AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON OCTOBER 8, 1997
REGISTRATION NO. 333-
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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METROMEDIA INTERNATIONAL GROUP, INC.
(Exact name of Registrant as specified in its charter)
DELAWARE 59-0971455
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
ONE MEADOWLANDS PLAZA
EAST RUTHERFORD, NEW JERSEY 07073-2137
(201) 531-8000
(Address, including zip code and telephone number, including area code, of
Registrant's principal executive offices)
ARNOLD L. WADLER, ESQ.
EXECUTIVE VICE PRESIDENT, GENERAL COUNSEL AND SECRETARY
METROMEDIA INTERNATIONAL GROUP, INC.
ONE MEADOWLANDS PLAZA
EAST RUTHERFORD, NEW JERSEY 07073-2137
(201) 531-8000
(Name, address, including zip code, and telephone number, including area code of
agent for service)
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COPIES OF COMMUNICATIONS TO:
JAMES M. DUBIN, ESQ.
PAUL, WEISS, RIFKIND, WHARTON & GARRISON
1285 AVENUE OF THE AMERICAS
NEW YORK, NEW YORK 10019-6064
(212) 373-3000
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APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From time
to time after the Registration Statement becomes effective.
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If the securities registered on this Form are being offered pursuant to
dividend or interest reinvestment plans, please check the following box. [ ]
If any of the securities registered on this Form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, check the following box and
list the Securities Act registration statement number of the earlier
registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If the delivery of the prospectus is expected to be made pursuant to Rule
434, please check the following box. [ ]
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
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PROPOSED MAXIMUM PROPOSED MAXIMUM AMOUNT OF
TITLE OF SHARES AMOUNT TO BE OFFERING PRICE PER AGGREGATE OFFERING REGISTRATION
TO BE REGISTERED REGISTERED SHARE (1) PRICE (1) FEE (1)
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<S> <C> <C> <C> <C>
Common Stock, $1.00 par value per share ..... 556,504(2) $13.6875 $7,617,148.50 $2,309
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(1) Pursuant to Rule 457(c), the proposed offering price and registration fee
are based upon the average of the high and low prices of the Registrant's
Common Stock on October 6, 1997 as reported on the American Stock Exchange.
(2) Includes 300,000 shares of Common Stock, par value $1.00 per share (the
"Common Stock"), of the Company being registered hereby on behalf of John D.
Phillips or any transferee of John D. Phillips and 256,504 shares of Common
Stock being registered hereby on behalf of certain individuals who were
granted shares of Common Stock pursuant to the Metromedia International
Group, Inc./Motion Picture Corporation of America Restricted Stock Plan.
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The Registrant hereby amends this Registration Statement on such date or
dates as may be necessary to delay its effective date until the
Registrant shall file a further amendment which specifically states that this
Registration Statement shall thereafter become effective in accordance
with Section 8(a) of the Securities Act of 1933 or until this Registration
Statement shall become effective on such date as the Commission, acting pursuant
to said Section 8(a), may determine.
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EXPLANATORY NOTE
The Registration Statement contains two separate prospectuses. The first
prospectus relates to shares of Common Stock held by John D. Phillips, the
former President and Chief Executive Officer of the Company, pursuant to an
Option Agreement, dated April 19, 1994, between The Actava Group Inc. (now known
as the Company) and John D. Phillips. The second prospectus relates to shares of
Common Stock held by certain individuals pursuant to the Metromedia
International Group, Inc./Motion Picture Corporation of America Restricted Stock
Plan.
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Information contained herein is subject to completion or amendment. A
registration statement relating to these securities has been filed with the
Securities and Exchange Commission. These securities may not be sold nor may
offers to buy be accepted prior to the time the registration statement becomes
effective. This prospectus shall not constitute an offer to sell or the
solicitation of an offer to buy nor shall there be any sale of these securities
in any State in which such offer, solicitation or sale would be unlawful prior
to registration or qualification under the securities laws of any such State.
PROSPECTUS
300,000 SHARES
METROMEDIA INTERNATIONAL GROUP, INC.
COMMON STOCK
The 300,000 shares (the "Shares") of Common Stock, par value $1.00 per share
(the "Common Stock"), of Metromedia International Group, Inc. (the "Company")
offered hereby are being offered for the account of John D. Phillips (the
"Selling Stockholder") or any transferee thereof (a "Transferee" and, if a
transfer occurs, the Transferee shall be deemed to be the Selling Stockholder
hereunder). The Company will not receive any proceeds from the sale of such
securities. See "Selling Stockholder."
The Selling Stockholder may sell the Shares offered hereby from time to time
on the American Stock Exchange and the Pacific Stock Exchange or such other
national securities exchange or automated interdealer quotation system on which
shares of the Company's Common Stock are then listed, through negotiated
transactions or otherwise (including private sales) at market prices prevailing
at the time of the sale or at negotiated prices. The Selling Stockholder
directly, or through agents designated from time to time, or through
underwriters, brokers or dealers also to be designated, may sell the Shares from
time to time on terms to be determined at the time of sale. Such underwriters,
brokers or dealers may receive compensation in the form of commissions or
otherwise in such amounts as may be negotiated by them. As of the date of this
Prospectus, no agreements have been reached for the sale of the Shares or the
amount of any compensation to be paid to underwriters, brokers or dealers in
connection therewith. The Company will bear all expenses in connection with the
registration and sale of the Shares being offered by the Selling Stockholder,
other than commissions, concessions or discounts to underwriters, brokers or
dealers and fees and expenses of counsel or other advisors to the Selling
Stockholder. See "Plan of Distribution."
The Common Stock of the Company is listed on the American Stock Exchange and
the Pacific Stock Exchange under the trading symbol "MMG." On October 6, 1997,
the last reported sale price of the Company's Common Stock on the American Stock
Exchange was $13.50 per share.
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THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR
HAS THE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
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The date of this Prospectus is October 8, 1997
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No person has been authorized in connection with this offering to give any
information or to make any representation not contained or incorporated by
reference in this Prospectus, and, if given or made, such information or
representation must not be relied upon as having been authorized by the Company.
Neither the delivery of this Prospectus nor any sales hereunder shall under any
circumstances create any implication that the information contained herein is
correct as of any time subsequent to the date hereof or the dates as of which
information is otherwise set forth or incorporated by reference herein. This
Prospectus does not constitute an offer to sell or a solicitation of an offer to
purchase any securities other than those to which it relates or an offer to any
person in any jurisdiction where such offer or solicitation would be unlawful.
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith files reports, proxy statements, information statements and other
information with the Commission. Such reports, proxy statements, information
statements and other information can be inspected and copied at the public
reference facilities of the Commission at Room 1024, 450 Fifth Street, N.W.,
Washington, D.C. 20549, and at the Commission's regional offices at 500 West
Madison Street, Suite 1400, Chicago, Illinois 60661-2511 and 7 World Trade
Center, 13th Floor, New York, New York 10048. Copies of such material can also
be obtained from the Commission's web site at "http://www.sec.gov" and from the
Public Reference Facilities maintained by the Commission at Judiciary Plaza, 450
Fifth Street, N.W., Room 1024, Washington, D.C. 20549, at prescribed rates. The
Common Stock is listed on the American Stock Exchange and such reports, proxy
statements and other information concerning the Company may be inspected at the
offices of the AMEX, 86 Trinity Place, New York, New York 10006.
The Company has filed with the Commission a Registration Statement on Form
S-3 under the Securities Act of 1933, as amended (the "Securities Act") with
respect to the shares of Common Stock offered hereby. This Prospectus does not
contain all the information set forth in the Registration Statement and the
exhibits and schedules thereto. For further information with respect to the
Company and the shares of Common Stock offered hereby, reference is made
concerning the contents of any document referred to herein and not necessarily
complete and, in each such instance, are qualified in all respects by reference
to the applicable documents filed with the Commission. The Registration
Statement and the exhibits and schedules thereto filed by the Company with the
Commission may be inspected and copied at the locations described above.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents heretofore filed by the Company with the Commission
(File No. 1-5706) are incorporated by reference into this Prospectus and made a
part hereof:
(1) The Company's Annual Report on Form 10-K for the year ended December
31, 1996 filed with the Commission on March 31, 1997, as amended by Form
10-K/A Amendment No. 1 filed with the Commission on June 17, 1996 (File No.
1-5706).
(2) The Company's Quarterly Report on Form 10-Q for the quarter ended
June 30, 1997 filed with the Commission on August 14, 1997 (File No. 1-5706).
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(3) The Company's Current Report on Form 8-K dated February 11, 1997
filed with the Commission on February 12, 1997 (File No. 1-5706).
(4) The Company's Current Report on Form 8-K dated May 2, 1997 filed
with the Commission on May 6, 1997 (File No. 1-5706).
(5) The Company's Registration Statement on Form S-3 filed with the
Commission on April 4, 1997, as amended by Amendment No. 1 to Registration
Statement on Form S-3 filed with the Commission on August 6, 1997, as
amended by Amendment No. 2 to Registration Statement on Form S-3 filed with
the Commission on August 29, 1997, as amended by Amendment No. 3 to
Registration Statement on Form S-3 filed with the Commission on September
10, 1997 (File No. 333-35349).
(6) The Consolidated Financial Statements and related schedules of The
Actava Group Inc. (now known as the Company) included in the Annual Report
on Form 10-K for the fiscal year ended December 31, 1994 filed with the
Commission on March 31, 1995, as amended by Form 10-K/A Amendment No. 1
filed with the Commission on April 28, 1995 and Form 10-K/A Amendment No. 2
filed with the Commission on July 13, 1995 (File No. 1-5706).
(7) The Consolidated Financial Statements and related schedules of The
Samuel Goldwyn Company included in The Samuel Goldwyn Company Annual Report
on Form 10-K for the year ended March 31, 1996 filed with the Commission on
June 30, 1996 (File No. 1-10935).
(8) The description of the Company's Common Stock contained in its
registration statement on Form 8-A, as filed with the Commission on November
1, 1995, including any amendment or report filed for the purpose of amending
such description (File No. 1-5706).
In addition, all reports and documents filed by the Company pursuant to
Sections 13(a), 13(c), 14 or 15(d) of the 1934 Act subsequent to the date hereof
and prior to the filing of a post-effective amendment which indicates that all
securities offered hereby have been sold or which deregisters all securities
then remaining unsold, shall be deemed to be incorporated by reference herein
and made a part hereof from the date of the filing of such documents.
The Company will provide without charge to each person to whom this
Prospectus is delivered, at the written or oral request of such person, a copy
of any or all of the foregoing documents incorporated herein by reference, other
than exhibits to such documents (unless such exhibits are specifically
incorporated by reference into the foregoing documents). Any such request should
be directed to Secretary, Metromedia International Group, Inc., One Meadowlands
Plaza, East Rutherford, New Jersey 07073, telephone (201) 531-8000.
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SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
Certain statements in or incorporated by reference into this Prospectus
constitute "forward-looking statements" within the meaning of the Private
Securities Litigation Reform Act of 1995 (the "Reform Act"). Such
forward-looking statements involve known and unknown risks, uncertainties and
other factors which may cause the actual results, performance or achievements of
the Company, or industry results, to be materially different from any future
results, performance, or achievements expressed or
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implied by such forward-looking statements. Such factors include, among others,
the following: general economic and business conditions, which will, among other
things, impact demand for the Company's products and services; industry
capacity, which tends to increase during strong years of the business cycle;
changes in public taste, industry trends and demographic changes; competition
from other communications companies, which may affect the Company's ability to
generate revenues; political, social and economic conditions and laws, rules and
regulations, particularly in Eastern Europe, the republics of the former Soviet
Union, the People's Republic of China (the "PRC") and other selected emerging
markets, which may affect the Company's results of operations; timely completion
of construction projects for new systems for the joint ventures in which the
Company has invested, which may impact the costs of such projects; developing
legal structures in Eastern Europe, the republics of the former Soviet Union,
the PRC and other selected emerging markets, which may affect the Company's
results of operations; cooperation of local partners for the Company's
communications investments in Eastern Europe, the republics of the former Soviet
Union, the PRC and other selected emerging markets; exchange rate fluctuations;
license renewals for the Company's investments in Eastern Europe, the republics
of the former Soviet Union, the PRC and other selected emerging markets; the
loss of any significant customers; changes in business strategy or development
plans; quality of management; availability of qualified personnel; changes in,
or the failure to comply with, government regulations; and other factors
referenced in or incorporated by reference into this Prospectus.
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RISK FACTORS
IN ADDITION TO THE OTHER INFORMATION INCORPORATED BY REFERENCE AND CONTAINED
IN THIS PROSPECTUS, THE FOLLOWING FACTORS SHOULD BE CONSIDERED CAREFULLY IN
EVALUATING THE COMPANY AND ITS BUSINESS BEFORE PURCHASING THE COMMON STOCK
OFFERED HEREBY. CERTAIN STATEMENTS SET FORTH BELOW UNDER THIS CAPTION CONSTITUTE
"FORWARD-LOOKING STATEMENTS" WITHIN THE MEANING OF THE REFORM ACT.
OPERATING LOSSES; NO ASSURANCE OF PROFITABILITY
For the six-months ended June 30, 1997 and 1996 and the years ended December
31, 1996 and 1995, the Company reported a loss from continuing operations of
approximately $58.8 million and $29.3 million and $71.0 million and $36.3
million, respectively, and a net loss of $95.2 million and $38.0 million and
$115.2 million and $413 million, respectively. The Company expects that it will
report significant operating losses for the fiscal year ended December 31, 1997,
including losses attributable to Snapper, Inc., a subsidiary of the Company
("Snapper"), whose results of operations have been included in the Company's
consolidated results of operations since November 1, 1996. In addition, the
Communications Group is in the early stages of development and the Company
expects this group to continue to generate significant losses as it continues to
build out and market its services. Accordingly, the Company expects to generate
consolidated losses for the foreseeable future.
FUTURE FINANCING NEEDS
The Communications Group's businesses are capital intensive and require the
investment of significant amounts of capital in order to construct and develop
operational systems and market its services. As a result, the Company may
require equity or debt financing in order to satisfy its on-going working
capital and debt service requirements and to achieve its long-term business
strategies. Such additional capital may be provided through the public or
private sale of debt or equity securities. No assurance can be given that
additional financing will be available to the Company on acceptable terms, if at
all. If adequate additional funds are not available, the Company may be required
to curtail significantly its long term business objectives and the Company's
results from operations may be materially and adversely affected.
