SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (date of earliest event reported) SEPTEMBER 13, 1996
ANCHOR GLASS CONTAINER CORPORATION
(Exact name of registrant as specified in its charter)
DELAWARE 0-14770 22-2452609
(State or other jurisdiction of (Commission (IRS Employer
incorporation) File Number) ID Number)
ONE ANCHOR PLAZA, 4343 ANCHOR PLAZA PARKWAY, TAMPA, FL 33634
(Address of principal executive offices) (Zip Code)
Registrant's Telephone Number,
including area code: (813) 884-0000
NOT APPLICABLE
(Former name or former address, if changed since last report)
<PAGE>
Item 3. BANKRUPTCY OR RECEIVERSHIP.
On September 13, 1996, the Registrant filed for relief under Chapter 11
of Title 11 of the United States Code (the "Bankruptcy Code") by filing a
petition in the United States Bankruptcy Court for the District of Delaware (the
"Delaware Bankruptcy Court") (Case No. 96-1434). The Registrant will continue
its operations in the ordinary course of business as debtor-in-possession,
subject to the supervision and orders of the Delaware Bankruptcy Court.
Item 5. OTHER EVENTS.
On September 13, 1996, the Registrant entered into a letter of intent
(the "Letter of Intent") with Ball Foster Glass Container Co., L.L.C. ("Ball
Foster"), pursuant to which the Registrant would sell substantially all of its
assets to Ball Foster for a cash purchase price. As set forth in the Letter of
Intent, Ball Foster proposes to pay the Registrant at the closing $365 million
in cash adjusted as follows: (i) increased by the amount of the trade payables
existing on the Registrant's June 30, 1996 balance sheet, (ii) decreased by the
amount of post- filing trade payables existing on the closing date, (iii)
adjusted for changes in net tangible assets excluding pensions (net tangible
assets being defined as acquired assets less assumed liabilities, as mutually
agreed by the Registrant and Ball Foster), and (iv) adjusted for the change in
the funded status of the Registrant's pension plans between June 30, 1996 and
the closing date. The asset sale is subject to negotiation and execution of a
definitive asset sale agreement by and between the Registrant and Ball Foster,
to various other conditions set forth in the Letter of Intent attached as
Exhibit 99.2, and is subject to approval by the Delaware Bankruptcy Court as a
sale free and clear of liens.
Item 7. Financial Statements, Pro Forma Financial Information
AND EXHIBITS
(c) Exhibits.
99.1 Press Release dated September 13, 1996.
99.2 Letter of Intent dated September 13, 1996 by and
between the Registrant and Ball Foster.
<PAGE>
SIGNATURE
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 thereunto duly authorized.
ANCHOR GLASS CONTAINER CORPORATION
By: /S/ MARK A. KIRK
Mark A. Kirk
Senior Vice President and
Chief Financial Officer
Dated: September 16, 1996
<PAGE>
EXHIBIT INDEX
EXHIBIT DESCRIPTION
99.1 Press Release dated September 13, 1996.
99.2 Letter of Intent dated September 13, 1996 by and
between Anchor Glass Container Corporation and
Ball Foster Glass Container Co., L.L.C.
Exhibit 99.1
Contact: Mark Kirk Lewis Kruger
Anchor Glass Container Corp. Stroock & Stroock & Lavan
(813) 884-0000 (212) 806-5430
Wes Truesdell/Joe Dodson Allen Sangines-Krause
The Dilenschneider Group Goldman, Sachs & Co.
(212) 922-0900 (212) 902-7909
BALL-FOSTER AGREES TO PURCHASE ANCHOR GLASS
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ANCHOR FILES FOR CHAPTER 11 BANKRUPTCY PROTECTION
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FILING WILL ENABLE ANCHOR TO MAINTAIN OPERATIONS PENDING SALE
TAMPA, Fla., September 13, 1996 - Anchor Glass Container Corporation
announced today that Ball-Foster Glass Container Co., L.L.C., a producer of
glass containers based in Muncie, Indiana, has signed a non-binding letter of
intent to purchase the assets of the company for $365 million in cash, subject
to certain adjustments, plus the assumption of certain liabilities. In addition,
Anchor voluntarily filed for protection under Chapter 11 of the United States
Bankruptcy Code in order to ensure its continued operations through the closing
of the sale. The transaction is subject to certain conditions including the
execution of definitive agreements among Anchor, Ball-Foster and Vitro, S.A.
