<PAGE>
As filed with the Securities and Exchange Commission on May 9, 1995
Registration No. 33-_______
SECURITIES AND EXCHANGE COMMISSION
FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
HONDO OIL & GAS COMPANY
(Exact name of registrant as specified in its charter)
DELAWARE
(State or other jurisdiction of incorporation or organization)
95-1998768
(I.R.S. Employer Identification No.)
410 East College Boulevard
Roswell, New Mexico 88201
(505) 625-8700
(Address, including zip code, and telephone number, including
area code, of registrant's principal executive offices)
C. B. McDaniel
Secretary and Counsel
Hondo Oil & Gas Company
410 East College Boulevard
Roswell, New Mexico 88201
(505) 625-8700
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
Copy to:
Richard A. Rubin, Esq.
Parker Chapin Flattau & Klimpl, LLP
1211 Avenue of the Americas
New York, New York 10036
(212) 704-6000
Approximate date of commencement of proposed sale to the public: from
time to time after the effective date of this Registration Statement as
determined by market conditions.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the
following box. [ ]
If any of the securities being 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 dividends or interest reinvestment plans, check the following box.
[x]
CALCULATION OF REGISTRATION FEE
Title of each Amount Proposed Proposed Amount of
class of to be maximum maximum regis-
securities to registered offering aggregate tration
be registered price offering fee
per unit price
_____________ __________ ________ _____________ _________
Common Stock, 189,080 $12.5625 (1) $2,375,317.50 (1) $819.08
$1 par value
(1) For purposes only of calculating the registration fee under Rule
457(c), the proposed maximum offering price per unit and the proposed
maximum aggregate offering price are based upon the average of the high
($12.75) and low ($12.375) prices reported by the American Stock
Exchange on May 5, 1995.
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 OF THE SECURITIES ACT OF 1933 OR UNTIL THE
REGISTRATION STATEMENT SHALL BECOME EFFECTIVE ON SUCH DATE AS THE
COMMISSION ACTING PURSUANT TO SAID SECTION 8 MAY DETERMINE.
SUBJECT TO COMPLETION, DATED May 9, 1995
PROSPECTUS
HONDO OIL & GAS COMPANY
189,080 SHARES OF COMMON STOCK, $1.00 PAR VALUE
_____________________
The 189,080 shares (the "Shares") of common stock, $1.00 par
value, ("Common Stock") of Hondo Oil & Gas Company (the "Company")
offered by this Prospectus are being offered for the account of Lonrho
Plc and Thamesedge Ltd. (the "Selling Shareholders") by the Selling
Shareholders. The Company will not receive any proceeds from this
offering. See "Selling Shareholders" below.
SEE "CERTAIN INVESTMENT CONSIDERATIONS" FOR A DISCUSSION OF CERTAIN
FACTORS THAT SHOULD BE CONSIDERED BY THE PROSPECTIVE INVESTOR.
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 Shares may be sold from time to time in one or more
transactions on the American Stock Exchange, in the over-the-counter
market, in negotiated transactions, or a combination of such methods of
sale, or otherwise, at market prices prevailing at the time of sale, at
prices related to such prevailing market prices or at negotiated prices
including (a) through ordinary brokerage transactions in which the
broker solicits purchases, (b) sales to one or more brokers or dealers
as principal, and the resale by such brokers or dealers for their
account pursuant to this Prospectus, including resales to other brokers
and dealers, (c) block trades 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 in order to facilitate the transaction
or (d) negotiated transactions with purchasers with or without a broker
or dealer. On May 5, 1995, the last reported sales price of the Common
Stock of the Company on the American Stock Exchange was $12.50 per
share.
_____________________
The date of this Prospectus is _______, 1995.
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TABLE OF CONTENTS
Page
Available Information 3
Documents Incorporated By Reference 3
The Company 4
Certain Investment Considerations 4
Selling Shareholders 6
Plan of Distribution 11
Experts 12
Legal Matters 12
No dealer, salesperson or other person has been authorized to give any
information or to make any representations other than those contained in
this Prospectus in connection with the offer contained in this
Prospectus, and, if given or made, such information or representations
must not be relied upon as having been authorized by the Company,
Selling Shareholders or any underwriter. This Prospectus does not
constitute an offer to sell, or a solicitation of an offer to buy, any
securities other than the Shares or an offer to sell, or a solicitation
of an offer to buy, Shares in any jurisdiction in which, or to any
person to whom, such offer or solicitation would be unlawful. Neither
the delivery of this Prospectus nor any sale made hereunder shall, under
any circumstances, create an implication that there has been no change
in the affairs of the Company since the date hereof or that information
herein is correct as of any time subsequent to its date.