COMPETITIVE INDUSTRIES
The Company operates in businesses which are highly competitive and such
businesses compete with many other communications and media companies, many of
which are well-known global communications and media companies with
substantially greater financial, management and other resources than the
Company. The Communications Group operates in industries that are highly
competitive worldwide. The Company recognizes that, in the future, the
Communications Group is likely to encounter significant competition from other
entities which may be led by successful and experienced members of the
communications industry and which may have established operating infrastructures
and superior access to financial resources. The Communications Group also faces
potential competition from competing technologies which could emerge over time
in Eastern Europe, the republics of the former Soviet Union, the PRC and other
selected emerging markets and compete directly with the Communications Group's
operations. In addition, the Company does not expect to maintain or to be
granted exclusive licenses to operate its communications businesses in any of
the markets where it currently provides or plans to provide its services.
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CONTROL OF THE COMPANY BY METROMEDIA COMPANY DUE TO CONCENTRATION OF SHARE
OWNERSHIP AND VOTING CONTROL
Metromedia Company and its affiliates collectively own approximately 23% of
the outstanding shares of Common Stock and is the Company's largest stockholder.
Metromedia Company has nominated or designated a majority of the members of the
Company's Board of Directors. In accordance with the Restated Certificate of
Incorporation and By-laws of the Company and Delaware law, in the future, the
majority of the members of the Company's Board of Directors will nominate the
directors for election to the Company's Board of Directors. Accordingly, it is
likely that directors designated or nominated by Metromedia Company will
continue to constitute a majority of the members of the Company's Board of
Directors. As such, Metromedia Company will likely control the direction of
future operations of the Company, including decisions regarding acquisitions and
other business opportunities, the declaration of dividends and the issuance of
additional shares of the Company's capital stock and other securities. Such
concentration of ownership may also have the effect of delaying, deferring or
preventing a change of control of the Company pursuant to a transaction which
might otherwise be beneficial to stockholders.
ANTI-TAKEOVER PROVISIONS IN THE COMPANY'S CHARTER AND BY-LAWS
The Company's Restated Certificate of Incorporation and By-laws contain
provisions that could delay, defer or prevent a change in control without the
approval of its incumbent Board of Directors. These provisions, among other
things, (i) divide the Board of Directors into three classes, with members of
each class to be elected in staggered three-year terms; (ii) prohibit
stockholder action by written consent in lieu of a meeting; (iii) limit the
right to call special meetings of stockholders to the Chairman or Vice Chairman
of the Company's Board of Directors; and (iv) authorize the Board of Directors
to issue preferred stock in one or more classes or series without any action on
the part of stockholders. Such provisions could limit the price that investors
might be willing to pay in the future for shares of Common Stock and
significantly impede the ability of the holders of Common Stock to replace
management. In addition, the Company's Board of Directors intends to adopt a
stockholder rights plan which will have certain anti-takeover effects. The
Company does not intend to solicit stockholder approval with respect to its
stockholder rights plan. Although the exact terms of such rights plan have not
been determined, it is anticipated that such rights plan will cause substantial
dilution to a person or group that attempts to acquire the Company on terms not
approved by the Company's Board of Directors. Provisions and agreements that
inhibit or discourage takeover attempts could reduce the market value of the
Common Stock.
ENVIRONMENTAL MATTERS
The Company is subject to federal, state and local laws, regulations and
ordinances that (i) govern activities or operations that may have adverse
environmental effects, such as discharges to air and water, as well as handling
and disposal practices for solid and hazardous wastes and (ii) impose liability
for the costs of cleaning up, and certain damages resulting from, sites of past
spills, disposals or other releases of hazardous substances. The Company,
through its predecessors, has been in operation since 1929 and, over the years,
has operated in diverse industries, including, various equipment, sporting goods
and furniture manufacturing, sheet metal processing, and trucking. With the
exception of Snapper and the Company's interest in RDM, the Company has divested
itself of all non-communications, entertainment and media-related operations.
However, in the course of certain such divestitures, the Company has retained
certain indemnification obligations for environmental cleanup matters, and in
one case a contaminated parcel at which the Company has undertaken cleanup
activities. In other cases, particularly for operations that were divested in
the past, the Company could incur unanticipated environmental cleanup
obligations, to the extent they may exist or arise in the future, as a result,
at least in part, of
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changes in legal requirements that have occurred since such divestitures. At the
present time, the Company is not aware of any environmental liabilities related
to any such divestitures that the Company believes would have a material adverse
effect on its results of operations or financial condition. However, because
some divestitures may have occurred many years ago, there can be no assurance
that environmental matters will not arise in the future that could have such an
effect.
POLITICAL, SOCIAL AND ECONOMIC RISKS
The Communications Group's operations may be materially and adversely
affected by significant political, social and economic uncertainties in Eastern
Europe, the republics of the former Soviet Union, the PRC and in other selected
emerging markets where it conducts or may in the future conduct business.
Political stability in many of the Communications Group's markets has been
affected by political tensions between different branches of government. In
addition, internal military conflicts have occurred in certain regions of some
of the countries in which the Communications Group has made investments. There
are also concerns about potential civil unrest fueled by, among other things,
economic and social crises in certain of the Communications Group's markets.
Moreover, political tensions between national and local governments in certain
of the Communications Group's markets could have a material adverse effect on
the Communications Group's operations in such areas. The Communications Group's
operations may also be materially and adversely affected by bureaucratic
infighting between government agencies with unclear and overlapping
jurisdictions.
The governments in the Communications Group's markets exercise substantial
influence over many aspects of the private sector. The governments in these
areas have been attempting to a varying degree to implement economic reform
policies and encourage private economic activity. However, these reforms have
been only partially successful to date. The economies in many of the
Communications Group's markets are still characterized by high unemployment,
high inflation, high foreign debt, weak currencies and the possibility of
widespread bankruptcies. Moreover, in some of the Communications Group's
markets, the governments have continued to reserve large sectors of the economy
for state ownership and have not dismantled all portions of the command economy
system. Important infrastructure and utility sectors, such as certain sectors of
the telecommunications industry, of some of the economies in which the
Communications Group conducts or plans to conduct business are still primarily
state-owned and operated and are subject to pervasive regulatory control.
Despite some success in implementing reform policies and developing the private
sector, there can be no assurance that the pursuit of economic reforms by any of
these governments will continue or prove to be ultimately effective, especially
in the event of a change in leadership, social or political disruption or other
circumstances affecting economic, political or social conditions.
GENERAL OPERATING RISKS
The Communications Group's operating results are dependent upon the ability
to attract subscribers to its cable, paging and telephony systems, the sale of
commercial advertising time on its radio stations and its ability to control
overall operating expenses. The ability to attract subscribers is dependent on
the general economic conditions in the market where each cable, paging and
telephony system is located, the relative popularity of such systems, the
demographic characteristics of the potential subscribers to such systems, the
technical attractiveness to customers of the equipment and service of such
systems, the activities of competitors and other factors which may be outside of
the Communications Group's control. In addition, the sale of commercial
advertising time on the Communications Group's AM/FM radio stations is similarly
dependent on economic conditions in the market in which such stations are
located, the relative popularity of such stations, the demographic
characteristics of the audience of such stations, the activities of competitors
and other factors beyond the control of the Communications Group.
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The Communications Group relies heavily in many of the countries in which it
operates upon the availability and accessibility of government-owned broadcast
and transmission facilities for distribution of its signal throughout its
license areas. Most of the joint ventures in which the Communications Group
makes investments require substantial construction of new systems and additions
to the physical plant of existing systems. Construction projects are adversely
affected by cost overruns and delays not within the control of the
Communications Group or its subcontractors, such as those caused by governmental
action or inaction. In addition, delays also can occur as a result of design
changes and material or equipment shortages or delays in delivery of material or
equipment. The failure to complete construction of a communications system on a
timely basis could jeopardize the franchise or license for such system or
provide opportunities to the Communications Group's competitors.
RISKS INHERENT IN FOREIGN INVESTMENT
The Communications Group has invested substantially all of its resources in
operations outside of the United States and, in the ordinary course of its
business, plans to make additional international investments in the near future.
Risks inherent in foreign operations include loss of revenue, property and
equipment from expropriation, nationalization, war, insurrection, terrorism and
other political risks, risks of increases in taxes and governmental royalties
and involuntary modifications of contracts with or licenses issued by foreign
governments or their affiliated commercial enterprises.
The Communications Group is also vulnerable to the risk of changes in
foreign and domestic laws and policies that govern operations of overseas-based
companies. Exchange control regulations currently in place or which could be
enacted in many of the Communication Group's markets could create substantial
barriers to the conversion or repatriation of funds, and such restrictions could
adversely affect the Communications Group's and the Company's ability to pay
overhead expenses, meet any of their respective debt obligations and to continue
and expand its communications businesses. Tax laws and regulations may also be
amended or differently interpreted and implemented, thereby adversely affecting
the profitability after tax of the Communications Group's ventures. In addition,
criminal organizations in certain of the countries in which the Communications
Group operates may threaten and intimidate businesses. While the Communications
Group has thus far not experienced widespread difficulties with criminal
organizations in these countries, there can be no assurance that such pressures
from criminal organizations will not increase in the future and have a material
adverse effect on the Company and its operations.
There is significant uncertainty as to the extent to which local parties and
entities, particularly government authorities, in the Communications Group's
markets will respect the contractual and other rights of foreign parties, such
as the Communications Group, and also the extent to which the "rule of law" has
taken hold and will be upheld in each of these countries. Although the general
legal framework and the governments' strategy in some of the Communications
Group's markets currently encourage foreign trade and investments, relevant laws
of the countries in which the Communications Group has invested may not be
enforced in accordance with their terms or implemented in countries in which
they do not now exist. Laws in the Communications Group's markets affecting
foreign investment, trade and communications activities often change and create
uncertainty and confusion. Additionally, foreign investment and sales may be
materially and adversely affected by conflicting and restrictive administrative
regulations in many of the Communications Group's markets.
The Communications Group may also be materially and adversely affected by
laws restricting foreign investment in the field of communications. Certain
countries have extensive restrictions on foreign investment in the
communications field and the Communications Group is attempting to structure its
prospective projects in order to comply with such laws. However, there can be no
assurance that such
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legal and regulatory restrictions will not increase in the future or, as
currently promulgated, will not be interpreted in a manner giving rise to
tighter restrictions, and thus may have a material adverse effect on the
Company's prospective projects in that country. The Russian Federation has
periodically proposed legislation that would limit the ownership percentage that
foreign companies can have in communications businesses. While such proposed
legislation has not been made into law, it is possible that such legislation
could be enacted in Russia and/or that other countries in Eastern Europe and the
republics of the former Soviet Union may enact similar legislation which could
have a material adverse effect on the business, operations, financial condition
or prospects of the Communications Group. Such legislation could be similar to
United States Federal law which limits the foreign ownership in entities owning
broadcasting licenses. Similarly, PRC law and regulation restrict and prohibit
foreign companies or joint ventures in which they participate from providing
telephony service to customers in the PRC and generally limit the role that
foreign companies or their joint ventures may play in the telecommunications
industry. As a result, Asian American Telecommunications Corporation, a
subsidiary of the Company conducting business primarily in the PRC ("AAT"),
unlike the Communications Group's joint ventures in Eastern Europe and in the
republics of the former Soviet Union, must structure its transactions as a
provider of telephony equipment and technical and support services as opposed to
a direct provider of such services. These legal restrictions in the PRC may
limit the ability of AAT to control the management and direction of the
telecommunications systems in which it invests in the PRC. In addition, there is
no way of predicting whether other foreign ownership limitations will be enacted
in any of the Communications Group's markets, or whether any such law, if
enacted, will force the Communications Group to reduce or restructure its
ownership interest in any of the ventures in which the Communications Group
currently has an ownership interest. If foreign ownership limitations are
enacted in any of the Communications Group's markets and the Communications
Group is required to reduce or restructure its ownership interests in any
ventures, it is unclear how such reduction or restructuring would be
implemented, or what impact such reduction or restructuring would have on the
Communications Group.
DEVELOPING LEGAL STRUCTURES IN TARGET MARKETS
As a result of political, economic and social changes in Eastern Europe, the
republics of the former Soviet Union, the PRC and in other selected emerging
markets, the bodies of commercial and corporate laws in the Communications
Group's markets are, in most cases, in their formative stages. Despite the fact
that many of these areas have undergone radical changes in recent years,
commercial and corporate laws in these markets are still significantly less
developed or clear than comparable laws in the United States and countries of
Western Europe and are subject to frequent changes, preemption and
reinterpretation by local or administrative regulations, by administrative
officials and, in the case of Eastern Europe and republics of the former Soviet
Union, by new governments. Such lack of development or clarity makes it
difficult for the Communications Group's businesses to plan operations and
maintain compliance with administrative interpretations of the law. No assurance
can be given that the uncertainties associated with the existing and future laws
and regulations in the Communications Group's markets will not have a material
adverse effect on the Company's ability to conduct its business and to generate
profits.
Laws relating to telecommunications are also in their developmental stage in
most of the markets in which the Communications Group operates and are often
modified. In one market in which the Communications Group operates, the
government has begun to charge license fees for use of newly and previously
issued licenses. At this time, the Communications Group does not yet know the
amount its joint venture will be charged for the use of its license in this
market.
In addition, the courts in many of the Communications Group's markets often
do not have the experience, resources or authority to resolve significant
economic disputes and enforce their decisions.
9
<PAGE>
In some cases courts are not insulated from political considerations and other
outside pressures and sometimes do not function in an independent manner.
Enforcement of legal rights in these areas is also affected in some cases by
political discretion and lobbying. This creates particular concerns for the
Communications Group because the licenses held by the Communications Group's
businesses or the contracts providing such businesses access to the airwaves or
other rights essential for operations may be significantly modified, revoked or
canceled without justification, and legal redress may be substantially delayed
or even unavailable in such cases.
RISK INHERENT IN GROWTH STRATEGY
The Communications Group has grown rapidly since its inception. Many of the
Communications Group's ventures are either in developmental stages or have only
recently commenced operations. The Communications Group has incurred significant
operating losses to date. The Communications Group is pursuing additional
investments in a variety of communications businesses in both its existing
markets and additional markets. This growth strategy entails the risks inherent
in assessing the strength and weaknesses of development opportunities, in
evaluating the costs and uncertain returns of developing and constructing the
facilities for operating systems and in integrating and managing the operations
of existing and additional systems. The Company's growth strategy requires the
Company to expend significant capital in order to enable it to continue to
develop its existing operations and to invest in additional ventures. There can
be no assurance that the Company will have the funds necessary to support the
capital needs of the Communications Group's current investments or any of the
Communications Group's additional investment opportunities or that the
Communications Group will be able to obtain financing from third parties. If
such financing is unavailable, the Communications Group may not be able to
further develop its existing ventures and the number of additional ventures in
which it invests may be significantly curtailed.
