<PAGE>
DRAFT-CONFIDENTIAL
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.
Form 8-K
Current Report Pursuant to Section 13 or 15(d) of
The Securities Act of 1934
Date of Report (Date of earliest event reported): August 23, 1999
Zenith Electronics Corporation
------------------------------
(Exact name of registrant as specified in its charter)
Delaware 1-4115 36-1996520
- -------- ------ ----------
(State or jurisdiction (Commission File (IRS Employer
of incorporation) Number) Identification
No.)
1000 Milwaukee Avenue
Glenview, Illinois 60025-2493
- ------------------ ----------
(Address of principal executive offices) (Zip Code)
Registrant's Telephone Number,
Including area code (847) 391-7000
--------------
Not Applicable
--------------
(Former name and address, if changed since last report)
<PAGE>
DRAFT-CONFIDENTIAL
Item 5. Other Events
------------
On August 23, 1999, Zenith Electronics Corporation (the "Company") filed
a voluntary petition for reorganization under Chapter 11 of the U.S.
Bankruptcy Code in the United States Bankruptcy Court for the District of
Delaware (the "Bankruptcy Court"). The petition does not cover the
Company's U.S. or foreign-based subsidiaries.
In connection with the Chapter 11 filing, the Company has issued
a press release announcing the Company's filing (the "Press Release"). A
copy of the Press Release is filed as Exhibit 1 hereto.
The foregoing summary does not purport to be complete and is
qualified in its entirety by reference to the Press Release which is
incorporated by reference and the Chapter 11 petition and motions and
related pleadings and papers on file with the Bankruptcy Court.
Item 7.Financial Statements, Pro Forma Financial
-----------------------------------------
Information and Exhibits
------------------------
(c) Exhibits
99(ap) Text of Press Release dated August 23, 1999
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.
ZENITH ELECTRONICS CORPORATION
By: /S/ Richard F. Vitkus
---------------------------------
Richard F. Vitkus
Senior Vice President, General
Counsel and Secretary
Date: August 23, 1999
<PAGE>
DRAFT-CONFIDENTIAL
Exhibits Index
--------------
Exhibit
Number Exhibit Description
------ -------------------
99(ap) Press Release dated August 23, 1999
<PAGE>
Zenith - Draft #4
Chapter 11 Filling
8/17/99
ZENITH COMMENCES PREPACKAGED BANKRUPTCY
WITH STRONG BONDHOLDER SUPPORT
Court Proceeding to Have Minimal Impact on Operations;
Trade Creditors and Vendors Remain Unimpaired
GLENVIEW, Ill., August 23, 1999 - Zenith Electronics Corporation today commenced
its prepackaged plan of reorganization with the overwhelming support of its
creditors by filing a Chapter 11 petition in the U.S. Bankruptcy Court in
Wilmington, Delaware.
With bondholder approval and financing in place, today's filing represents
one of the final steps in Zenith's restructuring.
"We are gratified by the extremely strong support of our creditors in
endorsing our plan to achieve financial stability and to rebuild Zenith," said
Jeffrey P. Gannon, Zenith president and chief executive officer. "Our
operational restructuring - transforming Zenith into a sales, marketing, and
technology company - is proceeding on schedule."
The company said that of the creditors who voted in its prepetition
solicitation of consents, 97 percent of voting bondholders voted in favor of the
plan of reorganization. Pursuant to the plan, current holders of the $103.5
million in principal amount of the 6-1/4 percent Convertible Subordinated
Debentures will receive $50 million of new 8.19 percent senior debentures
maturing in November 2009.
As announced in April, Zenith has entered into a binding agreement with
Citicorp North America Inc. to provide a $150 million debtor-in-possession
financing facility to cover the period during the prepackaged court proceeding
and a new three-year, $150
<PAGE>
Zenith - Draft #4
Chapter 11 Filling
8/17/99
million credit facility to cover the period following the completion of the
Company's restructuring.
Under the plan, trade creditors and vendors will not be impaired and will
continue to be paid in the ordinary course of business. The company also expects
to continue to pay employees' pre-petition and post-petition wages, salaries and
benefits without interruption, and to fulfill obligations to customers
throughout the reorganization.
Under the plan, all outstanding common stock, including that for which LG
Electronics (LGE) paid $380 million, will be canceled, and no stockholders,
including LGE, will receive any distribution for their shares.
As part of the restructuring, the company's largest creditor, LGE, has
agreed to exchange $200 million of its claims for 100 percent of the newly
issued equity of the reorganized Zenith. In exchange for other claims, LGE will
receive certain operating assets and LGE New Restructured Senior Notes.
Following the restructuring, Zenith will be a wholly owned subsidiary of
LGE. "After emerging from the reorganization, Zenith will have access to LGE's
considerable research and manufacturing resources, enhancing Zenith's strength
and ability to compete in the rapidly evolving television industry," Gannon
said.
Major elements of Zenith's operational restructuring - establishing new
sourcing agreements with world-class manufacturers and de-emphasizing Zenith's
own manufacturing - have been completed. Zenith has closed or sold all of its
manufacturing operations except the Reynosa, Mexico, TV assembly plant, which
will be transferred to LGE as part of the restructuring.
<PAGE>
Zenith - Draft #4
Chapter 11 Filling
8/17/99
John Koo, vice chairman and chief executive officer of LG Electronics,
said, "LGE considers Zenith a very important part of our North American business
strategy. While from a financial perspective, LGE's investment in Zenith has
yielded disappointing results, we are committed to participating in this
restructuring because we believe that a restructured, refocused Zenith can be an
effective competitor in the North American television industry."
Zenith, based in Glenview, Ill., is a long-time leader in electronic
entertainment products. Zenith's largest stockholder is LGE, a global leader in
consumer electronics with operations in 180 countries and annual sales of more
than $9 billion. LGE, which owns 55 percent of the company's outstanding shares,
acquired its majority interest in November 1995.
-30-
<PAGE>
Zenith - Draft #4
Chapter 11 Filling
8/17/99
CONTACT: John I. Taylor (847) 391-8181
Certain statements in this announcement, such as statements regarding the
company's strategies, plans, objectives and expectations, are forward-looking
statements that involve known and unknown risks, uncertainties and other factors
which may cause the actual results of the company or of its efforts to execute a
business and financial restructuring to be materially different from any future
results expressed or implied by such forward-looking statements. Such factors
include, among others, general economic and business conditions, the effect of
competition in the markets served by the company, the availability and terms of
additional financing for the company, the actions of the company's existing
creditors and majority stockholder, the ability of the company and LGE to secure
necessary Korean and U.S. governmental approvals with respect to the
restructuring plan, and other factors referred to in the company's Quarterly
Report on Form 10-Q for the period ended July 3, 1999, and amended Registration
Statement on Form S-4 filed with the Securities and Exchange Commission on July
9, 1999. Given these uncertainties, undue reliance should not be placed on any
forward-looking statement contained herein.
# # #
