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) October 31, 2000
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CLIMACHEM, INC.
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(Exact name of registrant as specified in its charter)
Delaware 73-1528549
_________________ __________________ _______________________
(State or other (Commission File (IRS Employer
jurisdiction of Number) Identification No.)
incorporation)
16 South Pennsylvania Avenue, Oklahoma City, Oklahoma 73107
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (405) 235-4546
____________________
Not applicable
_______________________________________________________________________
(Former name or former address, if changed since last report)
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Item 2. Acquisition or Disposition of Assets.
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ClimaChem, Inc. (the "Company") is a wholly owned subsidiary of LSB
Industries, Inc. ("LSB"). On August 23, 2000, a wholly owned subsidiary
(the "Subsidiary") of LSB and Orica USA, Inc. ("Orica") entered into a
letter agreement (the "Letter Agreement") wherein the Subsidiary agreed to
acquire certain assets comprising LaRoche Industries, Inc.'s ("LaRoche")
ammonium nitrate manufacturing business located in Cherokee, Alabama and
Crystal City, Missouri (the "Assets") in the event Orica was the successful
bidder in a bankruptcy court managed action of the nitrogen products
manufacturing business of LaRoche. The bankruptcy court approved the sale
of LaRoche's nitrogen manufacturing business to Orica. Pursuant to the
terms of the Letter Agreement, Orica and its wholly owned subsidiary
assigned to subsidiaries of LSB its right to purchase all of the Assets
directly from LaRoche, effective October 31, 2000.
The purchase price for the Assets was paid in cash from the working
capital of LSB subsidiaries which are not subsidiaries of the Company. The
amount of the purchase price is subject to a confidentiality request filed
with the Securities and Exchange Commission pursuant to Rule 24b-2 as
promulgated under the Securities and Exchange Act of 1934, as amended. In
any event, the purchase price is not considered to be a material amount
based upon LSB's total assets.
The Assets consist of two chemical plants: one located in Cherokee,
Alabama ("Cherokee Plant") and the other located in Crystal City, Missouri
("Crystal City Plant"). The Assets also include all inventory, machinery
and equipment, and real property, associated with the two chemical plants.
A subsidiary of the Company leases the Crystal City Plant and the
Cherokee Plant from two LSB subsidiaries, which are not subsidiaries of the
Company. The Crystal City Plant lease is for six months and requires the
subsidiary to maintain the facility for product storage and distribution
purposes. The Cherokee Plant lease is for one year and requires monthly
lease payments of $175,000. The leases include most, but not all, of the
Assets.
The Cherokee Plant produces anhydrous ammonia, nitric acid, aqua
ammonia, agricultural grade ammonium nitrate fertilizer, urea ammonium
nitrate fertilizer and ammonium nitrate solution as a blasting product
ingredient. The Cherokee Plant will remain in operation on at least a
temporary basis while the Company evaluate's the plant's profitability.
The Crystal City Plant is capable of producing industrial grade
ammonium nitrate and agricultural grade ammonium nitrate. The Crystal City
Plant will not be operated by the Company because the Company believes that
the selling price for the ammonium nitrate produced at the Crystal City
Plant could not support the cost of operating the plant.
Orica has a one year option to acquire the nitric acid plant located
within the Crystal City Plant along with any contracts and agreements to
manufacture, toll or sale industrial grade ammonium nitrate prill or
solution from such plant. The Crystal City Plant cannot produce nitrogen
products without the nitric acid plant. The exercise price of the option
to acquire the nitric acid plant and related contracts is $150,000, and
Orica has indicated that it intends to exercise this option.
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Item 7. Financial Statements and Exhibits.
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(a) Financial Statements of Businesses Acquired. The financial
statements which may be required by Item 7(a) of Form 8-K are not
included herein, but will be filed by amendment to this Form 8-K
not later than 60 days after November 15, 2000.
(b) Pro Forma Financial Information. The pro forma financial information
which may be required by Item 7(b) of Form 8-K is not included herein,
but will be filed by amendment to this Form 8-K not later than 60
days after November 15, 2000.
(c) Exhibits.
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2.1 Letter Agreement, dated August 23, 2000, between LSB Chemical
Corp. and Orica USA, Inc. is incorporated by reference from
Exhibit 2.1 to the Form 8-K dated October 31, 2000, and filed
by LSB Industries,Inc. on November 15, 2000.
2.2 Agreement, dated October 31, 2000, between Orica Nitrogen,
L.L.C., Orica USA, Inc. and LSB Chemical Corp. is incorporated
by reference from Exhibit 2.2 to the Form 8-K dated October 31,
2000, and filed by LSB Industries, Inc. on November 15, 2000.
10.1 Press Release, dated November 3, 2000, is incorporated by
reference from Exhibit 10.1 to the Form 8-K dated October 31,
2000, and filed by LSB Industries, Inc. on November 15, 2000.
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.
Dated: November 15, 2000.
CLIMACHEM, INC.
By: /s/ Tony M. Shelby
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Tony M. Shelby,
Senior Vice President and
Chief Financial Officer
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