APPROVALS AND UNCERTAINTY OF LICENSE RENEWALS
The Communications Group's joint ventures' operations are subject to
governmental regulation in its markets and its operations require certain
governmental approvals. The licenses pursuant to which the Communications
Group's joint ventures operate are issued for limited periods, including certain
licenses which are renewable annually. Certain of these licenses expire over the
next several years. In addition, licenses held by two of the Communications
Group's joint ventures have recently expired, although these joint ventures have
been permitted to continue operations while the reissuance is pending. Such
joint ventures applied for renewals and expects new licenses to be issued. Four
other licenses held or used by Communications Group's joint ventures will expire
during 1997. While there can be no assurance on the matter, based on past
experience, the Communications Group expects that all of these licenses will be
renewed. For most of the licenses held or used by the Communications Group's
joint ventures, no statutory or regulatory presumption exists for renewal by the
current license holder, and there can be no assurance that such licenses will be
renewed upon the expiration of their current terms. The Communications Group's
partners in these ventures have not advised the Communications Group of any
reason such licenses would not be renewed. The failure of such licenses to be
renewed may have a material adverse effect on the Company. There can also be no
assurance that the Communications Group's joint ventures will obtain necessary
approvals to operate additional wireless cable television, fixed telephony or
paging systems or radio broadcast stations in any of the markets in which it is
seeking to establish its businesses.
Additionally, certain of the licenses pursuant to which the Communications
Group's businesses operate contain network build-out milestones. The failure to
satisfy such milestones could result in the loss of such licenses which may have
a material adverse effect on the Company.
10
<PAGE>
EXCHANGE RATE FLUCTUATIONS AND INFLATION RISKS IN TARGET MARKETS
The Communications Group's strategy is to minimize its foreign currency
exposure risk. To the extent possible, in countries that have experienced high
rates of inflation, the Communications Group bills and collects all revenues in
U.S. dollars or an equivalent local currency amount adjusted on a monthly basis
for exchange rate fluctuations. The Communications Group's joint ventures are
generally permitted to maintain U.S. dollar accounts to service their U.S.
dollar-denominated credit lines, thereby reducing foreign currency risk. As the
Communications Group and its joint venture investees expand their operations and
become more dependent on local currency-based transactions, the Communications
Group expects that its foreign currency exposure will increase. The
Communications Group does not hedge against foreign exchange rate risks at the
current time and therefore could be subject in the future to any declines in
exchange rates between the time a joint venture receives its funds in local
currencies and the time it distributes such funds in U.S. dollars to the
Company. In addition, the economies of certain of the Communications Group's
target markets, including but not limited to Russia, Romania, Hungary,
Lithuania, Belarus, Georgia, the PRC and Kazakstan, have experienced significant
and, in some periods, extremely high rates of inflation over the past few years.
Inflation and rapid fluctuation in exchange rates have had and may continue to
have a negative effect on these economies and may have a negative impact on the
Company's business, financial condition and results of operations.
POSSIBLE INABILITY TO CONTROL CERTAIN JOINT VENTURES
The Communications Group has invested in virtually all of its joint ventures
with local partners. Although the Communications Group exercises significant
influence in the management and operations of the joint ventures in which it has
an ownership interest and intends to invest in the future only in joint ventures
in which it can exercise significant influence in management, the degree of its
voting power and the voting power and veto rights of its joint venture partners
may limit the Communications Group from effectively controlling the operations,
strategies and financial decisions of the joint ventures in which it has an
ownership interest. In certain markets where the Communications Group conducts
or may in the future conduct business, increases in the capitalization of a
joint venture require not only the consent of all joint venture partners, but
also government approval, thereby creating a risk that a venture may not be able
to obtain additional capital without cooperation of the joint venture partner
and government approval. The Communications Group is dependent on the continuing
cooperation of its partners in the joint ventures and any significant
disagreements among the participants could have a material adverse effect on any
such venture. In addition, in many instances, the Communications Group's
partners in a joint venture include a governmental entity or an affiliate of a
governmental entity. The presence of a governmental entity or affiliate thereof
as a partner poses a number of risks, including the possibility of decreased
governmental support or enthusiasm for the venture as a result of a change of
government or government officials, a change of policy by the government and
perhaps most significantly the ability of the governmental entities to exert
undue control or influence over the project in the event of a dispute or
otherwise. In addition, to the extent joint ventures become profitable and
generate sufficient cash flows in the future, there can be no assurance that the
joint ventures will pay dividends or return capital at any time. Moreover, the
equity interests of the Communications Group in these investments generally are
not freely transferable. Therefore, there can be no assurance of the Company's
ability to realize economic benefits through the sale of the Communications
Group's interests in its joint ventures.
TECHNICAL APPROVAL OF TELEPHONY EQUIPMENT
Many of the Communications Group's proposed wireless local loop telephony
operations are dependent upon type approval of the Communications Group's
proposed wireless local loop telephony equipment by the communications
authorities in the markets where the Communications Group and its
11
<PAGE>
ventures plan to operate. While the Communications Group believes that such
equipment will be type approved, there is no assurance that this will occur and
the failure to obtain such type approvals could have a materially adverse effect
on many of the Communications Group's proposed telephony operations. In
addition, while the Communications Group believes that it will be able to
acquire sufficient amounts of wireless local loop telephony equipment from its
supplier on a timely basis, there can be no assurance that this will be the case
or that the Communications Group would be able to procure alternative equipment.
TECHNOLOGICAL OBSOLESCENCE
The communications industry has been characterized in recent years by rapid
and significant technological changes. New market entrants could introduce new
or enhanced technologies with features which would render the Communications
Group's technology obsolete or significantly less marketable. The ability of the
Communications Group to compete successfully will depend to a large extent on
its ability to respond quickly and adapt to technological changes and advances
in its industry. There can be no assurance that the Communications Group will be
able to keep pace, or will have the financial resources to keep pace, with the
technological demands of the marketplace.
12
<PAGE>
THE COMPANY
GENERAL
The Company is a global communications and media company engaged in the
development and operation of a variety of communications businesses, including
wireless cable television, AM/FM radio, paging, cellular telecommunications,
International toll calling and trunked mobile radio, in Eastern Europe, the
republics of the former Soviet Union, the PRC and other selected emerging
markets, through its Communications Group.
The Communications Group, which was founded in 1990 to take advantage of the
rapidly growing demand for modern communications services in Eastern Europe, the
republics of the former Soviet Union and other selected emerging markets,
launched its first operating system in 1992. At June 30, 1997, the
Communications Group owned interests in and participated with partners in the
management of joint ventures that had 42 operational systems, consisting of 9
wireless cable television systems, 14 AM/FM radio stations, 11 paging systems, 1
International toll calling service, 5 trunked mobile radio systems, 1 GSM
cellular telephone system and 1 joint venture that is building out an
operational GSM system and providing financing, technical assistance and
consulting services to the local system operator. In addition, the
Communications Group has interests in and participates with partners in the
management of joint ventures that, as of June 30, 1997, had 4 pre-operational
systems, consisting of 1 wireless cable television system, 1 cellular
telecommunications system, 1 company providing sales, financing and service for
wireless local loop telecommunications equipment and 1 company participating in
the construction and development of a local telephone network in the PRC for up
to 1 million lines, each of which the Communications Group believes will be
launched during 1997. The Company generally owns 50% or more of the joint
ventures in which it invests. The Company believes that the Communications Group
is poised for significant growth, as it continues to expand its existing
systems' subscriber base, construct and launch new systems in areas where it is
currently licensed and obtain new licenses in additional attractive markets. The
Company's objective is to establish the Communications Group as a major
multiple-market provider of modern communications services in Eastern Europe,
the republics of the former Soviet Union, the PRC and other selected emerging
markets.
RECENT DEVELOPMENTS
THE ENTERTAINMENT GROUP SALE. On July 10, 1997, the Company sold
substantially all of the assets of its entertainment group (the "Entertainment
Group"), consisting of Orion Pictures Corporation ("Orion"), Goldwyn
Entertainment Company ("Goldwyn") and Motion Picture Corporation of America
("MPCA") (and their respective subsidiaries) and a feature film and television
library of over 2,200 titles to P&F Acquisition Corp. ("P&F"), the parent
company of Metro-Goldwyn-Mayer Inc. ("MGM") for a gross consideration of $573.0
million (such transaction hereinafter referred to as the "Entertainment Group
Sale"). The Company used $296.4 million of the proceeds from the Entertainment
Group Sale to repay all amounts outstanding under the Entertainment Group's
credit facilities and certain other indebtedness of the Entertainment Group and
$140.0 million of such proceeds to repay all of its outstanding debentures. As a
result of the Entertainment Group Sale, the Company has narrowed its strategic
focus from operating two core businesses through the Communications Group and
the Entertainment Group to focusing primarily on the global communications and
media businesses of the Communications Group. The Entertainment Group's Landmark
Theatre Group ("Landmark"), which the Company believes is the largest exhibitor
of specialized motion pictures and art-house films in the United States with, at
June 30, 1997, 49 theaters and 139 screens, was not included in the
Entertainment Group Sale and the Company continues to own and operate Landmark
in order to maximize its value, which may include a sale of Landmark.
13
<PAGE>
PREFERRED STOCK SALE. On September 16, 1997, the Company sold 4,140,000
shares of its 7.25% convertible preferred stock (the "Preferred Stock") for
gross proceeds of $207 million. The shares of Preferred Stock are convertible at
any time at a conversion rate of 3.33 shares of common stock for each share of
Preferred Stock and redeemable on or after September 15, 2000 at a redemption
price that commences at $52.5375 and declines to $50.00 at September 15, 2007.
All dividends and redemption payments may be made in cash or a combination of
both at the election of the Company.
OTHER INFORMATION
In addition to the Communications Group and Landmark, the Company also owns,
Snapper and an investment in RDM Sports Group, Inc. (formerly known as
Roadmaster Industries, Inc.) ("RDM"). Snapper and the investment in RDM were
owned by the Company prior to the November 1 Merger (as defined below). Snapper
manufactures Snapper(R) brand premium-priced power lawnmowers, lawn tractors,
garden tillers, snow throwers and related parts and accessories. RDM is a
sporting goods manufacturer of which the Company owns approximately 19.2 million
shares (approximately 39% of the outstanding shares of RDM common stock) and
warrants to acquire an additional 3.0 million shares (approximately 5%).
After November 1, 1995, the Company publicly announced that it was actively
exploring a sale of both Snapper and its investment in RDM, and, as a result,
for accounting purposes, both assets were classified as assets held for sale for
financial statement purposes. The results of operations for Snapper were not
consolidated with the Company's consolidated results of operations for the
period from November 1, 1995 through October 31, 1996. The Company has decided
not to continue to pursue its previously adopted plan to dispose of Snapper and
to actively manage Snapper to maximize its long-term value. Since November 1,
1996, the Company has included Snapper's operating results in the consolidated
results of operations of the Company.
In addition, as of April 1, 1997, for financial statement reporting
purposes, the Company no longer qualifies to treat its investment in RDM as a
discontinued operation and the Company has included in its results of operations
the Company's share of the earnings and losses of RDM. After August 15, 1997,
RDM announced that it was experiencing significant cash flow and other financial
difficulties. On August 28, 1997, an involuntary bankruptcy petition was filed
against a subsidiary of RDM in Federal bankruptcy court in Montgomery, Alabama
and on August 29, 1997, RDM filed a voluntary bankruptcy petition under Chapter
11 of the Bankruptcy Code. In connection with a refinancing of RDM's debt, the
Company caused the issuance of a $15 million letter of credit in favor of RDM's
lender group which may be drawn at any time by RDM's lender group.
USE OF PROCEEDS
The Company will not receive any proceeds from any sale of the Shares.
SELLING STOCKHOLDER
The Selling Stockholder acquired his shares of Common Stock pursuant to that
certain Option Agreement (the "Option Agreement"), dated as of April 19, 1994,
between The Actava Group, Inc., a Delaware corporation (now known as the
Company), and the Selling Stockholder. Pursuant to the Option Agreement, the
Option (as defined therein) is transferable in whole or in part, subject to
certain restrictions contained therein. If the Option is so transferred, the
transferee shall be deemed to be the
14
<PAGE>
Selling Stockholder hereunder. The Selling Stockholder is subject to a
Registration Rights Agreement with the Company, dated as of April 19, 1994 (the
"Registration Rights Agreement"), pursuant to which the Company agreed to effect
the registration of the offering and sale of the Shares on a delayed or
continuous basis under the Securities Act on certain terms and conditions.
PLAN OF DISTRIBUTION
The Shares may be sold from time to time by the Selling Stockholder, or by
pledgees, donees, transferees or other successors in interest. Such sales may be
made on the American or the Pacific Stock Exchange or such other national
securities exchange or automated interdealer quotation system on which shares of
Common Stock are then listed, through negotiated transactions or otherwise at
prices and at terms then prevailing or at prices related to the then current
market price or in negotiated transactions. The Shares may be sold pursuant to
one or more of the following: (a) ordinary brokerage transactions and
transactions in which the broker solicits purchasers; (b) purchases by an
underwriter, a broker or a dealer as principal and resale by such underwriter,
broker or dealer for its account pursuant to this Prospectus; (c) a block trade
in which the broker or dealer so engaged will attempt to sell the Shares as
agent but may position and resell a portion of the block as principal to
facilitate the transaction; (d) an exchange distribution in accordance with the
rules of such exchange; (e) through the writing of options on the Shares; and
(f) directly or through brokers or agents in private sales at negotiated prices.
If necessary, a supplemental prospectus which describes the method of sale in
greater detail may be filed by the Company with the Commission pursuant to Rule
424(c) under the Securities Act under certain circumstances. In effecting sales,
underwriters, brokers or dealers engaged by the Selling Stockholder and/or
purchasers of the Shares may arrange for other underwriters, brokers or dealers
to participate. Underwriters, brokers or dealers will receive commissions,
concessions or discounts from the Selling Stockholder and/or the purchasers of
the Shares in amounts to be negotiated prior to the sale. In addition, any
Shares covered by this Prospectus which qualify for sale pursuant to Rule 144
under the Securities Act may be sold under Rule 144 rather than pursuant to this
Prospectus.