(BMV: Vitro, NYSE:VTO), Anchor's parent; the approval of the Bankruptcy Court,
and regulatory approvals.
Mark A. Kirk, Anchor's chief financial officer, noted that Bankruptcy Court
today entered an interim order approving debtor-in-possession (DIP) financing
obtained from Foothill Capital Corporation and Congress Financial Corporation,
which is subject to the entry of a final order after a hearing on notice to
creditors. This financing will support the company's expected liquidity needs
for operation through a prompt reorganization process, and consists of a $130
million line of credit. Anchor has also obtained the consent of its pre-petition
senior secured lending group and senior secured note holders to the DIP
financial and the use of cash collateral.
Anchor will promptly seek court approval of the sale of its assets.
However, it is likely that certain creditors, in particular unsecured creditors,
will receive substantially less than the face value of their claims against the
company.
James R. Malone, chairman of the board, said: "We believe the cooperative
relationships we have established with our customers, suppliers, employees,
lenders and creditors will enable us to continue operations as usual until we
can complete the sale." He added: "The sale to Ball- Foster assures the future
of the business. While the Chapter 11 filing was a difficult decision, it was a
necessary step to protect Anchor's ability to fulfill its commitments to
customers, suppliers and employees and put the company on a more stable
long-term footing. Ball- Foster's purchase of Anchor Glass will strengthen the
company to better serve our customers."
During the past 18 months, Anchor has taken significant steps to reduce
costs and upgrade its capital structure. Those moves, which came in response to
severe pricing pressures and weak U.S. demand for its core product line of glass
containers, included closing four manufacturing plants, and substantial
investments into manufacturing equipment to reduce costs and enhance
manufacturing efficiency. In addition, in January 1996 Anchor restructured its
debt with a $130 million revolving credit facility from Foothill Capital
Corporation and Congress Financial Corporation. In August, Vitro announced that
it had begun reviewing a number of strategic alternatives for Anchor, including
the sale of the company. In connection with that announcement, Anchor indicated
that the completion of such a sale would require restructuring its existing
indebtedness.
The Chapter 11 filing was made in the U.S. Bankruptcy Court in Wilmington,
Delaware.
Anchor Glass Container Corporation, headquartered in Tampa, Florida, is one
of the largest producers of glass bottles and jars in the United States.
<PAGE>
Exhibit 99.2
September 13, 1996
Board of Directors
Anchor Glass Container Corporation
c/o Stroock & Stroock & Lavan
Attention: Lewis Kruger
Gentlemen:
This letter of intent sets forth the intention of the parties hereto
with respect to the purchase by Ball-Foster Glass Container Co., L.L.C. (the
"Buyer") of the assets comprising the business of Anchor Glass Container
Corporation (the "Seller") on the terms set forth below.
PURCHASE PRICE: POST-CLOSING ADJUSTMENT. Buyer will pay to Seller at
the closing $365 million in cash, adjusted as follows: (i) increased by the
amount of the trade payables existing on the June 30, 1996 balance sheet, (ii)
decreased by the amount of post-filing trade payables existing on the closing
date (which shall be assumed by Buyer), (iii) adjusted for changes in net
tangible assets excluding pensions (net tangible assets being defined as
acquired assets less assumed liabilities, as mutually agreed by Buyer and
Seller), and (iv) adjusted for the change in the funded status of Seller's
pension plans between June 30, 1996 and the closing date. The funded status of
Seller's pension plans is defined as the Projected Benefit Obligation less the
plan assets at the then current fair value. For the purposes of the foregoing
adjustment only, trade payables shall not be treated as assumed liabilities for
the closing balance sheet.
ASSETS ACQUIRED AND LIABILITIES ASSUMED. Buyer will acquire all of the
assets of Seller, other than cash and cash equivalents, certain insurance
policies, and certain non- tangible assets. Buyer will assume the following
liabilities of Seller: (i) liabilities associated with Seller's pension plans;
(ii) accrued expenses including liabilities relating to workers compensation
claims, accrued payroll, vacation and related employee benefits; (iii)
environmental liabilities; (iv) trade payables that have arisen after the
Bankruptcy Filing Date and that are on the balance sheet at the closing date;
and (v) certain other liabilities which will be included on the June 30, 1996
and closing balance sheets. Buyer will assume no other liabilities.