2
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the
Securities Exchange Act of 1934 (the "Exchange Act") and in accordance
therewith files reports and other information with the Securities and
Exchange Commission (the "Commission"). Reports, proxy statements,
information statements and other information filed by the Company can be
inspected and copied at the public reference facilities maintained by
the Commission at 450 Fifth Street, N.W., Room 1024, Washington, D.C.
20549, and at the following Regional Offices of the Commission: 7 World
Trade Center, 13th Floor, New York, New York 10048 and Northwestern
Atrium Center, Suite 1400, 500 West Madison Street, Chicago, Illinois
60661. Copies of such material can be obtained from the Public
Reference Section of the Commission, Room 1024, 450 Fifth Street, N.W.,
Washington, D.C. 20549, at prescribed rates. The Common Stock is listed
on the American Stock Exchange; reports, proxy statements, information
statements and other information filed by the Company with the American
Stock Exchange can be inspected at the offices of the American Stock
Exchange at 86 Trinity Place, New York, New York 10006.
This Prospectus does not contain all the information set forth in the
Registration Statement (No. 33-_____) on Form S-3 (the "Registration
Statement") of which this Prospectus is a part, including exhibits
thereto, which has been filed with the Commission in Washington, D.C.
Copies of the Registration Statement and the exhibits thereto may be
obtained, upon payment of the fee prescribed by the Commission, or may
be examined without charge, at the office of the Commission.
DOCUMENTS INCORPORATED BY REFERENCE
The following documents filed by the Company (File No. 1-8979) with
the Commission pursuant to the Exchange Act are incorporated in this
Prospectus by reference:
1. The Company's Annual Report on Form 10-K for the fiscal year ended
September 30, 1994.
2. The Company's Quarterly Reports on Form 10-Q for the quarters ended
December 31, 1994 and March 31, 1995.
2. The Company's Current Reports on Form 8-K dated November 29, 1994
and March 3, 1995.
3. The description of the Common Stock contained in the Company's
Registration Statement on Form 8-A dated September 3, 1985, including
any amendment or report filed by the Company for the purpose of updating
such description.(1)
____________________
(1) In 1988, the Company increased its number of authorized shares of
Common Stock to 30,000,000.
All documents subsequently filed by the Company pursuant to Sections
13(a), 13(c), 14 or 15(d) of the Exchange Act, prior to termination of
this offering, shall be deemed to be incorporated by reference into this
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Prospectus and to be a part hereof from the date of filing of such
document. Any statement contained in a document incorporated or deemed
to be incorporated by reference herein shall be deemed to be modified or
superseded for the purposes of this Prospectus to the extent that a
statement contained herein or in any other subsequently filed document
which also is incorporated by reference herein modifies or supersedes
such statement. Any statement so modified or superseded shall not be
deemed, except as so modified or superseded, to constitute a part of
this Prospectus.
The Company will provide without charge to each person, including any
beneficial owner, to whom this Prospectus is delivered, upon written or
oral request of such person, a copy of any and all documents
incorporated by reference in this Prospectus (not including exhibits
unless such exhibits are specifically incorporated by reference).
Requests for such information should be directed to C. B. McDaniel,
Secretary and Counsel, Hondo Oil & Gas Company, 410 East College
Boulevard, Roswell, New Mexico 88201, telephone (505) 625-8700.
THE COMPANY
The Company, a Delaware corporation organized in 1958, is an
independent oil and gas company presently focusing on international oil
and gas exploration and development. The Company's principal asset is
an interest in an exploration concession in Colombia. For a more
detailed description of the business of the Company, including audited
and unaudited financial information, see the documents referred to in
"Documents Incorporated by Reference." The Company's principal
executive offices are located at 410 East College Boulevard, Roswell,
New Mexico 88201, telephone (505) 625-8700.
CERTAIN INVESTMENT CONSIDERATIONS
The following factors, should be considered carefully by prospective
investors in the Common Stock offered hereby.
SUBSTANTIAL RELIANCE ON SINGLE INVESTMENT. The Company's success
currently is substantially dependent on its investment in the Opon
project in Colombia, South America. The Company has no significant
operating assets which are presently generating cash to fund its
operating and capital requirements. At March 31, 1995 the Company had a
deficiency in net assets of $70,096,000.