The Company will bear all expenses in connection with the registration and
sale of the Shares, other than commissions, concessions or discounts to
underwriters, brokers or dealers and fees and expenses of counsel or other
advisors to the Selling Stockholder.
The Selling Stockholder and any underwriter, broker or dealer who acts in
connection with the sale of the Shares hereunder may be deemed to be
"underwriters" within the meaning of Section 2(11) of the Securities Act, and
any compensation received by them and any profit on any resale of the Shares as
principals might be deemed to be underwriting discounts and commissions under
the Securities Act. Pursuant to the Registration Rights Agreement, the Company
has agreed to indemnify the Selling Stockholder against certain liabilities,
including liabilities under the Securities Act.
LEGAL MATTERS
The validity of the Common Stock offered hereby will be passed upon for the
Company by Paul, Weiss, Rifkind, Wharton & Garrison, New York, New York.
15
<PAGE>
EXPERTS
The consolidated financial statements and related schedules for the Company
as of December 31, 1996 and December 31, 1995 and for each of the years in the
two-year period ended December 31, 1996, and for the year ended February 28,
1995 and the financial statements for AAT as of December 31, 1996, and for the
period from January 22, 1996 (date of inception) to December 31, 1996, have been
incorporated by reference herein in reliance upon the reports of KPMG Peat
Marwick LLP, independent certified public accountants incorporated by reference
herein, and upon the authority of said firm as experts in accounting and
auditing.
The consolidated financial statements and related schedules of The Actava
Group Inc. appearing in The Actava Group Inc. Annual Report on Form 10-K for the
year ended December 31, 1994, as amended, have been audited by Ernst & Young
LLP, independent auditors, as set forth in their report thereon included therein
and incorporated herein by reference. Such consolidated financial statements and
related schedules are incorporated by reference in reliance upon such report
given upon the authority of such firm as experts in accounting and auditing.
The consolidated financial statements and related schedules of The Samuel
Goldwyn Company as of March 31, 1996 and 1995 and for the three years ended
March 31, 1996, appearing in The Samuel Goldwyn Company Annual Report on Form
10-K for the year ended March 31, 1996 have been incorporated herein in reliance
upon the report of Price Waterhouse LLP, independent public accountants,
included therein and upon the authority of such firm as experts in accounting
and auditing.
The report of Price Waterhouse LLP on the consolidated financial statements
of The Samuel Goldwyn Company as of March 31, 1996 and 1995 and for the three
years ended March 31, 1996 contains an explanatory paragraph stating that the
possibility that The Samuel Goldwyn Company's credit facility and loan terms may
not be extended beyond the June 28, 1996 maturity date raises substantial doubt
about its ability to continue as a going concern.
16
<PAGE>
================================================================================
No person has been authorized to give any information or to make any
representations other than those contained in this Prospectus, and, if given or
made, such information or representations must not be relied upon as having been
authorized. This Prospectus does not constitute an offer to sell or the
solicitation of an offer to buy any securities other than the securities to
which it relates or an offer to sell or the solicitation of an offer to buy such
securities in any circumstance in which such offer or solicitation is unlawful.
Neither the delivery of this Prospectus nor any sale made hereunder shall, under
any circumstances, create any implication that there has been no change in the
affairs of the Company since the date hereof or that the information contained
herein is correct at any time subsequent to its date.
------------------
TABLE OF CONTENTS
Page
Available Information ................................................. 2
Incorporated of Certain Documents
by Reference ........................................................ 2
Special Note Regarding
Forward-Looking Statements .......................................... 3
Risk Factors .......................................................... 5
The Company ........................................................... 13
Use of Proceeds ....................................................... 14
Selling Stockholder ................................................... 14
Plan of Distribution .................................................. 15
Legal Matters ......................................................... 15
Experts ............................................................... 16
================================================================================
300,000 SHARES
METROMEDIA INTERNATIONAL
GROUP, INC.
COMMON STOCK
(par value $1.00 per share)
PROSPECTUS
October 8, 1997
================================================================================
<PAGE>
Information contained herein is subject to completion or amendment. A
registration statement relating to these securities has been filed with the
Securities and Exchange Commission. These securities may not be sold nor may
offers to buy be accepted prior to the time the registration statement becomes
effective. This prospectus shall not constitute an offer to sell or the
solicitation of an offer to buy nor shall there be any sale of these securities
in any State in which such offer, solicitation or sale would be unlawful prior
to registration or qualification under the securities laws of any such State.
PROSPECTUS
256,504 SHARES
METROMEDIA INTERNATIONAL GROUP, INC.
COMMON STOCK
The 256,504 shares (the "Shares") of Common Stock, par value $1.00 per share
(the "Common Stock"), of Metromedia International Group, Inc. (the "Company")
offered hereby are being offered for the account of certain individuals (the
"Selling Stockholders") granted shares of Common Stock pursuant to the
Metromedia International Group, Inc./Motion Picture Corporation of America
Restricted Stock Plan (the "Stock Plan"). The Company will not receive any
proceeds from the sale of such securities. See "Selling Stockholders."
The Selling Stockholders may sell the Shares offered hereby from time to time
on the American Stock Exchange and the Pacific Stock Exchange or such other
national securities exchange or automated interdealer quotation system on which
shares of the Company's Common Stock are then listed, through negotiated
transactions or otherwise (including private sales) at market prices prevailing
at the time of the sale or at negotiated prices. The Selling Stockholders
directly, or through agents designated from time to time, or through
underwriters, brokers or dealers also to be designated, may sell the Shares from
time to time on terms to be determined at the time of sale. Such underwriters,
brokers or dealers may receive compensation in the form of commissions or
otherwise in such amounts as may be negotiated by them. As of the date of this
Prospectus, no agreements have been reached for the sale of the Shares or the
amount of any compensation to be paid to underwriters, brokers or dealers in
connection therewith. The Company will bear all expenses in connection with the
registration and sale of the Shares being offered by the Selling Stockholders,
other than commissions, concessions or discounts to underwriters, brokers or
dealers and fees and expenses of counsel or other advisors to the Selling
Stockholders. See "Plan of Distribution."
The Common Stock of the Company is listed on the American Stock Exchange and
the Pacific Stock Exchange under the trading symbol "MMG." On October 6, 1997,
the last reported sale price of the Company's Common Stock on the American Stock
Exchange was $13.50 per share.
------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR
HAS THE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
------------
The date of this Prospectus is October 8, 1997
<PAGE>
No person has been authorized in connection with this offering to give any
information or to make any representation not contained or incorporated by
reference in this Prospectus, and, if given or made, such information or
representation must not be relied upon as having been authorized by the Company.
Neither the delivery of this Prospectus nor any sales hereunder shall under any
circumstances create any implication that the information contained herein is
correct as of any time subsequent to the date hereof or the dates as of which
information is otherwise set forth or incorporated by reference herein. This
Prospectus does not constitute an offer to sell or a solicitation of an offer to
purchase any securities other than those to which it relates or an offer to any
person in any jurisdiction where such offer or solicitation would be unlawful.
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith files reports, proxy statements, information statements and other
information with the Commission. Such reports, proxy statements, information
statements and other information can be inspected and copied at the public
reference facilities of the Commission at Room 1024, 450 Fifth Street, N.W.,
Washington, D.C. 20549, and at the Commission's regional offices at 500 West
Madison Street, Suite 1400, Chicago, Illinois 60661-2511 and 7 World Trade
Center, 13th Floor, New York, New York 10048. Copies of such material can also
be obtained from the Commission's web site at "http://www.sec.gov" and from the
Public Reference Facilities maintained by the Commission at Judiciary Plaza, 450
Fifth Street, N.W., Room 1024, Washington, D.C. 20549, at prescribed rates. The
Common Stock is listed on the American Stock Exchange and such reports, proxy
statements and other information concerning the Company may be inspected at the
offices of the AMEX, 86 Trinity Place, New York, New York 10006.
The Company has filed with the Commission a Registration Statement on Form
S-3 under the Securities Act of 1933, as amended (the "Securities Act") with
respect to the shares of Common Stock offered hereby. This Prospectus does not
contain all the information set forth in the Registration Statement and the
exhibits and schedules thereto. For further information with respect to the
Company and the shares of Common Stock offered hereby, reference is made
concerning the contents of any document referred to herein and not necessarily
complete and, in each such instance, are qualified in all respects by reference
to the applicable documents filed with the Commission. The Registration
Statement and the exhibits and schedules thereto filed by the Company with the
Commission may be inspected and copied at the locations described above.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents heretofore filed by the Company with the Commission
(File No. 1-5706) are incorporated by reference into this Prospectus and made a
part hereof:
(1) The Company's Annual Report on Form 10-K for the year ended December
31, 1996 filed with the Commission on March 31, 1997, as amended by Form
10-K/A Amendment No. 1 filed with the Commission on June 17, 1996 (File No.
1-5706).
(2) The Company's Quarterly Report on Form 10-Q for the quarter ended
June 30, 1997 filed with the Commission on August 14, 1997 (File No. 1-5706).
2
<PAGE>
(3) The Company's Current Report on Form 8-K dated February 11, 1997
filed with the Commission on February 12, 1997 (File No. 1-5706).
(4) The Company's Current Report on Form 8-K dated May 2, 1997 filed
with the Commission on May 6, 1997 (File No. 1-5706).
(5) The Company's Registration Statement on Form S-3 filed with the
Commission on April 4, 1997, as amended by Amendment No. 1 to Registration
Statement on Form S-3 filed with the Commission on August 6, 1997, as amended
by Amendment No. 2 to Registration Statement on Form S-3 filed with the
Commission on August 29, 1997, as amended by Amendment No. 3 to Registration
Statement on Form S-3 filed with the Commission on September 10, 1997 (File
No. 333-35349).
(6) The Consolidated Financial Statements and related schedules of The
Actava Group Inc. (now known as the Company) included in the Annual Report on
Form 10-K for the fiscal year ended December 31, 1994 filed with the
Commission on March 31, 1995, as amended by Form 10-K/A Amendment No. 1 filed
with the Commission on April 28, 1995 and Form 10-K/A Amendment No. 2 filed
with the Commission on July 13, 1995 (File No. 1-5706).
(7) The Consolidated Financial Statements and related schedules of The
Samuel Goldwyn Company included in The Samuel Goldwyn Company Annual Report
on Form 10-K for the year ended March 31, 1996 filed with the Commission on
June 30, 1996 (File No. 1-10935).
(8) The description of the Company's Common Stock contained in its
registration statement on Form 8-A, as filed with the Commission on November
1, 1995, including any amendment or report filed for the purpose of amending
such description (File No. 1-5706).
In addition, all reports and documents filed by the Company pursuant to
Sections 13(a), 13(c), 14 or 15(d) of the 1934 Act subsequent to the date hereof
and prior to the filing of a post-effective amendment which indicates that all
securities offered hereby have been sold or which deregisters all securities
then remaining unsold, shall be deemed to be incorporated by reference herein
and made a part hereof from the date of the filing of such documents.
The Company will provide without charge to each person to whom this
Prospectus is delivered, at the written or oral request of such person, a copy
of any or all of the foregoing documents incorporated herein by reference, other
than exhibits to such documents (unless such exhibits are specifically
incorporated by reference into the foregoing documents). Any such request should
be directed to Secretary, Metromedia International Group, Inc., One Meadowlands
Plaza, East Rutherford, New Jersey 07073, telephone (201) 531-8000.
------------
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
Certain statements in or incorporated by reference into this Prospectus
constitute "forward-looking statements" within the meaning of the Private
Securities Litigation Reform Act of 1995 (the "Reform Act"). Such
forward-looking statements involve known and unknown risks, uncertainties and
other factors which may cause the actual results, performance or achievements of
the Company, or industry results, to be materially different from any future
results, performance, or achievements expressed or
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implied by such forward-looking statements. Such factors include, among others,
the following: general economic and business conditions, which will, among other
things, impact demand for the Company's products and services; industry
capacity, which tends to increase during strong years of the business cycle;
changes in public taste, industry trends and demographic changes; competition
from other communications companies, which may affect the Company's ability to
generate revenues; political, social and economic conditions and laws, rules and
regulations, particularly in Eastern Europe, the republics of the former Soviet
Union, the People's Republic of China (the "PRC") and other selected emerging
markets, which may affect the Company's results of operations; timely completion
of construction projects for new systems for the joint ventures in which the
Company has invested, which may impact the costs of such projects; developing
legal structures in Eastern Europe, the republics of the former Soviet Union,
the PRC and other selected emerging markets, which may affect the Company's
results of operations; cooperation of local partners for the Company's
communications investments in Eastern Europe, the republics of the former Soviet
Union, the PRC and other selected emerging markets; exchange rate fluctuations;
license renewals for the Company's investments in Eastern Europe, the republics
of the former Soviet Union, the PRC and other selected emerging markets; the
loss of any significant customers; changes in business strategy or development
plans; quality of management; availability of qualified personnel; changes in,
or the failure to comply with, government regulations; and other factors
referenced in or incorporated by reference into this Prospectus.
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RISK FACTORS
IN ADDITION TO THE OTHER INFORMATION INCORPORATED BY REFERENCE AND CONTAINED
IN THIS PROSPECTUS, THE FOLLOWING FACTORS SHOULD BE CONSIDERED CAREFULLY IN
EVALUATING THE COMPANY AND ITS BUSINESS BEFORE PURCHASING THE COMMON STOCK
OFFERED HEREBY. CERTAIN STATEMENTS SET FORTH BELOW UNDER THIS CAPTION CONSTITUTE
"FORWARD-LOOKING STATEMENTS" WITHIN THE MEANING OF THE REFORM ACT.
OPERATING LOSSES; NO ASSURANCE OF PROFITABILITY
For the six-months ended June 30, 1997 and 1996 and the years ended December
31, 1996 and 1995, the Company reported a loss from continuing operations of
approximately $58.8 million and $29.3 million and $71.0 million and $36.3
million, respectively, and a net loss of $95.2 million and $38.0 million and
$115.2 million and $413 million, respectively. The Company expects that it will
report significant operating losses for the fiscal year ended December 31, 1997,
including losses attributable to Snapper, Inc., a subsidiary of the Company
("Snapper"), whose results of operations have been included in the Company's
consolidated results of operations since November 1, 1996. In addition, the
Communications Group is in the early stages of development and the Company
expects this group to continue to generate significant losses as it continues to
build out and market its services. Accordingly, the Company expects to generate
consolidated losses for the foreseeable future.