CONDITIONS. The acquisition will be subject to the following
conditions: (i) termination or expiration of the waiting period under the
Hart-Scott-Rodino Antitrust Improvements Act; (ii) execution of an agreement
between Buyer and Vitro, S.A. with respect to certain matters relating to the
transaction; (iii) confirmation that Anchor's supply agreements with Coors and
Strohs will not be terminated or materially altered as a result of the
transaction; (iv) due diligence review satisfactory to Buyer relating to the
joint venture agreement with Coors; (v) the consent of Owens-Brockway Glass
Container Inc. on terms satisfactory to Buyer to the continued use in Anchor's
plants of Owens equipment as it existed at the closing and the early termination
of the Technical Assistance License Agreement, or the entry by the Bankruptcy
Court of an order to similar effect; (vi) Buyer shall have received satisfactory
title insurance policies and surveys for each of the real properties owned by
Seller, at Buyer's expense, and each of the real property leases shall have been
assigned to Buyer by a final order of the Bankruptcy Court; (vii) the provisions
of the collective bargaining agreements covering employees of Seller relating to
work rule changes negotiated in connection with wage concessions made during the
last collective bargaining negotiations shall have been amended on terms
satisfactory to Buyer; (viii) as of the closing, there shall be no material
environmental liabilities that were not disclosed as of the date of signing of a
definitive Asset Purchase Agreement; (ix) there shall have been no material
adverse change in the conditions of the properties, plant or equipment being
transferred; (x) standard conditions relating to the accuracy of
representations, receipt of necessary governmental approvals, if any, the
fulfillment of covenants, no order or regulation enjoining or materially
interfering with the consummation of the transaction or operation of the
business, and no pending governmental proceedings; (xi) as soon as practicable,
but in no event later than three business days after execution of the Asset
Purchase Agreement, the Bankruptcy Court shall have entered an order: (1)
scheduling either a hearing on notice procedures or a hearing for approval of
the Agreement and sale under Section 363 of the Bankruptcy Code (the "Sale
Hearing") of substantially all assets free and clear of all non- assumed
liabilities, and Assignment and Assumption of Assumed Executory Contracts, the
Sale Hearing to take place no later than November 15, 1996; and (2) approving
terms for submissions of competing offers, overbid procedures and a $10 million
breakup fee; (xii) the entry of an order approving the Agreement and sale under
Section 363 and no stay having been issued within the time period allowed for
appeal from such order.
TERMINATION. The Agreement may be terminated by Buyer or Seller if the
transactions has not closed by December 31, 1996; by Buyer if the conditions set
forth in clause (xi) above have not been satisfied by the date set forth
therein; by Buyer if any governmental authority shall have commenced litigation
seeking to enjoin consummation of the transaction; or by Buyer or Seller if the
consummation of the transaction would be illegal.
DEFINITIVE AGREEMENT. The transaction is subject to execution of a
mutually satisfactory Asset Purchase Agreement which shall contain
representations and warranties, covenants and conditions customary for a
transaction of this type, including the conditions set forth above. The
representations and warranties shall not survive the closing.
POST-CLOSING ADJUSTMENT PROCESS. Following the closing, Buyer shall
prepare a closing balance sheet containing the items mutually agreed to by the
parties. Seller shall thereafter have an opportunity to review and dispute the
closing balance sheet. Any dispute over the closing balance sheet that cannot be
resolved by the parties shall be submitted to arbitration by an independent
account firm satisfactory to Buyer and Seller.
NON-BINDING AGREEMENT. It is understood that this letter is an
expression of the intent of the parties only, and nothing herein shall create
any legally binding obligation by the parties hereto. No obligations shall arise
unless and until mutually satisfactory definitive documentation shall have been
entered into by the parties. Neither party hereto shall have any liability to
the other party as a result of the failure of the parties to agree upon the
definitive terms of the transaction described herein. We trust that you will
keep the existence and the terms of this letter confidential and will not share
this letter with anyone other than senior management and your advisors on a
confidential basis, unless and until this letter has been countersigned as
provided below.
If the foregoing is acceptable to you, please so indicate by signing
the enclosed copy of this letter and returning it to the undersigned by no later
than 9:00 a.m. today.
Very truly yours,
BALL-FOSTER GLASS CONTAINER
CO., L.L.C.
By: /S/ J. STEVEN RHEA
Name: J. Steven Rhea
Title: Sr. VP Business Dev &
Nat'l Mkt
Agreed and Accepted:
ANCHOR GLASS CONTAINER
CORPORATION
By: /S/ JAMES R. MALONE
Name: James R. Malone
Title: Chairman of the Board