In September 1994, the Company announced the discovery of potentially
significant reserves of natural gas and condensate in an exploratory
well recently drilled on the Opon Association Contract area in Colombia.
See the Company's Annual Report on Form 10-K for the year ended
September 30, 1994. No definitive assessment of the size of the
hydrocarbon resources associated with the discovery can be made as of
the date of this Prospectus.
The Company's management believes that its Opon project has
significant potential to be developed in conjunction with Colombia's
planned natural gas transmission network and that the Company's future
revenues will be derived from this source as well as oil production from
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the Opon project. However, there can be no assurance that the Opon
project will be successfully developed or that alternative sources of
funds will become available in the future.
ROLE OF ECOPETROL. Empresa Colombiana de Petroleos ("Ecopetrol") is a
quasi-governmental corporate organization wholly-owned by the Colombian
government. Ecopetrol may become a participant in the Opon Contract
after commercial production is established. See the Company's Annual
Report on Form 10-K for the year ended September 30, 1994. Ecopetrol
also owns and operates the refinery at Barrancabermeja that is a
possible market for natural gas from the Opon project if and when
production is established. Export of natural gas from the Opon project
is not considered economically feasible at this time. At present, the
price of natural gas is set by law enacted by the legislature of
Colombia in 1983. The regulated price of natural gas could be changed
in the future by action of the legislature. The participation of
Ecopetrol, a government-owned company, in the Opon project as a
participant and as a potential purchaser, and the power of the
government of Colombia to set the price of natural gas creates the
potential for a conflict of interest in Ecopetrol and/or the government.
If such a conflict of interest materializes, the economic value of the
Company's interest in the Opon project could be diminished. The
Company's management believes that the risk of an adverse effect upon
the Company from a conflict of interest in Ecopetrol and/or the
government is remote; however, no assurances can be given, and no
prediction can be made, concerning a possible adverse effect on the
Company from a conflict of interest as described in this paragraph.
FOREIGN OPERATIONS. Operations in the Opon project are subject to the
risks inherent in foreign operations, including expropriation,
nationalization, war and insurrection, and other political risks.
Generating revenue from the sale of hydrocarbons will depend, to a
certain extent, on the Colombian government continuing its present
policy of expansion of existing, and development of new, natural gas
markets, infrastructure, and transmission systems. There can be no
assurance that the Colombian government will take these steps or that it
will not impose regulatory burdens or restrictions that could adversely
affect the development of the Opon project. In the past, guerilla
activity in Colombia has disrupted the operation of oil and gas
projects, including site preparation at the Opon Contract area during
fiscal 1991. Since that time, security in the area has been
significantly enhanced and the Company has taken steps to improve its
relations with the local community. While the Company does not expect
that future guerilla activity will have a material impact on the
exploration and development of the Opon project, there can be no
assurance that such activity will not occur or that such activity would
not adversely affect the operations of the Opon project.
RISKS OF OIL AND GAS EXPLORATION. Operations in the Opon project are
subject to the operating risks normally associated with the exploration
for and production of oil and gas, including fires, blowouts, other
natural catastrophes and problems associated with environmental and
pollution control. In addition, there are greater than normal
mechanical drilling risks at the Opon Contract area associated with high
pressures in the La Paz and other formations. These pressures may cause
5
collapse of the well bore, impede the drill string while drilling, or
cause difficulty in completing a well with casing and cement. These
potential problems were overcome in the drilling of the Opon No. 3 well
by the use of a top-drive drilling rig, heavy-weight drilling fluids and
other technical drilling enhancements. As additional wells are drilled
and additional data and experience are obtained, the mechanical risks
should be reduced.
LIMITED CAPITAL. The Company has no source of current income from its
operations. The Company's principal remaining assets, its investment in
the Opon project and its California real estate, do not currently
provide any income and require additional capital for exploitation. For
a more detailed discussion, see the Company's Annual Report on Form 10-K
for the year ended September 30, 1994 and the documents referred to in
"Documents Incorporated by Reference." The Company will not receive any
proceeds from this offering.
LOSSES FROM OPERATIONS. The Company experienced losses of
$56,758,000, $23,844,000 and $11,056,000 for the years ended September
30, 1992, 1993 and 1994, respectively. As discussed above under Limited
Capital, because the Company's principal remaining assets do not
currently provide any income and require additional capital for
exploitation, the Company anticipates continued losses for the
foreseeable future.