FUTURE FINANCING NEEDS
The Communications Group's businesses are capital intensive and require the
investment of significant amounts of capital in order to construct and develop
operational systems and market its services. As a result, the Company may
require equity or debt financing in order to satisfy its on-going working
capital and debt service requirements and to achieve its long-term business
strategies. Such additional capital may be provided through the public or
private sale of debt or equity securities. No assurance can be given that
additional financing will be available to the Company on acceptable terms, if at
all. If adequate additional funds are not available, the Company may be required
to curtail significantly its long term business objectives and the Company's
results from operations may be materially and adversely affected.
COMPETITIVE INDUSTRIES
The Company operates in businesses which are highly competitive and such
businesses compete with many other communications and media companies, many of
which are well-known global communications and media companies with
substantially greater financial, management and other resources than the
Company. The Communications Group operates in industries that are highly
competitive worldwide. The Company recognizes that, in the future, the
Communications Group is likely to encounter significant competition from other
entities which may be led by successful and experienced members of the
communications industry and which may have established operating infrastructures
and superior access to financial resources. The Communications Group also faces
potential competition from competing technologies which could emerge over time
in Eastern Europe, the republics of the former Soviet Union, the PRC and other
selected emerging markets and compete directly with the Communications Group's
operations. In addition, the Company does not expect to maintain or to be
granted exclusive licenses to operate its communications businesses in any of
the markets where it currently provides or plans to provide its services.
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CONTROL OF THE COMPANY BY METROMEDIA COMPANY DUE TO CONCENTRATION OF SHARE
OWNERSHIP AND VOTING CONTROL
Metromedia Company and its affiliates collectively own approximately 23% of
the outstanding shares of Common Stock and is the Company's largest stockholder.
Metromedia Company has nominated or designated a majority of the members of the
Company's Board of Directors. In accordance with the Restated Certificate of
Incorporation and By-laws of the Company and Delaware law, in the future, the
majority of the members of the Company's Board of Directors will nominate the
directors for election to the Company's Board of Directors. Accordingly, it is
likely that directors designated or nominated by Metromedia Company will
continue to constitute a majority of the members of the Company's Board of
Directors. As such, Metromedia Company will likely control the direction of
future operations of the Company, including decisions regarding acquisitions and
other business opportunities, the declaration of dividends and the issuance of
additional shares of the Company's capital stock and other securities. Such
concentration of ownership may also have the effect of delaying, deferring or
preventing a change of control of the Company pursuant to a transaction which
might otherwise be beneficial to stockholders.
ANTI-TAKEOVER PROVISIONS IN THE COMPANY'S CHARTER AND BY-LAWS
The Company's Restated Certificate of Incorporation and By-laws contain
provisions that could delay, defer or prevent a change in control without the
approval of its incumbent Board of Directors. These provisions, among other
things, (i) divide the Board of Directors into three classes, with members of
each class to be elected in staggered three-year terms; (ii) prohibit
stockholder action by written consent in lieu of a meeting; (iii) limit the
right to call special meetings of stockholders to the Chairman or Vice Chairman
of the Company's Board of Directors; and (iv) authorize the Board of Directors
to issue preferred stock in one or more classes or series without any action on
the part of stockholders. Such provisions could limit the price that investors
might be willing to pay in the future for shares of Common Stock and
significantly impede the ability of the holders of Common Stock to replace
management. In addition, the Company's Board of Directors intends to adopt a
stockholder rights plan which will have certain anti-takeover effects. The
Company does not intend to solicit stockholder approval with respect to its
stockholder rights plan. Although the exact terms of such rights plan have not
been determined, it is anticipated that such rights plan will cause substantial
dilution to a person or group that attempts to acquire the Company on terms not
approved by the Company's Board of Directors. Provisions and agreements that
inhibit or discourage takeover attempts could reduce the market value of the
Common Stock.
ENVIRONMENTAL MATTERS
The Company is subject to federal, state and local laws, regulations and
ordinances that (i) govern activities or operations that may have adverse
environmental effects, such as discharges to air and water, as well as handling
and disposal practices for solid and hazardous wastes and (ii) impose liability
for the costs of cleaning up, and certain damages resulting from, sites of past
spills, disposals or other releases of hazardous substances. The Company,
through its predecessors, has been in operation since 1929 and, over the years,
has operated in diverse industries, including, various equipment, sporting goods
and furniture manufacturing, sheet metal processing, and trucking. With the
exception of Snapper and the Company's interest in RDM, the Company has divested
itself of all non-communications, entertainment and media-related operations.
However, in the course of certain such divestitures, the Company has retained
certain indemnification obligations for environmental cleanup matters, and in
one case a contaminated parcel at which the Company has undertaken cleanup
activities. In other cases, particularly for operations that were divested in
the past, the Company could incur unanticipated environmental cleanup
obligations, to the extent they may exist or arise in the future, as a result,
at least in part, of
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changes in legal requirements that have occurred since such divestitures. At the
present time, the Company is not aware of any environmental liabilities related
to any such divestitures that the Company believes would have a material adverse
effect on its results of operations or financial condition. However, because
some divestitures may have occurred many years ago, there can be no assurance
that environmental matters will not arise in the future that could have such an
effect.
POLITICAL, SOCIAL AND ECONOMIC RISKS
The Communications Group's operations may be materially and adversely
affected by significant political, social and economic uncertainties in Eastern
Europe, the republics of the former Soviet Union, the PRC and in other selected
emerging markets where it conducts or may in the future conduct business.
Political stability in many of the Communications Group's markets has been
affected by political tensions between different branches of government. In
addition, internal military conflicts have occurred in certain regions of some
of the countries in which the Communications Group has made investments. There
are also concerns about potential civil unrest fueled by, among other things,
economic and social crises in certain of the Communications Group's markets.
Moreover, political tensions between national and local governments in certain
of the Communications Group's markets could have a material adverse effect on
the Communications Group's operations in such areas. The Communications Group's
operations may also be materially and adversely affected by bureaucratic
infighting between government agencies with unclear and overlapping
jurisdictions.
The governments in the Communications Group's markets exercise substantial
influence over many aspects of the private sector. The governments in these
areas have been attempting to a varying degree to implement economic reform
policies and encourage private economic activity. However, these reforms have
been only partially successful to date. The economies in many of the
Communications Group's markets are still characterized by high unemployment,
high inflation, high foreign debt, weak currencies and the possibility of
widespread bankruptcies. Moreover, in some of the Communications Group's
markets, the governments have continued to reserve large sectors of the economy
for state ownership and have not dismantled all portions of the command economy
system. Important infrastructure and utility sectors, such as certain sectors of
the telecommunications industry, of some of the economies in which the
Communications Group conducts or plans to conduct business are still primarily
state-owned and operated and are subject to pervasive regulatory control.
Despite some success in implementing reform policies and developing the private
sector, there can be no assurance that the pursuit of economic reforms by any of
these governments will continue or prove to be ultimately effective, especially
in the event of a change in leadership, social or political disruption or other
circumstances affecting economic, political or social conditions.
GENERAL OPERATING RISKS
The Communications Group's operating results are dependent upon the ability
to attract subscribers to its cable, paging and telephony systems, the sale of
commercial advertising time on its radio stations and its ability to control
overall operating expenses. The ability to attract subscribers is dependent on
the general economic conditions in the market where each cable, paging and
telephony system is located, the relative popularity of such systems, the
demographic characteristics of the potential subscribers to such systems, the
technical attractiveness to customers of the equipment and service of such
systems, the activities of competitors and other factors which may be outside of
the Communications Group's control. In addition, the sale of commercial
advertising time on the Communications Group's AM/FM radio stations is similarly
dependent on economic conditions in the market in which such stations are
located, the relative popularity of such stations, the demographic
characteristics of the audience of such stations, the activities of competitors
and other factors beyond the control of the Communications Group.
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The Communications Group relies heavily in many of the countries in which it
operates upon the availability and accessibility of government-owned broadcast
and transmission facilities for distribution of its signal throughout its
license areas. Most of the joint ventures in which the Communications Group
makes investments require substantial construction of new systems and additions
to the physical plant of existing systems. Construction projects are adversely
affected by cost overruns and delays not within the control of the
Communications Group or its subcontractors, such as those caused by governmental
action or inaction. In addition, delays also can occur as a result of design
changes and material or equipment shortages or delays in delivery of material or
equipment. The failure to complete construction of a communications system on a
timely basis could jeopardize the franchise or license for such system or
provide opportunities to the Communications Group's competitors.
RISKS INHERENT IN FOREIGN INVESTMENT
The Communications Group has invested substantially all of its resources in
operations outside of the United States and, in the ordinary course of its
business, plans to make additional international investments in the near future.
Risks inherent in foreign operations include loss of revenue, property and
equipment from expropriation, nationalization, war, insurrection, terrorism and
other political risks, risks of increases in taxes and governmental royalties
and involuntary modifications of contracts with or licenses issued by foreign
governments or their affiliated commercial enterprises.
The Communications Group is also vulnerable to the risk of changes in foreign
and domestic laws and policies that govern operations of overseas-based
companies. Exchange control regulations currently in place or which could be
enacted in many of the Communication Group's markets could create substantial
barriers to the conversion or repatriation of funds, and such restrictions could
adversely affect the Communications Group's and the Company's ability to pay
overhead expenses, meet any of their respective debt obligations and to continue
and expand its communications businesses. Tax laws and regulations may also be
amended or differently interpreted and implemented, thereby adversely affecting
the profitability after tax of the Communications Group's ventures. In addition,
criminal organizations in certain of the countries in which the Communications
Group operates may threaten and intimidate businesses. While the Communications
Group has thus far not experienced widespread difficulties with criminal
organizations in these countries, there can be no assurance that such pressures
from criminal organizations will not increase in the future and have a material
adverse effect on the Company and its operations.
There is significant uncertainty as to the extent to which local parties and
entities, particularly government authorities, in the Communications Group's
markets will respect the contractual and other rights of foreign parties, such
as the Communications Group, and also the extent to which the "rule of law" has
taken hold and will be upheld in each of these countries. Although the general
legal framework and the governments' strategy in some of the Communications
Group's markets currently encourage foreign trade and investments, relevant laws
of the countries in which the Communications Group has invested may not be
enforced in accordance with their terms or implemented in countries in which
they do not now exist. Laws in the Communications Group's markets affecting
foreign investment, trade and communications activities often change and create
uncertainty and confusion. Additionally, foreign investment and sales may be
materially and adversely affected by conflicting and restrictive administrative
regulations in many of the Communications Group's markets.
The Communications Group may also be materially and adversely affected by
laws restricting foreign investment in the field of communications. Certain
countries have extensive restrictions on foreign investment in the
communications field and the Communications Group is attempting to structure its
prospective projects in order to comply with such laws. However, there can be no
assurance that such
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legal and regulatory restrictions will not increase in the future or, as
currently promulgated, will not be interpreted in a manner giving rise to
tighter restrictions, and thus may have a material adverse effect on the
Company's prospective projects in that country. The Russian Federation has
periodically proposed legislation that would limit the ownership percentage that
foreign companies can have in communications businesses. While such proposed
legislation has not been made into law, it is possible that such legislation
could be enacted in Russia and/or that other countries in Eastern Europe and the
republics of the former Soviet Union may enact similar legislation which could
have a material adverse effect on the business, operations, financial condition
or prospects of the Communications Group. Such legislation could be similar to
United States Federal law which limits the foreign ownership in entities owning
broadcasting licenses. Similarly, PRC law and regulation restrict and prohibit
foreign companies or joint ventures in which they participate from providing
telephony service to customers in the PRC and generally limit the role that
foreign companies or their joint ventures may play in the telecommunications
industry. As a result, Asian American Telecommunications Corporation, a
subsidiary of the Company conducting business primarily in the PRC ("AAT"),
unlike the Communications Group's joint ventures in Eastern Europe and in the
republics of the former Soviet Union, must structure its transactions as a
provider of telephony equipment and technical and support services as opposed to
a direct provider of such services. These legal restrictions in the PRC may
limit the ability of AAT to control the management and direction of the
telecommunications systems in which it invests in the PRC. In addition, there is
no way of predicting whether other foreign ownership limitations will be enacted
in any of the Communications Group's markets, or whether any such law, if
enacted, will force the Communications Group to reduce or restructure its
ownership interest in any of the ventures in which the Communications Group
currently has an ownership interest. If foreign ownership limitations are
enacted in any of the Communications Group's markets and the Communications
Group is required to reduce or restructure its ownership interests in any
ventures, it is unclear how such reduction or restructuring would be
implemented, or what impact such reduction or restructuring would have on the
Communications Group.
DEVELOPING LEGAL STRUCTURES IN TARGET MARKETS
As a result of political, economic and social changes in Eastern Europe, the
republics of the former Soviet Union, the PRC and in other selected emerging
markets, the bodies of commercial and corporate laws in the Communications
Group's markets are, in most cases, in their formative stages. Despite the fact
that many of these areas have undergone radical changes in recent years,
commercial and corporate laws in these markets are still significantly less
developed or clear than comparable laws in the United States and countries of
Western Europe and are subject to frequent changes, preemption and
reinterpretation by local or administrative regulations, by administrative
officials and, in the case of Eastern Europe and republics of the former Soviet
Union, by new governments. Such lack of development or clarity makes it
difficult for the Communications Group's businesses to plan operations and
maintain compliance with administrative interpretations of the law. No assurance
can be given that the uncertainties associated with the existing and future laws
and regulations in the Communications Group's markets will not have a material
adverse effect on the Company's ability to conduct its business and to generate
profits.
Laws relating to telecommunications are also in their developmental stage in
most of the markets in which the Communications Group operates and are often
modified. In one market in which the Communications Group operates, the
government has begun to charge license fees for use of newly and previously
issued licenses. At this time, the Communications Group does not yet know the
amount its joint venture will be charged for the use of its license in this
market.
In addition, the courts in many of the Communications Group's markets often
do not have the experience, resources or authority to resolve significant
economic disputes and enforce their decisions.
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In some cases courts are not insulated from political considerations and other
outside pressures and sometimes do not function in an independent manner.
Enforcement of legal rights in these areas is also affected in some cases by
political discretion and lobbying. This creates particular concerns for the
Communications Group because the licenses held by the Communications Group's
businesses or the contracts providing such businesses access to the airwaves or
other rights essential for operations may be significantly modified, revoked or
canceled without justification, and legal redress may be substantially delayed
or even unavailable in such cases.
