FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report February 1, 2000
ANDERSEN GROUP, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 0-1460 06-0659863
(State or other jurisdiction Commission File
Number IRS Employer incorporation Identification No.
515 Madison Avenue, New York, NY 10022
(Address of principal executive offices) (Zip code)
(212) 826-8942
(Registrants telephone number, including area code)
Item 2. Acquisition or Disposition of Assets.
On January 25, 2000, the Board of Directors of Andersen Group, Inc. (the
Company) voted unanimously to invest up to $4 million in a private placement
of Treglos Investments Limited (Treglos), a company formed in Cyprus in which
the Company had an existing 50% equity interest prior to the private placement.
Prior to the private placement this equity interest and a $500,000 receivable
from Treglos had a net recorded value of approximately $84,000. At that time,
the primary asset of Treglos was a 6% equity interest in the Institute of
Automated Systems (IAS), a Moscow, Russia-based telecommunications company.
On February 1, 2000, the Company invested a total of $3 million in cash and
converted the $500,000 accounts receivable from Treglos into additional shares
of Treglos.
As a result of the Treglos private placement, the Company now directly owns
approximately 23% of the outstanding shares of Treglos, but has voting control
of Treglos until February 1, 2001 by virtue of irrevocable proxies signed by
substantially all the investors of Treglos.
Oliver R. Grace, Jr. and John S. Grace, both of whom are directors of the
Company, each had a direct or indirect ownership interest in Treglos of
approximately 22% prior to the private placement. They each indirectly made
additional investments in Treglos through the private placement. In addition,
Board members Francis E. Baker, James J. Pinto, Louis A. Lubrano and Peter N.
Bennett also directly or indirectly invested in the Treglos private placement,
as did Andrew M. OShea, the Companys Chief Financial Officer.
Concurrent with the private placement of its shares, Treglos entered into a
general agreement with Moskovskaya Telecommunikatsionnaya Corporatsiya
(COMCOR), a Moscow-based telecommunications company, to operate ZAO COMCOR-TV
(COMCOR-TV). COMCOR-TV will provide a wide range of telecommunications
services, including cable television, high speed internet access, and IP
telephony to individual subscribers and businesses throughout the Moscow region.
COMCOR-TV is fully licensed and authorized to provide cable TV, Internet and
other broadband services for approximately 1.5 million of the 3.4 million homes
in Moscow. It also has exclusive access for twenty years to an extensive
fiber-optic transportation network known as the Moscow Fiber Optic Network
(MFON), which is owned and operated by COMCOR. The MFON has approximately
3,000km (1,800 miles) of fiber optic cable and provision for more than 192
primary nodes. Currently, COMCOR-TVs service can be made available to
approximately 42,000 homes. Plans call for making COMCOR-TVs service available
to an additional 42,000 homes in the next twelve months, and 165,000 more homes
in the following twelve months.
Under the terms of the general agreement, Treglos portion of the initial
capitalization of COMCOR-TV includes its shares of IAS and $9 million in cash,
with COMCOR contributing licenses and shares of IAS. Treglos and COMCOR are each
committed to make future equity contributions totaling approximately $46 million
if certain operating performance measures are met. Such contributions may be
made in the form of cash, operating equipment or additional shares of IAS, as
specified in the general agreement. The Company is not committed to make
additional investments into Treglos or COMCOR-TV. If the Company does not make
additional investments in Treglos, its investment in Treglos would be diluted.
Under the terms of the agreement, Treglos and COMCOR are equal shareholders in
COMCOR-TV.
To create the liquidity required to make this investment, the Company sold
substantially all of its portfolio of common stocks of domestic savings banks.
Forward-Looking Statement
This report contains forward-looking statements
which reflect managements current expectations, assumptions and estimates of
future performance and economic conditions. Such statements are made in reliance
upon the safe harbor provisions of Section 27A of the Securities Act of 1933 and
Section 21E of the Securities Exchange Act of 1934. The Company cautions
investors that any forward-looking statements are subject to risks and
uncertainties which may cause actual results and future trends to differ
materially from those matters expressed in or implied by such forward-looking
statements. Such statements contain a number of risks and uncertainties,
including, but not limited to: (i) regulatory changes in the Russian Federation
that may affect the cable and telecommunications industries; (ii) changes in
economic and political conditions in Russia that could adversely affect the
level of demand for cable and telecommunications services; (iii) higher than
anticipated start-up costs associated with new business opportunities; (iv)
higher than anticipated employee levels, capital expenditures, and operating
expenses; (v) consumer acceptance of broadband services, including telephony and
data services; (vi) increases in fraudulent activity with respect to broadband
services; or (vii) delays in the development of anticipated technologies, or the
failure of such technologies to perform according to expectations.
Item 7. Financial Statements and Exhibits.
c) Exhibits.
99.1 - Form of Irrevocable Proxy
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
ANDERSEN GROUP, INC.
Date February 1, 2000 /s/ Andrew M. O Shea
Andrew M. O Shea
Chief Financial Officer
Exhibit 99.1
IRREVOCABLE PROXY
(To be signed by all members of Treglos Investments Limited)
The undersigned, being a member of Treglos Investments Limited (Treglos),
hereby appoints Andersen Group, Inc., a Delaware corporation, as its proxy to
vote on all matters requiring action by the members of Treglos. This proxy is
given in exchange for good and valuable consideration, is irrevocable, and shall
be deemed to be coupled with an interest.
This proxy shall expire on February 2, 2001.
This proxy shall be binding upon and shall inure to the benefit of the
respective heirs, executors, administrators, legal representatives, successors
and assigns of the undersigned.
IN WITNESS WHEREOF, the undersigned has executed this proxy as of the date
set forth below.
Date: ______________, ______
For Individual Members: For Members other than Individuals:
Signature (Please Type Name of Member)
By:
(Please Type Name) (Signature)
Signature of Co-Member (if any) (Please Type Name of Signatory)
Title:
Print Co-Members Name
