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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT ON FORM 8-K
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) July 7, 1998
FOUNTAIN OIL INCORPORATED
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(Exact name of registrant as specified in its charter)
Delaware 0-9147 91-0881481
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(State or other jurisdiction (Commission File Number) (I.R.S. Employer
of incorporation) Identification No.)
1400 Broadfield Blvd., Suite 100, Houston, Texas 77084-5163
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code 281-492-6992
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(Former name or former address, if changed since last report)
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ITEM 5. OTHER EVENTS
The Registrant issued a press release on July 7, 1998 announcing
rejection of Bargo Acquisition Corporation proposal. That press release is an
exhibit to this Form 8-K.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS
(c) Exhibits
99(1) Press Release dated July 7, 1998 announcing rejection of
Bargo proposal
SIGNATURES
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Pursuant to the requirement 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.
FOUNTAIN OIL INCORPORATED
Date: July 7, 1998 By: /s/Susan E. Palmer
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Susan E. Palmer
Corporate Secretary
2
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EXHIBIT INDEX
FILED WITH
EXHIBIT THIS
NUMBER EXHIBIT REPORT
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99(1) Press Release dated July 7, 1998 announcing
rejection of Bargo proposal X
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Exhibit 99(1)
ON FOUNTAIN OIL LETTERHEAD:
FOR IMMEDIATE RELEASE IN NORTH AMERICA AND EUROPE
FOUNTAIN OIL ANNOUNCES REJECTION OF BARGO PROPOSAL
Houston, Texas -- Oslo, Norway --- July 7, 1998 --- Fountain Oil Incorporated
(Nasdaq/NMS: GUSH), announced today that its Board of Directors rejected a
conditional proposal the Company had received last week from Bargo Acquisition
Corporation of Houston, Texas regarding a possible transaction involving the
transfer by Bargo of certain oil and gas properties in exchange for Fountain Oil
stock and the assumption of Bargo debt. Fountain Oil's stockholders are
scheduled to meet tomorrow to vote on a proposed business combination involving
Fountain and CanArgo Energy Inc.
The Bargo proposal was subject to a number of substantial conditions, including
Bargo's satisfaction with its due diligence investigation of Fountain Oil,
Fountain Oil's satisfaction with its evaluation of Bargo including the oil and
gas properties Bargo was proposing to transfer, negotiation of an acquisition
agreement including provision for the registration for resale of the shares of
Fountain Oil Common Stock that Bargo was seeking which would represent
approximately 45% of outstanding stock, regulatory approvals and the absence of
material adverse changes prior to closing.
According to Nils N. Trulsvik, Fountain Oil's President and Chief Executive
Officer, "Our Board viewed Bargo's eleventh hour proposal as being so
conditional that it amounted to little more than an invitation to commence
negotiations. Taking into account its conditional nature, the Bargo proposal
does not appear to be an attractive alternative to the CanArgo transaction,
which had been the subject of favorable `fairness' opinions rendered by CIBC
Oppenheimer Corp. and Orkla Finans (Fondsmegling) ASA. Further, pursuit of a
transaction with Bargo not only could have jeopardized the CanArgo transaction
but might also have eventually subjected Fountain to liability for a $3,000,000
`break-up' fee."
A Special Meeting of Fountain Oil's Stockholders is scheduled to be held in
Houston, Texas on Wednesday, July 8, 1998 to consider matters related to
Fountain's proposed business combination with CanArgo. Under the terms of the
proposed business combination with CanArgo, Fountain would become the owner of
what is effectively all of CanArgo's equity securities, and approximately
19,950,000 shares of Fountain Common Stock would be issuable to CanArgo
shareholders, based on an exchange ratio of 1.6 shares of Fountain Common Stock
(as presently constituted) for each outstanding CanArgo share. A Fountain Oil
stockholder may revoke a proxy given in connection with the Special Meeting at
any time prior to the voting of shares at the Special Meeting by voting in
person at that meeting or by filing with the Secretary of Fountain Oil (fax
number: 281-492-6673) a duly executed proxy bearing a later date or an
instrument revoking the proxy. Fountain currently has 22,447,489 shares
outstanding. Completion of the transaction is subject to the satisfaction of a
number of conditions, including approval by the shareholders of both companies.
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FOR FURTHER INFORMATION:
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<S> <C>
AT FOUNTAIN AT THE FINANCIAL RELATIONS BOARD, US
Contact in US: General Info: Paul Henning 212-661-8030
Susan E. Palmer, Corporate Secretary Analyst Info: Beth Lewis 617-342-7003
+1 (281) 492-6992 Media Info: Jerry Miller 212-661-8030
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Contact in Europe:
Rune Falstad, VP Finance
+47 66 78 69 00
*****
To receive Fountain Oil's latest news release and other corporate documents via
FAX -- no cost -- please dial +1 800 PRO INFO. Enter Fountain Oil's ticker --
GUSH.
The matters discussed in this press release include forward looking statements,
which are subject to various risks, uncertainties and other factors that could
cause actual results to differ materially from the results anticipated in such
forward looking statements. Such risks, uncertainties and other factors include
the need for additional approvals and the effect of actions of third parties,
including co-ventures, contractors and governmental officials, on the timing and
occurrence of anticipated events. For more complete discussion of such risks,
uncertainties and other factors, see Fountain Oil's Annual Report on Form 10-K/A
for the year ended December 31, 1997 and Fountain's Quarterly Report on Form
10-Q/A-2 filed with the Securities and Exchange Commission.