RISK INHERENT IN GROWTH STRATEGY
The Communications Group has grown rapidly since its inception. Many of the
Communications Group's ventures are either in developmental stages or have only
recently commenced operations. The Communications Group has incurred significant
operating losses to date. The Communications Group is pursuing additional
investments in a variety of communications businesses in both its existing
markets and additional markets. This growth strategy entails the risks inherent
in assessing the strength and weaknesses of development opportunities, in
evaluating the costs and uncertain returns of developing and constructing the
facilities for operating systems and in integrating and managing the operations
of existing and additional systems. The Company's growth strategy requires the
Company to expend significant capital in order to enable it to continue to
develop its existing operations and to invest in additional ventures. There can
be no assurance that the Company will have the funds necessary to support the
capital needs of the Communications Group's current investments or any of the
Communications Group's additional investment opportunities or that the
Communications Group will be able to obtain financing from third parties. If
such financing is unavailable, the Communications Group may not be able to
further develop its existing ventures and the number of additional ventures in
which it invests may be significantly curtailed.
APPROVALS AND UNCERTAINTY OF LICENSE RENEWALS
The Communications Group's joint ventures' operations are subject to
governmental regulation in its markets and its operations require certain
governmental approvals. The licenses pursuant to which the Communications
Group's joint ventures operate are issued for limited periods, including certain
licenses which are renewable annually. Certain of these licenses expire over the
next several years. In addition, licenses held by two of the Communications
Group's joint ventures have recently expired, although these joint ventures have
been permitted to continue operations while the reissuance is pending. Such
joint ventures applied for renewals and expects new licenses to be issued. Four
other licenses held or used by Communications Group's joint ventures will expire
during 1997. While there can be no assurance on the matter, based on past
experience, the Communications Group expects that all of these licenses will be
renewed. For most of the licenses held or used by the Communications Group's
joint ventures, no statutory or regulatory presumption exists for renewal by the
current license holder, and there can be no assurance that such licenses will be
renewed upon the expiration of their current terms. The Communications Group's
partners in these ventures have not advised the Communications Group of any
reason such licenses would not be renewed. The failure of such licenses to be
renewed may have a material adverse effect on the Company. There can also be no
assurance that the Communications Group's joint ventures will obtain necessary
approvals to operate additional wireless cable television, fixed telephony or
paging systems or radio broadcast stations in any of the markets in which it is
seeking to establish its businesses.
Additionally, certain of the licenses pursuant to which the Communications
Group's businesses operate contain network build-out milestones. The failure to
satisfy such milestones could result in the loss of such licenses which may have
a material adverse effect on the Company.
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EXCHANGE RATE FLUCTUATIONS AND INFLATION RISKS IN TARGET MARKETS
The Communications Group's strategy is to minimize its foreign currency
exposure risk. To the extent possible, in countries that have experienced high
rates of inflation, the Communications Group bills and collects all revenues in
U.S. dollars or an equivalent local currency amount adjusted on a monthly basis
for exchange rate fluctuations. The Communications Group's joint ventures are
generally permitted to maintain U.S. dollar accounts to service their U.S.
dollar-denominated credit lines, thereby reducing foreign currency risk. As the
Communications Group and its joint venture investees expand their operations and
become more dependent on local currency-based transactions, the Communications
Group expects that its foreign currency exposure will increase. The
Communications Group does not hedge against foreign exchange rate risks at the
current time and therefore could be subject in the future to any declines in
exchange rates between the time a joint venture receives its funds in local
currencies and the time it distributes such funds in U.S. dollars to the
Company. In addition, the economies of certain of the Communications Group's
target markets, including but not limited to Russia, Romania, Hungary,
Lithuania, Belarus, Georgia, the PRC and Kazakstan, have experienced significant
and, in some periods, extremely high rates of inflation over the past few years.
Inflation and rapid fluctuation in exchange rates have had and may continue to
have a negative effect on these economies and may have a negative impact on the
Company's business, financial condition and results of operations.
POSSIBLE INABILITY TO CONTROL CERTAIN JOINT VENTURES
The Communications Group has invested in virtually all of its joint ventures
with local partners. Although the Communications Group exercises significant
influence in the management and operations of the joint ventures in which it has
an ownership interest and intends to invest in the future only in joint ventures
in which it can exercise significant influence in management, the degree of its
voting power and the voting power and veto rights of its joint venture partners
may limit the Communications Group from effectively controlling the operations,
strategies and financial decisions of the joint ventures in which it has an
ownership interest. In certain markets where the Communications Group conducts
or may in the future conduct business, increases in the capitalization of a
joint venture require not only the consent of all joint venture partners, but
also government approval, thereby creating a risk that a venture may not be able
to obtain additional capital without cooperation of the joint venture partner
and government approval. The Communications Group is dependent on the continuing
cooperation of its partners in the joint ventures and any significant
disagreements among the participants could have a material adverse effect on any
such venture. In addition, in many instances, the Communications Group's
partners in a joint venture include a governmental entity or an affiliate of a
governmental entity. The presence of a governmental entity or affiliate thereof
as a partner poses a number of risks, including the possibility of decreased
governmental support or enthusiasm for the venture as a result of a change of
government or government officials, a change of policy by the government and
perhaps most significantly the ability of the governmental entities to exert
undue control or influence over the project in the event of a dispute or
otherwise. In addition, to the extent joint ventures become profitable and
generate sufficient cash flows in the future, there can be no assurance that the
joint ventures will pay dividends or return capital at any time. Moreover, the
equity interests of the Communications Group in these investments generally are
not freely transferable. Therefore, there can be no assurance of the Company's
ability to realize economic benefits through the sale of the Communications
Group's interests in its joint ventures.
TECHNICAL APPROVAL OF TELEPHONY EQUIPMENT
Many of the Communications Group's proposed wireless local loop telephony
operations are dependent upon type approval of the Communications Group's
proposed wireless local loop telephony equipment by the communications
authorities in the markets where the Communications Group and its
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ventures plan to operate. While the Communications Group believes that such
equipment will be type approved, there is no assurance that this will occur and
the failure to obtain such type approvals could have a materially adverse effect
on many of the Communications Group's proposed telephony operations. In
addition, while the Communications Group believes that it will be able to
acquire sufficient amounts of wireless local loop telephony equipment from its
supplier on a timely basis, there can be no assurance that this will be the case
or that the Communications Group would be able to procure alternative equipment.
TECHNOLOGICAL OBSOLESCENCE
The communications industry has been characterized in recent years by rapid
and significant technological changes. New market entrants could introduce new
or enhanced technologies with features which would render the Communications
Group's technology obsolete or significantly less marketable. The ability of the
Communications Group to compete successfully will depend to a large extent on
its ability to respond quickly and adapt to technological changes and advances
in its industry. There can be no assurance that the Communications Group will be
able to keep pace, or will have the financial resources to keep pace, with the
technological demands of the marketplace.
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THE COMPANY
GENERAL
The Company is a global communications and media company engaged in the
development and operation of a variety of communications businesses, including
wireless cable television, AM/FM radio, paging, cellular telecommunications,
International toll calling and trunked mobile radio, in Eastern Europe, the
republics of the former Soviet Union, the PRC and other selected emerging
markets, through its Communications Group.
The Communications Group, which was founded in 1990 to take advantage of the
rapidly growing demand for modern communications services in Eastern Europe, the
republics of the former Soviet Union and other selected emerging markets,
launched its first operating system in 1992. At June 30, 1997, the
Communications Group owned interests in and participated with partners in the
management of joint ventures that had 42 operational systems, consisting of 9
wireless cable television systems, 14 AM/FM radio stations, 11 paging systems, 1
International toll calling service, 5 trunked mobile radio systems, 1 GSM
cellular telephone system and 1 joint venture that is building out an
operational GSM system and providing financing, technical assistance and
consulting services to the local system operator. In addition, the
Communications Group has interests in and participates with partners in the
management of joint ventures that, as of June 30, 1997, had 4 pre-operational
systems, consisting of 1 wireless cable television system, 1 cellular
telecommunications system, 1 company providing sales, financing and service for
wireless local loop telecommunications equipment and 1 company participating in
the construction and development of a local telephone network in the PRC for up
to 1 million lines, each of which the Communications Group believes will be
launched during 1997. The Company generally owns 50% or more of the joint
ventures in which it invests. The Company believes that the Communications Group
is poised for significant growth, as it continues to expand its existing
systems' subscriber base, construct and launch new systems in areas where it is
currently licensed and obtain new licenses in additional attractive markets. The
Company's objective is to establish the Communications Group as a major
multiple-market provider of modern communications services in Eastern Europe,
the republics of the former Soviet Union, the PRC and other selected emerging
markets.
RECENT DEVELOPMENTS
THE ENTERTAINMENT GROUP SALE. On July 10, 1997, the Company sold
substantially all of the assets of its entertainment group (the "Entertainment
Group"), consisting of Orion Pictures Corporation ("Orion"), Goldwyn
Entertainment Company ("Goldwyn") and Motion Picture Corporation of America
("MPCA") (and their respective subsidiaries) and a feature film and television
library of over 2,200 titles to P&F Acquisition Corp. ("P&F"), the parent
company of Metro-Goldwyn-Mayer Inc. ("MGM") for a gross consideration of $573.0
million (such transaction hereinafter referred to as the "Entertainment Group
Sale"). The Company used $296.4 million of the proceeds from the Entertainment
Group Sale to repay all amounts outstanding under the Entertainment Group's
credit facilities and certain other indebtedness of the Entertainment Group and
$140.0 million of such proceeds to repay all of its outstanding debentures. As a
result of the Entertainment Group Sale, the Company has narrowed its strategic
focus from operating two core businesses through the Communications Group and
the Entertainment Group to focusing primarily on the global communications and
media businesses of the Communications Group. The Entertainment Group's Landmark
Theatre Group ("Landmark"), which the Company believes is the largest exhibitor
of specialized motion pictures and art-house films in the United States with, at
June 30, 1997, 49 theaters and 139 screens, was not included in the
Entertainment Group Sale and the Company continues to own and operate Landmark
in order to maximize its value, which may include a sale of Landmark.
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PREFERRED STOCK SALE. On September 16, 1997, the Company sold 4,140,000
shares of its 7.25% convertible preferred stock (the "Preferred Stock") for
gross proceeds of $207 million. The shares of Preferred Stock are convertible at
any time at a conversion rate of 3.33 shares of common stock for each share of
Preferred Stock and redeemable on or after September 15, 2000 at a redemption
price that commences at $52.5375 and declines to $50.00 at September 15, 2007.
All dividends and redemption payments may be made in cash or stock or a
combination of both at the election of the Company.
OTHER INFORMATION
In addition to the Communications Group and Landmark, the Company also owns,
Snapper and an investment in RDM Sports Group, Inc. (formerly known as
Roadmaster Industries, Inc.) ("RDM"). Snapper and the investment in RDM were
owned by the Company prior to the November 1 Merger (as defined below). Snapper
manufactures Snapper(R) brand premium-priced power lawnmowers, lawn tractors,
garden tillers, snow throwers and related parts and accessories. RDM is a
sporting goods manufacturer of which the Company owns approximately 19.2 million
shares (approximately 39% of the outstanding shares of RDM common stock) and
warrants to acquire an additional 3.0 million shares (approximately 5%).
After November 1, 1995, the Company publicly announced that it was actively
exploring a sale of both Snapper and its investment in RDM, and, as a result,
for accounting purposes, both assets were classified as assets held for sale for
financial statement purposes. The results of operations for Snapper were not
consolidated with the Company's consolidated results of operations for the
period from November 1, 1995 through October 31, 1996. The Company has decided
not to continue to pursue its previously adopted plan to dispose of Snapper and
to actively manage Snapper to maximize its long-term value. Since November 1,
1996, the Company has included Snapper's operating results in the consolidated
results of operations of the Company.
In addition, as of April 1, 1997, for financial statement reporting purposes,
the Company no longer qualifies to treat its investment in RDM as a discontinued
operation and the Company has included in its results of operations the
Company's share of the earnings and losses of RDM. After August 15, 1997, RDM
announced that it was experiencing significant cash flow and other financial
difficulties. On August 28, 1997, an involuntary bankruptcy petition was filed
against a subsidiary of RDM in Federal bankruptcy court in Montgomery, Alabama
and on August 29, 1997, RDM filed a voluntary bankruptcy petition under Chapter
11 of the Bankruptcy Code. In connection with a refinancing of RDM's debt, the
Company caused the issuance of a $15 million letter of credit in favor of RDM's
lender group which may be drawn at any time by RDM's lender group.
USE OF PROCEEDS
The Company will not receive any proceeds from any sale of the Shares.
SELLING STOCKHOLDERS
The Selling Stockholders acquired their shares of Common Stock pursuant to
the Stock Plan. In connection with the Entertainment Group Sale, vesting of all
shares of Common Stock granted under the Plan was accelerated to 100% and all
restrictions on such Common Stock were terminated. The following table sets
forth, to the knowledge of the Company, the number of shares of Common Stock
granted to each Selling Stockholder under the Plan. To the knowledge of the
Company, each person has
14
<PAGE>
sole investment and voting power (or shares such powers with his or her spouse)
with respect to the shares set forth on the following table:
SHARES OF
SELLING STOCKHOLDER COMMON STOCK
Dean Shapiro 1,334
Joanna Rees-Jones 1,334
Todd Coe 667
R.J. Murillo 1,667
Jeremy Kramer 1,334
Dan Ethridge 667
Jodie Adair 1,001
Jeanette Draper 1,667
Brad Jenkel 83,389
Jeff Ivers 83,389
Bradley Thomas 50,044
Jed Weintrob 30,011
-------
TOTAL 256,504
PLAN OF DISTRIBUTION
The Shares may be sold from time to time by the Selling Stockholders, or by
pledgees, donees, transferees or other successors in interest. Such sales may be
made on the American or the Pacific Stock Exchange or such other national
securities exchange or automated interdealer quotation system on which shares of
Common Stock are then listed, through negotiated transactions or otherwise at
prices and at terms then prevailing or at prices related to the then current
market price or in negotiated transactions. The Shares may be sold pursuant to
one or more of the following: (a) ordinary brokerage transactions and
transactions in which the broker solicits purchasers; (b) purchases by an
underwriter, a broker or a dealer as principal and resale by such underwriter,
broker or dealer for its account pursuant to this Prospectus; (c) a block trade
in which the broker or dealer so engaged will attempt to sell the Shares as
agent but may position and resell a portion of the block as principal to
facilitate the transaction; (d) an exchange distribution in accordance with the
rules of such exchange; (e) through the writing of options on the Shares; and
(f) directly or through brokers or agents in private sales at negotiated prices.
