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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
May 31, 2000
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(Date of earliest event reported)
HUNTSMAN PACKAGING CORPORATION
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(Exact name of registrant as specified in its charter)
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<S> <C> <C>
Utah 333-40067 87-0496065
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(State or other jurisdiction of (Commission File (I.R.S. Employer
incorporation or organization) File No.) Identification
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500 Huntsman Way
Salt Lake City, Utah 84108
(801) 584-5700
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(Address of principal executive offices and telephone number,
including area code)
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ITEM 1. CHANGES IN CONTROL OF REGISTRANT
As previously reported, on March 31, 2000 Huntsman Packaging Corporation
entered into an agreement (the "Recapitalization Agreement") with Chase Domestic
Investments, L.L.C., a newly formed Delaware limited liability company
("Investor L.L.C.") and an affiliate of Chase Capital Partners ("CCP"), whereby
Investor L.L.C. agreed to acquire approximately 62% of our total common stock in
a recapitalization transaction. The recapitalization was consummated on May 31,
2000.
Pursuant to the recapitalization, we redeemed all of the shares of our
common stock held by Jon M. Huntsman, our founder, majority stockholder and
Chairman of the Board. Investor L.L.C. purchased approximately one-half of the
shares of our common stock held collectively by The Christena Karen H. Durahm
Trust (the "Trust") and by members of our senior management (the "Management
Investors"). Investor L.L.C. and certain other institutional investors also
purchased (the "Investor Common Equity Contribution") shares of common stock
directly from us. The Trust and the Management Investors retained approximately
one-half of the shares of our common stock collectively owned by them prior to
the recapitalization. In addition, we issued to Investor L.L.C. and certain
other institutional investors a new series of senior cumulative exchangeable
redeemable preferred stock (the "New Preferred Stock") and detachable warrants
for our common stock (the "New Preferred Stock Warrants"). The foregoing
transactions are collectively referred to as the "Recapitalization."
As a result of the Recapitalization, approximately 58% of our total common
stock outstanding is now owned by Investor L.L.C. and approximately 38% of such
common stock is owned collectively by the Trust and the Management Investors.
In connection with the Recapitalization, we purchased all of our
outstanding $125.0 million principal amount of 9-1/8% Senior Subordinated Notes
due 2007 (the "9-1/8% Notes") pursuant to a tender offer (the "Tender Offer").
We also solicited and received the requisite consents (the "Consent
Solicitation") from holders of the 9-1/8% Notes to amend the indenture governing
the 9-1/8% Notes (the "9-1/8% Notes Indenture") to eliminate many of the
restrictive covenants contained in the 9-1/8% Notes Indenture and to permit us
to effect the Recapitalization, issue the Units (as defined below), and incur
borrowings under the New Credit Facilities (as defined below).
Upon closing of the Recapitalization, we issued 220,000 Units (the "Units")
consisting of $220.0 million principal amount of 13% Senior Subordinated Notes
due 2010 (the "Notes") and Warrants (the "Note Warrants") to purchase 18,532
shares of common stock. The Units were issued in a transaction exempt from the
registration requirements under the Securities Act of 1933. The Notes are
unsecured. The Notes are subordinated to all of our existing and future senior
debt, rank equally with any existing and future senior subordinated debt and
rank senior to any future subordinated debt. The Notes are guaranteed by some of
our subsidiaries. The Note Warrants become exercisable on the occurrence of
certain events and mature on June 1, 2010.
Upon closing of the offering of the Units and the Recapitalization, we
refinanced all amounts outstanding under our prior credit facility (the "Prior
Credit Facility") and replaced the Prior Credit Facility with amended and
restated senior secured credit facilities (the "New Credit Facilities") that we
entered into with The Chase Manhattan Bank, Bankers Trust Company, The Bank of
Nova Scotia and a syndicate of banking institutions. The New Credit Facilities
consist of a $200.0 million senior secured tranche A facility, $40.0 million of
which will be made available to our principal Mexican subsidiary (the "Tranche A
Facility"), a $280.0 million senior secured tranche B facility (the "Tranche B
Facility") and a $100.0 million revolving credit facility (the "Revolving Credit
Facility").
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The offering of the Units, the Recapitalization, the Tender Offer and
Consent Solicitation and the entering into the New Credit Facilities are
collectively referred to as the Transactions".
The following table sets forth the estimated sources and uses of funds in
connection with the Transactions:
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Amount
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(Dollars in Millions)
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Sources:
New Credit Facilities(1) .................................. $ 485.9
Units (net of discount).................................... 214.1
New Preferred Stock and New Preferred Stock Warrants....... 100.0
Common Equity Investment(2)................................ 165.3
Trust Equity Rollover ..................................... 76.8
Management Equity Rollover ................................ 22.9
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Total ................................................. $1,065.0
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Uses:
Equity Redemption ......................................... $314.0
Investor Share Purchase ................................... 101.8
Refinance the Prior Credit Facility and other debt......... 379.5
Repay the 9-1/8% Notes .................................... 125.0
Tender and Consent Consideration .......................... 11.9
Trust Equity Rollover ..................................... 76.8
Management Equity Rollover ................................ 22.9
Transaction fees and expenses(3)........................... 33.1
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Total ................................................. $1,065.0
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(1) Represents borrowings under the New Credit Facilities made at the closing of
the Transactions, consisting of $200.0 million under the Tranche A Facility,
$280.0 million under the Tranche B Facility and $5.9 million under the
Revolving Credit Facility.
(2) Consists of the Investor Share Purchase of $101.8 million and the Investor
Common Equity Contribution of $63.5 million.
(3) Consists of debt issuance costs of approximately $18.6 million, compensation
expense related to the long-term incentive plan triggered by the
Transactions of approximately $5.0 million, estimated issuance costs for the
New Preferred Stock of $1.5 million and other fees and expenses directly
related to the Transactions of approximately $8.5 million.
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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 thereunto duly authorized.
HUNTSMAN PACKAGING CORPORATION
/s/ Scott K. Sorensen
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Scott K. Sorensen
Executive Vice President and
Chief Financial Officer, Treasurer
Date: June 14, 2000
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