CONTINUATION OF AMERICAN STOCK EXCHANGE LISTING. Because of losses in
prior years and negative shareholders' equity, the Company does not
fully meet all of the guidelines of the American Stock Exchange for
continued listing of its shares. The Company's management is taking
steps to improve the Company's ability to meet the Exchange's guidelines
and preserve the listing. However, no assurances can be given that the
Company's shares will remain listed on the Exchange in the future.
EFFECT ON COMMON STOCK PRICE. Sales or potential sales of the Shares
and other shares registered by the Company for the account of The Hondo
Company and Lonrho Plc as pledgee (see "Selling Shareholders," below)
may have an adverse effect on the market price for the Company's Common
Stock. The Company cannot predict what effect sales of the Shares or
other shares registered may have on the market.
SELLING SHAREHOLDERS
The Shares to be offered by this Prospectus (the "Shares") are being
offered for the account of Lonrho Plc and Thamesedge Ltd. Thamesedge
Ltd. is a wholly-owned subsidiary of Lonrho Plc. The Shares constitute
shares of Common Stock of the Company that have been issued in payment
of interest under certain loan agreements among the Company and certain
of its subsidiaries and Lonrho Plc. and Thamesedge Ltd.
On November 30, 1988, Thamesedge Ltd., purchased a $75,000,000, 13.5%
Senior Note, due in 1998, from the Company in a private placement. The
Company repaid $44,500,000 of this loan by September 30, 1992 using
proceeds from asset sales as required by the loan agreement.
6
During calendar 1991, Lonrho Plc entered into loan agreements with the
Company pursuant to which, as amended to date, the Company has borrowed
an aggregate of $32,000,000 from Lonrho Plc. At the time the loans were
made, the interest rate thereon was similar to that in the Company's
former working capital loan with a bank for its refining and marketing
operations.
On December 18, 1992, Thamesedge Ltd. and Lonrho Plc agreed to defer
interest and certain principal payments. As consideration for the
deferral of interest and principal payments, on December 18, 1992, the
Company granted Lonrho Plc a 5% share of the Company's net profits, as
defined, under the Opon Contract. Following the final payment of such
indebtedness, Lonrho Plc's share of such net profits will be decreased
by one-half.
On April 30, 1993, Lonrho Plc loaned to the Company $3,000,000 and on
June 25, 1993, Lonrho Plc loaned the Company an additional $4,000,000.
As security for these loans the Company and its subsidiaries granted
mortgages on certain real property to Lonrho Plc. The interest rates
for these loans were the same as that for other loans from Lonrho Plc.
On December 17, 1993, Thamesedge Ltd. and Lonrho Plc agreed to add
interest accrued at September 30, 1993 to principal and reduce the
annual interest rate on each of the foregoing loans to the Company to 6%
effective September 30, 1993 and defer principal payments on the loans.
Lonrho Plc and the Company further agreed that, if the Company does not
have sufficient cash resources to pay interest on any of the foregoing
indebtedness of the Company when due, the Company may offer to pay such
interest in shares of its Common Stock valued at their market price on
the day the interest is due. Thereupon Lonrho Plc may either accept
such offer or add the amount of interest then due to the remaining
outstanding principal balance of the applicable obligation. From
September 30, 1993 through March 31, 1995, interest of approximately
$10,609,000 has been added to principal of debts to Thamesedge Ltd. and
Lonrho Plc.
On October 18, 1994, the Company paid to Lonrho Plc $5,000,000 to
repay a portion of the loans made in calendar 1991. At the same time,
Lonrho Plc provided a $5,000,000 loan facility to the Company. On
November 10, 1994, Thamesedge Ltd. and Lonrho Plc agreed to extend the
maturities of all of the above debts to not earlier than October 1,
1996.
As provided in the agreement dated December 17, 1993, on March 15,
1995, Lonrho Plc and Thamesedge Ltd. accepted the Company's offer to pay
the interest due April 1,1995 on the indebtedness in shares of the
Company's Common Stock. On April 3, 1995, the Company issued 99,113
shares, and 89,967 shares, respectively, of its Common Stock to Lonrho
Plc and Thamesedge Ltd. The Company is obligated by these agreements to
register with the Commission the resale of the shares received by Lonrho
Plc and Thamesedge Ltd. as payment for the interest on the indebtedness.