If necessary, a supplemental prospectus which describes the method of sale in
greater detail may be filed by the Company with the Commission pursuant to Rule
424(c) under the Securities Act under certain circumstances. In effecting sales,
underwriters, brokers or dealers engaged by the Selling Stockholders and/or
purchasers of the Shares may arrange for other underwriters, brokers or dealers
to participate. Underwriters, brokers or dealers will receive commissions,
concessions or discounts from the Selling Stockholders and/or the purchasers of
the Shares in amounts to be negotiated prior to the sale. In
15
<PAGE>
addition, any Shares covered by this Prospectus which qualify for sale pursuant
to Rule 144 under the Securities Act may be sold under Rule 144 rather than
pursuant to this Prospectus.
The Company will bear all expenses in connection with the registration and
sale of the Shares, other than commissions, concessions or discounts to
underwriters, brokers or dealers and fees and expenses of counsel or other
advisors to the Selling Stockholders.
The Selling Stockholders and any underwriter, broker or dealer who acts in
connection with the sale of the Shares hereunder may be deemed to be
"underwriters" within the meaning of Section 2(11) of the Securities Act, and
any compensation received by them and any profit on any resale of the Shares as
principals might be deemed to be underwriting discounts and commissions under
the Securities Act.
LEGAL MATTERS
The validity of the Common Stock offered hereby will be passed upon for the
Company by Paul, Weiss, Rifkind, Wharton & Garrison, New York, New York.
EXPERTS
The consolidated financial statements and related schedules for the Company
as of December 31, 1996 and December 31, 1995 and for each of the years in the
two-year period ended December 31, 1996, and for the year ended February 28,
1995 and the financial statements for AAT as of December 31, 1996, and for the
period from January 22, 1996 (date of inception) to December 31, 1996, have been
incorporated by reference herein in reliance upon the reports of KPMG Peat
Marwick LLP, independent certified public accountants incorporated by reference
herein, and upon the authority of said firm as experts in accounting and
auditing.
The consolidated financial statements and related schedules of The Actava
Group Inc. appearing in The Actava Group Inc. Annual Report on Form 10-K for the
year ended December 31, 1994, as amended, have been audited by Ernst & Young
LLP, independent auditors, as set forth in their report thereon included therein
and incorporated herein by reference. Such consolidated financial statements and
related schedules are incorporated by reference in reliance upon such report
given upon the authority of such firm as experts in accounting and auditing.
The consolidated financial statements and related schedules of The Samuel
Goldwyn Company as of March 31, 1996 and 1995 and for the three years ended
March 31, 1996, appearing in The Samuel Goldwyn Company Annual Report on Form
10-K for the year ended March 31, 1996 have been incorporated herein in reliance
upon the report of Price Waterhouse LLP, independent public accountants,
included therein and upon the authority of such firm as experts in accounting
and auditing.
The report of Price Waterhouse LLP on the consolidated financial statements
of The Samuel Goldwyn Company as of March 31, 1996 and 1995 and for the three
years ended March 31, 1996 contains an explanatory paragraph stating that the
possibility that The Samuel Goldwyn Company's credit facility and loan terms may
not be extended beyond the June 28, 1996 maturity date raises substantial doubt
about its ability to continue as a going concern.
16
<PAGE>
================================================================================
No person has been authorized to give any information or to make any
representations other than those contained in this Prospectus, and, if given or
made, such information or representations must not be relied upon as having been
authorized. This Prospectus does not constitute an offer to sell or the
solicitation of an offer to buy any securities other than the securities to
which it relates or an offer to sell or the solicitation of an offer to buy such
securities in any circumstance in which such offer or solicitation is unlawful.
Neither the delivery of this Prospectus nor any sale made hereunder shall, under
any circumstances, create any implication that there has been no change in the
affairs of the Company since the date hereof or that the information contained
herein is correct at any time subsequent to its date.
------------------
TABLE OF CONTENTS
Page
Available Information ................................................. 2
Incorporated of Certain Documents
by Reference ........................................................ 2
Special Note Regarding
Forward-Looking Statements .......................................... 3
Risk Factors .......................................................... 5
The Company ........................................................... 13
Use of Proceeds ....................................................... 14
Selling Stockholders .................................................. 14
Plan of Distribution .................................................. 15
Legal Matters ......................................................... 16
Experts ............................................................... 16
================================================================================
256,504 SHARES
METROMEDIA INTERNATIONAL
GROUP, INC.
COMMON STOCK
(par value $1.00 per share)
PROSPECTUS
October 8, 1997
================================================================================
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The following table sets forth the expenses in connection with the offering
described in this Registration Statement. The Company has agreed to pay all of
the costs and expenses of this offering. All Selling Stockholders will pay their
own expenses, including expenses of their own counsel, broker or dealer fees,
discounts and expenses, and all transfer and other taxes on the sale of the
Shares. All fees other than the Securities and Exchange Commission (the
"Commission") registration fee are estimated.
Commission registration fee...................................... $ 2,309
Accountant's fees and expenses................................... 15,000
Legal fees and expenses.......................................... 10,000
Miscellaneous.................................................... 1,000
----------
Total......................................................... $ 28,309
==========
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Reference is made to the Company's Restated Certificate of Incorporation and
By-Laws and Section 145 of the Delaware General Corporation Law which, among
other things, and subject to certain conditions, authorize the Company to
indemnify its directors and officers against certain liabilities and expenses
incurred by such persons in connection with the claims made by reason of their
being such a director and officer.
ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
The exhibits listed below are filed as part of or incorporated by reference
in this Registration Statement. Where such filing is made by incorporation by
reference to a previously filed report, such report is identified in
parentheses. See Index of Exhibits included with the exhibits filed as part of
this Registration Statement.
II-1
<PAGE>
EXHIBIT
NO. DESCRIPTION
4.1 Restated Certificate of Incorporation of the Registrant (Exhibit 3(a) to
Registration Statement on Form S-3 (Registration No. 33-63853)).
4.2 Restated By-laws of the Registrant (Exhibit 3(b) to Registration
Statement on Form S-3 (Registration No. 33-63853)).
4.3 Option Agreement, dated April 19, 1994, between The Actava Group Inc.
and John D. Phillips (Exhibit 99(b) to Current Report on Form 8-K dated
April 19, 1994).
4.4 Registration Rights Agreement, dated April 19, 1994, among The Actava
Group Inc., Renaissance Partners and John D. Phillips (Exhibit 99(c) to
Current Report on Form 8-K dated April 19, 1994).
4.5* Metromedia International Group, Inc./Motion Picture Corporation of
America Restricted Stock Plan.
5.1* Opinion of Paul, Weiss, Rifkind, Wharton & Garrison regarding the
legality of the Shares.
23.1* Consent of KPMG Peat Marwick LLP.
23.2* Consent of Ernst & Young LLP.
23.3* Consent of Price Waterhouse LLP.
23.4* Consent of Paul, Weiss, Rifkind, Wharton & Garrison (included in the
opinion filed as Exhibit 5.1 hereto).
24* Power of Attorney (included on page II-5 of this Registration
Statement).
- --------------
* Filed herewith.
B. FINANCIAL STATEMENT SCHEDULES
Financial Statement Schedules have been omitted because they are not
applicable or not required or because the information has been incorporated by
reference.
ITEM 17. UNDERTAKINGS
The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made,
a post-effective amendment to this registration statement:
(i) to include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933, as amended (the "Act");
(ii)to reflect in the prospectus any facts or events arising after
the effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in the registration statement. Notwithstanding the foregoing, any
II-2
<PAGE>
increase or decrease in volume of securities offered (if the total
dollar value of securities offered would not exceed that which was
registered) and any deviation from the low or high end of the estimated
maximum offering range may be reflected in the form of prospectus filed
with the Commission pursuant to Rule 424(b) if, in the aggregate, the
changes in volume and price represent no more than a 20% change in the
maximum aggregate offering price set forth in the "Calculation of
Registration Fee" table in the effective registration statement;
(iii) to include any material information with respect to the plan of
distribution not previously disclosed in the registration statement or
any material change to such information on the registration statement;
PROVIDED, HOWEVER, that paragraphs (1)(i) and (1)(ii) do not apply if the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed by the Registrant pursuant
to Section 13 or Section 15(d) of the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), that are incorporated by reference in the
Registration Statement.
(2)That, for the purpose of determining any liability under the Act,
each such post-effective amendment shall be deemed to be a new registration
statement relating to the securities offered therein, and the offering of
such securities at that time shall be deemed to be the initial bona fide
offering thereof.
(3)To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Act, each filing of the Registrant's annual
report pursuant to section 13(a) or section 15(d) of the Exchange Act (and,
where applicable, each filing of an employee benefit plan's annual report
pursuant to section 15(d) of the Exchange Act) that is incorporated by reference
in the registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial BONA FIDE offering thereof.
Insofar as indemnification for liabilities arising under the Act may be
permitted to directors, officers and controlling persons of the Registrant
pursuant to the foregoing provisions, or otherwise, the Registrant has been
advised that in the opinion of the Commission such indemnification is against
public policy as expressed in the Act and is, therefore, unenforceable. In the
event that a claim for indemnification against such liabilities (other than the
payment by the Registrant of expenses incurred or paid by a director, officer or
controlling person of the Registrant in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or controlling person
in connection with the securities being registered, the Registrant will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the Act and
will be governed by the final adjudication of such issue.
II-3
<PAGE>
The Registrant hereby undertakes that:
(1) For purposes of determining any liability under the Act, the
information omitted from the form of prospectus filed as part of this
registration statement in reliance upon Rule 430A and contained in a form of
prospectus filed by the Registrant pursuant to Rule 424(b)(1) or (4) or 497(h)
under the Act shall be deemed to be part of this Registration Statement as of
the time it was declared effective.
(2) For the purpose of determining any liability under the Act, each
post-effective amendment that contains a form of prospectus shall be deemed to
be a new Registration Statement relating to the securities offered therein, and
the offering of such securities at that time shall be deemed to be the initial
BONA FIDE offering thereof.
II-4
<PAGE>
SIGNATURES
Pursuant to the requirements of the Act, the Registrant certifies that it
has reasonable grounds to believe that it meets all of the requirements for
filing on Form S-3 and has duly caused this Registration Statement to be signed
on its behalf by the undersigned, thereunto duly authorized, in the City of New
York, State of New York.
METROMEDIA INTERNATIONAL GROUP, INC.
By /s/ STUART SUBOTNICK
-------------------------------------
Stuart Subotnick
PRESIDENT AND CHIEF EXECUTIVE OFFICER
Date: October 7, 1997
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature to this
Registration Statement appears below hereby constitutes and appoints Silvia
Kessel, Arnold L. Wadler and Robert A. Maresca, such person's true and lawful
attorney-in-fact and agent with full power of substitution for such person and
in such person's name, place and stead, in any and all capacities, to sign and
to file with the Commission any and all amendments and post-effective amendments
to this Registration Statement, with exhibits thereto and other documents in
connection therewith, granting unto said attorney-in-fact and agent full power
and authority to do and perform each and every act and thing requisite and
necessary to be done in and about the premises, as fully to all intents and
purposes as such person might or could do in person, hereby ratifying and
confirming all that said attorney-in-fact and agent, or any substitute therefor,
may lawfully do or cause to be done by virtue thereof.
Pursuant to the requirements of the Act, this Registration Statement has
been signed by the following persons on behalf of the Registrant and in the
capacities indicated on the 7th day of October, 1997
SIGNTAURES TITLE
---------- -----
/s/ JOHN W. KLUGE
- --------------------------------
John W. Kluge Chairman of the Board
/s/ STUART SUBOTNICK
- -------------------------------- Vice Chairman of the Board, President and
Stuart Subotnick Chief Executive Officer and Director
(Principal Executive Officer)
/s/ SILVIA KESSEL
- -------------------------------- Senior Vice President, Chief Financial
Silvia Kessel Officer and Director (Principal
Financial Officer)
/s/ ARNOLD L. WADLER
- -------------------------------- Senior Vice President, General Counsel and
Arnold L. Wadler Director
/s/ ROBERT A. MARESCA
- -------------------------------- Senior Vice President (Principal
Robert A. Maresca Accounting Officer)
II-5
<PAGE>
/s/ JOHN P. IMLAY, JR.
- --------------------------------- Director
John P. Imlay, Jr.
/s/ CLARK A. JOHNSON
- --------------------------------- Director
Clark A. Johnson
/s/ CARL E. SANDERS
- --------------------------------- Director
Carl E. Sanders
/s/ RICHARD J. SHERWIN
- --------------------------------- Director
Richard J. Sherwin
/s/ LEONARD WHITE
- --------------------------------- Director
Leonard White
II-6
<PAGE>
INDEX OF EXHIBITS
EXHIBIT
NO. DESCRIPTION
4.1 Restated Certificate of Incorporation of the Registrant (Exhibit 3(a) to
Registration Statement on Form S-3 (Registration No. 33-63853)).
4.2 Restated By-laws of the Registrant (Exhibit 3(b) to Registration
Statement on Form S-3 (Registration No. 33-63853)).
4.3 Option Agreement, dated April 19, 1994, between The Actava Group Inc.
and John D. Phillips (Exhibit 99(b) to Current Report on Form 8-K dated
April 19, 1994).
4.4 Registration Rights Agreement, dated April 19, 1994, among The Actava
Group Inc., Renaissance Partners and John D. Phillips (Exhibit 99(c) to
Current Report on Form 8-K dated April 19, 1994).
4.5* Metromedia International Group, Inc./Motion Pictures Corporation of
America Restricted Stock Plan.
5.1* Opinion of Paul, Weiss, Rifkind, Wharton & Garrison regarding the
legality of the Shares.
23.1* Consent of KPMG Peat Marwick LLP.
23.2* Consent of Ernst & Young LLP.
23.3* Consent of Price Waterhouse LLP.
23.4* Consent of Paul, Weiss, Rifkind, Wharton & Garrison (included in the
opinion filed as Exhibit 5.1 hereto).
24* Power of Attorney (included on page II-5 of this Registration
Statement).
- --------------
* Filed herewith.
Exhibit 4.5
METROMEDIA INTERNATIONAL GROUP, INC./
MOTION PICTURE CORPORATION OF AMERICA
RESTRICTED STOCK PLAN
---------------------
ARTICLE 1.
