UNITED STATES
Securities and Exchange Commission
Washington, D.C. 20549
Form 8-K
Current Report
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
April 22, 1999
Date of Report (Date of earliest event reported)
SGI International
(Exact name of registrant as specified in its charter)
Utah 2-93124 33-0119035
State or other jurisdiction of (Commission IRS Employer
incorporation or organization File Number) Identification No.
1200 Prospect Street, Suite 325, La Jolla, California 92037
(Address of principal executive offices) (Zip Code)
619/551-1090
Registrants telephone number including area code
<PAGE>
Item 2. Acquisition or Disposition of Assets.
On April 22, 1999, SGI International (the "Company") executed an agreement with
Bluegrass Coal Development Company ("Bluegrass"), Wyoming Coal Technology, Inc.
and Americoal Development Company ("Americoal"), wholly owned subsidiaries of
AEI Resources ("AEI"), to purchase Bluegrass' 50% interest in the Liquids From
Coal ("LFC") Technology; the ENCOAL corporation, which owns the ENCOAL LFC
demonstration plant; certain existing permits necessary to build an LFC plant
near Gillette, Wyoming; and all other tangible and intangible LFC assets.
The consideration paid by the Company for the acquisition of the above described
assets consists of a $2 million dollar promissory note with interest thereon at
the prime rate due in five years, the waiver by Mitsubishi Heavy Industries
of a $1.13 million invoice due from Bluegrass and the assumption of obligations
attendant to ownership of the ENCOAL Corporation. The acquisition also calls
for a release of all claims between the parties and finalizes the dissolution
of the TEK-KOL Partnership. The total consideration to be paid was determined
through arms length negotiations between representatives of the Company and
AEI.
Neither the Company, AEI, nor any of their affiliates had, nor to the knowledge
of Company or AEI did any director or officer or any associate of any such
director or officer of Company, have, any material relationship with AEI prior
to the Sale.
The closing of the transaction is conditioned upon, among other things, the
financing of certain improvements to the ENCOAL plant, the completion of both
fuel supply and product sale agreements, the assumption or waiver of certain
bond obligations, the waiver Mitsubishi Heavy Industries of the $1.13 million
invoice due from Bluegrass and certain other conditions specified in the
agreement.
The assets to be acquired by the Company have been used to provide upgraded coal
and coal liquids to various utilities and industrial customers. The Company
intends to obtain financing from the upgrading of the facilities and to
use the assets to produce upgraded coal for sale to
utilities and produce coal liquids for sale to manufacturers and chemical
producers.
Item 7. Financial Statements and Exhibits.
(a) Financial statements of businesses acquired.
The financial statements required by this item will be filed at a later date by
an amendment to on this Form 8-K within 60 days after the date the initial
report was required.
(b) Pro forma financial information
The Pro forma financial statements required by this item will be filed at a
later date by an amendment on this Form 8-K within 60 days after the date the
initial report was required.
(c) Exhibits
EXHIBIT NO. DESCRIPTION
- ----------- -----------
2.1 Acquisition Agreement among SGI International, Bluegrass
Coal Development Company, and Wyoming Coal Technology, Inc.
* This exhibit is being, filed with the Securities and Exchange Commission
under a claim of confidentiality.
2
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchnage Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
SGI International
By /s/ Joseph A. Savoca
- ---------------------------
Joseph A. Savoca
Chairman/CEO
Dated: May 7, 1999
3