The Selling Shareholders have relied on the terms of these agreements in
requesting the registration of the Shares.
7
The following table sets forth certain information for each Selling
Shareholder with respect to (i) such Selling Shareholder's beneficial
ownership of the Company's Common Stock prior to the offering of any
Shares hereunder and prior to the offering of shares of Common Stock
that may be offered under another Registration Statement (No. 33-52496)
filed by the Company with the Commission, (ii) the number of Shares that
may be offered for sale hereunder, (iii) the number of shares of the
Company's Common Stock that such Selling Shareholder may offer under
such other Registration Statement, and (iv) the number of shares of the
Company's Common Stock to be beneficially owned by such Selling
Shareholder after the offerings referred to in (ii) and (iii). Under
the Commission's rules, several persons may be deemed beneficial owners
of the same shares. As a result, readers are urged to read the
footnotes to the following table and the discussion following the table
and footnotes.
Lonrho Plc Thamesedge Ltd.
__________ _______________
Shares of Common Stock 10,339,280(1) 89,967
Beneficially Owned
Prior to Offering
Shares of Common Stock 189,080(2) 89,967
to be Offered Hereunder
Shares of Common Stock 3,609,200(3) 0
to be Offered Under
Another Registration
Statement
Shares of Common Stock 6,541,000(4) 0
Beneficially Owned
After Offerings
________________
(1) Includes (a) the Shares (as reflected in footnote (2)) and (b)
10,150,200 shares owned of record by The Hondo Company, but
subject to a pledge to Lonrho Plc. See footnotes (3) and (4),
below, and the discussion regarding The Hondo Company that
follows these footnotes.
(2) Includes the 89,967 shares that are owned by Thamesedge Ltd., a
wholly-owned subsidiary of Lonrho Plc.
(3) The Company filed a separate Registration Statement on Form S-3
on behalf of The Hondo Company and Lonrho Plc, as pledgee,
covering 3,609,200 of the 10,150,200 shares owned of record by
The Hondo Company. See the discussion regarding The Hondo
Company that follows these footnotes.
(4) Owned of record by The Hondo Company and subject to a pledge to
Lonrho Plc. Based upon the number of shares of the Company's
Common Stock issued and outstanding at the date of this
Prospectus, 49.4%. See the discussion regarding The Hondo
Company that follows these footnotes.
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THE FOLLOWING DISCUSSION RELATES TO THE 10,150,200 SHARES OF COMMON
STOCK OF THE COMPANY OWNED OF RECORD BY THE HONDO COMPANY. SUCH
DISCUSSION DOES NOT RELATE TO THE SHARES OFFERED BY THIS PROSPECTUS,
NONE OF WHICH ARE OWNED BY THE HONDO COMPANY.
The shareholders of The Hondo Company, and their approximate
respective percentages of ownership of The Hondo Company as of May 9,
1995 are set forth below:
Robert O. Anderson . . . . . . . . .39.990%
W. Phelps Anderson . . . . . . . . . 5.005%
Robert B. Anderson . . . . . . . . . 5.005%
Lonrho, Inc. . . . . . . . . . . . .50.000%
Due to their shareholdings in The Hondo Company and a Shareholders'
Agreement related to their rights to vote and dispose of their
shareholdings in The Hondo Company, Robert O. Anderson, Robert B.
Anderson, W. Phelps Anderson and Lonrho, Inc. may be deemed to have
shared voting and investment power as to the 10,150,200 shares of Common
Stock owned directly by The Hondo Company (subject to the rights of
Lonrho Plc as pledgee and the litigation described below). Due to its
indirect ownership of 100% of the stock of Lonrho, Inc. and Scottsdale
Princess, Inc., Lonrho Plc may also be deemed to beneficially own such
shares. Robert O. Anderson, Robert B. Anderson and W. Phelps Anderson
(the "Anderson Family"), Lonrho, Inc. and The Hondo Company are parties
to a Shareholders' Agreement dated October 17, 1986 (the "Shareholders'
Agreement") covering all of the outstanding shares of capital stock of
The Hondo Company and relating to the rights of the shareholders of The
Hondo Company to vote and dispose of the shares of The Hondo Company
owned by them. The Shareholders' Agreement does not directly relate to
shares of the Company's Common Stock owned by The Hondo Company. Among
other things, the Shareholders' Agreement provides that the Anderson
Family, on the one hand, and Lonrho, Inc., on the other hand, shall each
vote for an equal number of designees of the other to serve as the Board
of Directors of The Hondo Company. Since the management of The Hondo
Company is vested in its Board of Directors (which may make
determinations as a group with respect to the voting, including with
respect to the election of directors of the Company, and disposition of
the shares of Common Stock that The Hondo Company may have the right to
vote and dispose of), the ability of the parties to the Shareholder's
Agreement to elect the management of The Hondo Company give them
effective control over the voting and disposition of all of the shares
of Common Stock owned by The Hondo Company, (subject to the rights of
Lonrho Plc as pledgee and the litigation described below). See the
documents referred to in "Documents Incorporated by Reference" for
information about Robert O. Anderson.