PURPOSE
-------
The purpose of the Metromedia International Group, Inc./Motion Picture
Corporation of America Restricted Stock Plan (the "Plan") is to provide a means
through which Metromedia International Group, Inc. ("Metromedia"), a Delaware
corporation, may reward certain key employees of its Motion Picture Corporation
of America subsidiary, a Delaware corporation and wholly owned subsidiary of
Metromedia (the "Company"), upon whom rest the responsibilities of the
successful administration and management of the Company, and whose contributions
to the welfare of the Company are of importance.
ARTICLE 2.
DEFINITIONS
-----------
The following terms shall have the meanings described below when used in
the Plan.
A. "Award" or "Restricted Stock Award" shall refer to a restricted
stock award granted under the Plan.
B. "Common Stock" shall mean the Common Stock of Metromedia.
C. "Restricted Period" shall mean the period during which a
Restricted Stock Award is being earned, which unless otherwise provided herein,
shall be over the vesting period set forth in Article 3, Section B.
ARTICLE 3.
RESTRICTED STOCK AWARDS
-----------------------
A. GRANT OF AWARDS. Under the Plan, Awards shall be granted on the
"Adjustment Date" as such term is defined in the Agreement and Plan of Merger,
dated as of May 17, 1996, by and among Metromedia, MPCA Merger Corp., the
Company, Bradley R. Krevoy and Steven Stabler (the "Merger Agreement"). The
number of shares of Common Stock to be awarded on the Adjustment Date (the
"Award Shares") shall be equal to the quotient of $3,845,000 divided by the
Average Closing Price (as defined in the Merger Agreement). On the Adjustment
Date, the following key employees ("Participants") shall receive the following
Awards, expressed as a percentage of Award Shares. The number of Award Shares
granted shall be rounded to the nearest whole share:
<PAGE>
2
Restricted Stock
----------------
Employee Award
-------- -----
(expressed as percentage of total)
Dean Shapiro .52
Joanna Rees-Jones .52
Todd Coe .26
R. J. Murillo .65
Jeremy Kramer .52
Dan Ethridge .26
Jodie Adair .39
Jeanette Draper .65
Brad Jenkel 32.51
Jeff Ivers 32.51
Bradley Thomas 19.51
Jed Weintrob 11.70
-------
100.00%
In the event of the Participants are not employees of the Company on the
Adjustment Date for a reason other than those set forth in Article B, the
Restricted Stock Award shall be deemed granted and forfeited. In the event of
the forfeiture of any Restricted Stock Award, the shares of Common Stock subject
to such forfeited Award shall be divided 59.1406% to Bradley R. Krevoy and
40.8594% to Steven Stabler and delivered to them forthwith free of any
restrictions under the Plan.
B. VESTING. Unless otherwise provided herein, each Restricted Stock
Award shall vest over a three-year period from the date of grant as follows:
1 year from grant 33 1/3%
2 years from grant 66 2/3%
3 years from grant 100%
Notwithstanding the above vesting schedule, vesting shall be accelerated
to 100% and all restrictions on any Restricted Stock Award of a Participant
under the Plan shall terminate upon any of the following events:
(i) A demotion without cause in the Participant's Company job
title from the job title held by the Participant at the time of the grant of the
Award; or
(ii) 30 days after receipt of a notice to the Participant and
Metromedia accelerating the vesting and terminating any other restrictions,
which notice is signed by Steven Stabler and Bradley R. Krevoy in their sole and
absolute discretion, and while Steven Stabler and Bradley R. Krevoy are still
employed by the Company; or
(iii) Upon the termination of employment of Bradley R. Krevoy and
Steven Stabler from the Company; or
<PAGE>
3
(iv) Upon the satisfaction of such performance criteria, the
combination of time and performance or such other manner as Metromedia shall
determine; or
(v) Termination of employment by reason of death or disability.
C. RESTRICTIONS. A Restricted Stock Award may not be sold, assigned,
transferred, pledged, hypothecated or otherwise disposed of, except by will or
the laws of descent and distribution, until the Award shall have vested in
accordance with the vesting schedule or the vesting schedule shall have been
accelerated in accordance with Article III, Section B.
D. DEATH, DISABILITY AND TERMINATION OF EMPLOYMENT. Upon termination
of a Participant's employment prior to the end of the Restricted Period for any
reason, except for disability or death, the Participant's unvested portion of
the Award shall be forfeited, and the Participant shall have no right with
respect to such Award, and the shares of Common Stock subject thereto shall be
delivered to Krevoy and Stabler in accordance with Article 3, Section A.
Upon termination of a Participant's employment prior to the end
of the Restricted Period by reason of the Participant's disability or death,
vesting shall be accelerated to 100% and all restrictions on such Participant's
Award under the Plan shall terminate.
E. DELIVERY OF AWARDS.
(i) At the time of Award each Participant shall receive three
share certificates evidencing ownership of one-third of the shares of Common
Stock subject to the Award which share certificates shall bear the following
legend:
"These shares have been issued or transferred subject to a Restricted
Stock Award and are subject to substantial restrictions, including a
prohibition against transfer and a provision requiring transfer of these
shares without payment in the event of termination of employment of the
registered owner under certain circumstances all as more particularly
set forth in the Metromedia International Group, Inc./Motion Picture
Corporation of America Restricted Stock Plan dated July 2, 1996, a copy
of which is on file with the Company. Restrictions lapse effective
__________."
(ii) Subject to the provisions of subsection (iii) hereof, after
expiration or acceleration of the vesting schedule and completion of the
Restricted Period, such legended share certificates may be exchanged by the
Participant or, in the case of the death of the Participant, the Participant's
beneficiary, or if none, the person or persons to whom such Participant's rights
under the Award are transferred by will or the laws of descent and distribution
or by Krevoy or Stabler in accord with Article 3, Section A for share
certificates without the legend set forth in (i) above.
(iii) Delivery pursuant to this paragraph E shall be made in
shares of Common Stock except there may be paid in cash the value of any partial
shares of Common Stock and that part of the total payment determined by the
Company to be necessary to satisfy tax withholding requirements.
<PAGE>
4
F. UNREGISTERED SECURITIES. To the extent that any shares of Common
Stock which are the subject of an Award are not registered under the Securities
Act of 1933, such share certificates shall bear the following additional legend:
"The securities represented by this certificate have not been registered
under the Securities Act of 1933, as amended, and neither these
securities, nor any interest therein, may be sold, transferred, pledged
or hypothecated without (i) obtaining an opinion of counsel for this
company, at the expense of the holder hereof, that such sale, transfer,
pledge or hypothecation is exempt from the registration requirements of
the Securities Act of 1933, as amended, or (ii) there being in effect a
registration statement covering the offer and sale of these securities
in accordance with the Securities Act of 1933, as amended."
ARTICLE 4.
GENERAL PROVISIONS
------------------
A. DESIGNATION OF BENEFICIARY. Subject to adoption of reasonable
rules and regulations, each Participant who shall be granted an Award under the
Plan may designate a beneficiary or beneficiaries and may change such
designation from time to time by filing a written designation of beneficiaries
with Metromedia on a form to be prescribed by it, provided that no such
designation shall be effective unless so filed prior to the death of such
Participant.
B. NO RIGHT OF CONTINUED EMPLOYMENT. Neither the establishment of the
Plan, the granting of Awards, nor the payment of any benefits hereunder nor any
action of the Company or of the Board of Directors or Metromedia shall be held
or construed to confer upon any person any legal right to continue in the employ
of the Company or its subsidiaries, each of which expressly reserves the right
to discharge any employee whenever the interest of any such company in its sole
discretion may so require without liability to such company, except as to any
rights which may be expressly conferred upon such employee under the Plan.
C. REGISTRATION REQUIREMENT. If Metromedia determines at any time to
register any of its equity securities under the Securities Act of 1933 (or
similar statute then in effect), Metromedia, at its expense, will include among
the securities which it then registers all stock or securities issued in respect
thereof, in exchange therefor, or in replacement thereof.
D. NEW YORK LAW TO GOVERN. All questions pertaining to the
construction, regulation, validity and effect of the provisions of the Plan
shall be determined in accordance with the laws of the State of New York.
E. PAYMENTS AND TAX WITHHOLDING. Each Participant shall provide
Metromedia with a written undertaking for the payment of withholding taxes when
due. The delivery of any shares of Common Stock and the payment of any amount
with respect to fractional shares in respect of an Award shall not be made until
the recipient shall have made satisfactory arrangements for the payments of any
applicable withholding taxes.
<PAGE>
5
ARTICLE 5.
AMENDMENT AND TERMINATION
-------------------------
A. AMENDMENTS, SUSPENSION OR DISCONTINUANCE. The Board of Directors
of Metromedia may amend, suspend or discontinue the Plan provided, however, that
the Board of Directors of Metromedia may not, without the prior approval of the
stockholders of Metromedia, make any amendment for which stockholder approval is
necessary to comply with any applicable tax or regulatory requirement, including
for these purposes any approval requirement which is a prerequisite for
exemptive relief under Section 16(b) of the Exchange Act, and provided, further,
that no amendment may adversely affect the rights of any person in connection
with an Award previously granted.
Exhibit 5.1
[PAUL, WEISS, RIFKIND, WHARTON & GARRISON]
(212) 373-3000
(212) 757-3990
October 8, 1997
Metromedia International Group, Inc.
One Meadowlands Plaza
East Rutherford, New Jersey 07073-2137
Metromedia International Group, Inc.
Registration Statement on Form S-3
Registration No. 333-
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Ladies and Gentlemen:
In connection with the above-captioned Registration Statement (the
"Registration Statement"), filed with the Securities and Exchange Commission
pursuant to the Securities Act of 1933, as amended (the "Act"), and the Rules
and Regulations promulgated thereunder (the "Rules"), we have been requested by
Metromedia International Group, Inc., a Delaware corporation (the "Company"), to
furnish our opinion as to the legality of 556,504 shares of the Company's common
stock, par value $1.00 per share (the "Common Stock") (i) 300,000 shares (the
"Option Plan Shares") of which are being offered by John D. Phillips, the former
President and Chief Executive Officer of the Company and (ii) 256,504 shares
(the "Stock Plan Shares") of
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Metromedia International Group, Inc. 2
which are being offered by certain key employees of Motion Picture Corporation
of America, a former subsidiary of the Company (together with Mr. Phillips, the
"Selling Stockholders") registered for sale thereunder.
In connection with the furnishing of this opinion, we have reviewed
(i) the Registration Statement (including all amendments thereto), (ii) the
Option Agreement, dated as of April 19, 1994, between The Actava Group Inc. (now
known as the Company) and John D. Phillips (the "Option Agreement"), (iii) the
Metromedia International Group, Inc./Motion Picture Corporation of America
Restricted Stock Plan (the "Stock Plan"), (iv) originals, or copies certified or
otherwise identified to our satisfaction, of the Company's Restated Certificate
of Incorporation and Restated By-laws, each as in effect on the date hereof, and
(v) records of certain of the Company's corporate proceedings. We have also
examined and relied upon representations as to factual matters contained in
certificates of officers of the Company, and have made such other investigations
of fact and law and have examined and relied upon the originals, or copies
certified or otherwise identified to our satisfaction, of such documents,
records, certificates or other instruments, and upon such factual information
otherwise supplied to us, as in our judgment are necessary or appropriate to
render the opinion expressed below. We have assumed, without independent
investigation, that the Stock Plan Shares were issued in accordance with the
Stock Plan. In addition, we have assumed, without independent investigation, the
genuineness of all signatures, the authenticity of all documents submitted to us
as originals and the conformity of original documents to all documents submitted
to us as certified, photostatic, reproduced or conformed copies, the
authenticity of all such latter documents and the legal capacity of all
individuals who have executed any of the documents.
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Metromedia International Group, Inc. 3
Based upon the foregoing, we are of the opinion that (i) the Option
Plan Shares, when issued in accordance with the Option Agreement, will be duly
authorized, validly issued, fully paid and nonassessable and (ii) the Stock Plan
Shares are duly authorized, validly issued, fully paid and nonassessable.
Our opinion expressed above is limited to the General Corporation
Law of the State of Delaware. Please be advised that no member of this firm is
admitted to practice in the State of Delaware. Our opinion is rendered only with
respect to laws and the rules, regulations and orders thereunder, which are
currently in effect.
We hereby consent to use of this opinion as an Exhibit to the
Registration Statement and to the use of our name under the heading "Legal
Matters" contained in the Prospectus included in the Registration Statement. In
giving this consent, we do not thereby admit that we come within the category of
persons whose consent is required by the Act or the Rules.
Very truly yours,
PAUL, WEISS, RIFKIND, WHARTON & GARRISON
Exhibit 23.1
INDEPENDENT AUDITORS' CONSENT
The Board of Directors
Metromedia International Group, Inc.:
We consent to the use of our reports incorporated herein by reference and to the
reference to our firm under the heading "Experts" in the prospectuses.
KPMG Peat Marwick LLP
New York, New York
October 7, 1997
Exhibit 23.2
CONSENT OF INDEPENDENT AUDITORS
We consent to the reference to our firm under the caption "Experts" and to the
use of our reports dated March 10, 1995, with respect to the financial
statements and schedule of The Actava Group Inc. included in the Form 10-K of
the Actava Group, Inc. for the year ended December 31, 1994 as amended by
Amendment No. 1 on Form 10-K/A on April 28, 1995 and Amendment No. 2 on Form
10-K/A on July 13, 1995, incorporated by reference in the Registration Statement
(Form S-3) and related Prospectus of Metromedia International Group, Inc. for
the registration of 556,504 shares of $1.00 par value per share common stock.
/s/ Ernst & Young LLP
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Ernst &Young LLP
Atlanta, Georgia
October 7, 1997
Exhibit 23.3
CONSENT OF INDEPENDENT AUDITORS
We hereby consent to the incorporation by reference in the Prospectuses
constituting part of this Registration Statement on Form S-3 of Metromedia
International Group, Inc. of our report dated May 3, 1996 appearing on page F-2
of The Samuel Goldwyn Company's Annual Report on From 10-K for the year ended
March 31, 1996. We also consent to the incorporation by reference of our report
on the Financial Statement Schedule which appears on page F-21 of The Samuel
Goldwyn Company's Form 10-K. We also consent to the reference to us under the
heading "Experts" in such Prospectuses.
Price Waterhouse LLP
Century City, California
October 7, 1997
