholders.
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