Lonrho Plc has informed the Company that on July 6, 1993, Robert O.
Anderson granted an option in favor of Scottsdale Princess, Inc., a
subsidiary of Lonrho, Inc., to acquire up to 25% of the shares of The
Hondo Company out of his holdings. The option may be exercised at any
time on or before July 5, 1996. The exercise of the option is subject
to prior commitments and pledges to lenders made by Robert O. Anderson
with respect to the shares subject thereto. John F. Price is President
and director and R.E. Whitten is a director of Scottsdale Princess,
9
Inc., and are also directors of the Company. In a Schedule 13D filed on
March 8, 1995, by The Hondo Company, Robert O. Anderson, W. Phelps
Anderson and Robert B. Anderson, Robert O. Anderson stated that he
considers the option to be null and void.
In a Complaint for Declaratory Judgment filed on April 13, 1995, by
Bank of America, NT & SA ("Bank of America"), against Robert O.
Anderson, Robert B. Anderson, W. Phelps Anderson, Scottsdale Princess,
Inc., Lonrho Plc, Lonrho, Inc. and The Hondo Company, Bank of America
stated that it has caused a Writ of Execution to be levied against all
of Robert O. Anderson's shares in The Hondo Company pursuant to a
judgment held by it against Robert O. Anderson. In the Complaint, Bank
of America seeks a declaration that (a) the option granted to Scottsdale
Princess, Inc. by Anderson is unenforceable, and (b) that the
Shareholders' Agreement among the shareholders of The Hondo Company is
not enforceable against Bank of America as judgment creditor or against
a purchaser at an execution sale as to (i) the requirement that a
purchaser of the shares agree to be bound by the Shareholders'
Agreement, and (ii) the right of first refusal and the requirement of
consent granted to the other parties to the Shareholders' Agreement.
Lonrho, Inc. is a wholly-owned subsidiary of Lonrho Plc. Dieter Bock
and R.E. Whitten, directors of the Company, are directors of Lonrho Plc,
the indirect parent of Lonrho, Inc. John F. Price, a director of the
Company, is an associate director of Lonrho Plc. John F. Price is a
director and President, and R.E. Whitten is a director, of Lonrho, Inc.
See the documents referred to in "Documents Incorporated by Reference"
for information about Dieter Bock, John F. Price, R.E. Whitten,
Scottsdale Princess, Inc., Lonrho, Inc. and Lonrho Plc.
In a Schedule 13D filed on October 7, 1994, Lonrho Plc reported that
on October 3, 1994, Lonrho Plc purchased from Union Bank for
$40,000,000, and received an assignment of, all of Union Bank's rights
and obligations under a Revolving Credit Agreement between that bank and
The Hondo Company (the "Revolving Credit Agreement"), and the related
Promissory Note (the "Note"), the guarantees of Lonrho Plc and Robert O.
Anderson and a Pledge Agreement under which The Hondo Company's
obligations under the Revolving Credit Agreement, the Note and the
Pledge Agreement were secured by a pledge of all shares of Common Stock
of the Company then or thereafter owned by The Hondo Company (the
"Pledge Agreement").
Lonrho Plc has informed the Company that an Event of Default now
exists under the Revolving Credit Agreement and, therefore, Lonrho Plc
is entitled to, among other things, exercise its rights and remedies
provided under the Pledge Agreement, including voting the pledged shares
and selling the pledged shares from time to time and applying the
proceeds received therefrom to the payment of all obligations of The
Hondo Company under the Revolving Credit Agreement, Note and Pledge
Agreement. Lonrho Plc has advised both the Company and The Hondo
Company that The Hondo Company's rights have ceased and that such rights
have become vested in Lonrho Plc. Under the Pledge Agreement, the
Anderson Family has a first refusal right with respect to any sale by
Lonrho Plc of the pledged shares.
10
In an Amendment No. 4 to a Schedule 13D filed on March 8, 1995, by The
Hondo Company, Robert O. Anderson, W. Phelps Anderson and Robert B.
Anderson, Robert O. Anderson states that the purchase of the Union Bank
loan by Lonrho Plc violated the Shareholders' Agreement among the
shareholders of The Hondo Company (described in Note (1), above) and,
therefore, Lonrho Plc may not sell the shares of Common Stock subject to
the Pledge Agreement or exercise voting rights related thereto.
Amendment No. 4 also states that (a) in connection with the controversy
between Robert O. Anderson and Lonrho Plc, Robert O. Anderson has
advised Lonrho Plc that he believes that it is in the best interest for
The Hondo Company to sell its interest in the Company to a third party,
(b) Robert O. Anderson intends to actively seek to find a buyer for The
Hondo Company's interest in the Company, and (c) there can be no
assurance that Mr. Anderson will find a purchaser or that any offer, if
made, would be acceptable to Robert O. Anderson or Lonrho Plc.
PLAN OF DISTRIBUTION
The shares of Company Common Stock registered hereunder may be sold
from time to time by the Selling Shareholders.
The Selling Shareholders have informed the Company that Shares sold
under this Prospectus may be sold on the American Stock Exchange, in the
over-the-counter market, in negotiated transactions, or a combination of
such methods of sale, or otherwise, at market prices prevailing at the
time of sale, at prices related to such prevailing market prices or at
negotiated prices by one or more of the following methods: (a) through
ordinary brokerage transactions in which the broker solicits purchases,
(b) sales to one or more brokers or dealers as principal, and the resale
by such brokers or dealers for their account pursuant to this
Prospectus, including resales to other brokers and dealers, (c) block
trades 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 in order to facilitate the transaction or (d) negotiated
transactions with purchasers with or without a broker or dealer. In
connection with any sales, the Selling Shareholders, and any broker or
dealer participating in such sales may be deemed "underwriters" within
the meaning of the Securities Act of 1933 and any commissions, discounts
or concessions received by a broker or dealer (which may be in excess of
customary commissions) and any gain realized by such broker or dealer on
the sale of Shares may be deemed "underwriting compensation". Any such
commissions, discounts or concessions will be paid or borne by the
Selling Shareholders and not the Company.
Upon being notified by a Selling Shareholder that any material
arrangement has been entered into with a broker-dealer for the purchase
by a broker or dealer of shares covered hereby, a prospectus supplement
will be filed pursuant to Rule 424(c) of the Securities Act of 1933,
disclosing (i) the name of such Selling Shareholder and of the
participating broker-dealer(s); (ii) the number of shares involved;
(iii) the price at which such shares were sold; and (iv) the commissions
paid or discounts or concessions allowed to such broker-dealer(s), where
applicable.
11
EXPERTS
The consolidated financial statements of the Company appearing in the
Company's Annual Report on Form 10-K for the year ended September 30,
1994, have been audited by Ernst & Young LLP, independent auditors, as
set forth in their report thereon (which contains an explanatory
paragraph with respect to an uncertainty described in Note 1 to the
consolidated financial statements) included therein and incorporated
herein by reference. Such financial statements are, and audited
financial statements to be included in subsequently filed documents will
be, incorporated herein in reliance upon the reports of Ernst & Young
LLP pertaining to such financial statements (to the extent covered by
consents filed with the Securities and Exchange Commission) given upon
the authority of such firm as experts in accounting and auditing.
LEGAL MATTERS
The validity of the Shares offered hereby is being passed upon for the
Company by C.B. McDaniel, a director, Counsel to and Secretary of the
Company. Mr. McDaniel holds options to acquire 20,000 shares of the
Common Stock of the Company at an exercise price of $7.50 per share and
options to acquire 20,000 shares of the Common Stock of the Company at
an exercise price of $14.625 per share. As of May 5, 1995, Mr.
McDaniel's options for 20,000 shares (10,000 shares of which are
exercisable at each price) were exercisable.
12
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution.
The following are the actual and estimated expenses incurred in
connection with the registration and sale of the Selling Shareholders'
Shares. The Company will pay all of these expenses except the legal
fees of counsel to the Selling Shareholders.
Item Amount
SEC registration fees $ 819.08
Listing fee, American Stock Exchange 3,781.60
Legal fees and expenses 2,500.00*
Accountants' fees and expenses 3,000.00*
Miscellaneous 399.32*
Total $10,500.00*
____________________
* Estimated
Item 15. Indemnification of Directors and Officers.
Section 145 of the Delaware General Corporation Law permits a Delaware
corporation to indemnify its officers or directors under certain
circumstances. That statute provides that, in actions in which the
corporation is not a party, the corporation may indemnify its officers
and directors for losses incurred by them if the officer or director
acted in good faith and in a manner he reasonably believed to be in or
not opposed to the best interests of the corporation, and, with respect
to any criminal action or proceeding, had no reasonable cause to believe
his conduct was unlawful. In actions in which the corporation is a
party, the statute provides the same standard but prohibits
indemnification if the officer or director is adjudged liable to the
corporation, unless the Delaware Court of Chancery or the court in which
the suit or action is brought determines that, despite the adjudication
of liability but in view of all the circumstances of the case, such
person is fairly and reasonably entitled to indemnity. The statute
further permits a corporation to purchase and maintain insurance on
behalf of its officers or directors against any liability asserted
against him and incurred by him in such capacity or arising out of his
status as such, whether or not the corporation would have the power to
indemnify him against such liability.
The Company's Certificate of Incorporation does not restrict the
indemnification of officers or directors. The Company's Bylaws provide
for the indemnification of the Company's officers and directors to the
fullest extent permitted under Delaware law against all costs, charges,
expenses, liabilities and losses reasonably incurred or suffered by such
person in connection with any action, suit or proceeding by reason of
II-1
the fact that they are or were officers or directors of the Company.
The Company's Bylaws permit the Company to maintain insurance to protect
any officer or director of the Company against any expense, liability or
loss, whether or not the Company would have the power to indemnify such
person against such expense, liability or loss under Delaware law. The
Company's Bylaws further permit the Company to enter into agreements
with any officer or director providing for indemnification to the
fullest extent permitted by Delaware law. The Company has directors'
and officers' liability insurance policies presently in force insuring
directors and officers of the Company and its subsidiaries.
Item 16. Exhibits.
The following exhibits are filed as part of this Registration
Statement:
4 Restated Certificate of Incorporation and Bylaws of the
Company(1)
5 Opinion of C. B. McDaniel, Esq.
23.1 Consent of Ernst & Young LLP.
23.2 The consent of C. B. McDaniel, Esq. appears in Exhibit 5.
24 Powers of attorney.
____________________
(1) Included in the Company's Annual Report on Form 10-K for the year
ended September 30, 1994, and incorporated herein by reference.
II-2
Item 17. Undertakings.
The Company 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, unless the information otherwise required to
be included in a post-effective amendment is contained in a periodic
report filed by the Company pursuant to Section 13 or Section 15(d) of
the Securities Exchange Act of 1934 and incorporated herein by
reference;
(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, unless the information otherwise required
to be included in a post-effective amendment is contained in a periodic
report filed by the Company pursuant to Section 13 or Section 15(d) of
the Securities Exchange Act of 1934 and incorporated herein by
reference; and
(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 in the Registration
Statement;
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, 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; and
(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 Company hereby undertakes that, for purposes of determining any
liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to section 13(a) or section 15(d) of
the Securities Exchange Act of 1934 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
Securities Act of 1933 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 Securities and Exchange Commission such indemnification
is against public policy as expressed in the Act and is, therefore,
II-3
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 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-4
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, 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 Roswell, State of
New Mexico, on May 9, 1995.
HONDO OIL & GAS COMPANY
By: /s/Stanton J. Urquhart
_______________________
Stanton J. Urquhart
Vice President
II-5
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the dates indicated.
Signature Title Date
_________ _____ ____
Chairman of the
________________________ Board and Director
ROBERT O. ANDERSON
/s/ John J. Hoey President, Chief May 9, 1995
________________________ Executive Officer
JOHN J. HOEY and Director
/s/ Dieter Bock Director May 9, 1995
________________________
DIETER BOCK
/s/ C.B. McDaniel Secretary and May 9, 1995
________________________ Director
C.B. MCDANIEL
/s/ Douglas G. McNair Director May 9, 1995
________________________
DOUGLAS G. MCNAIR
/s/ John F. Price Director May 9, 1995
________________________
JOHN F. PRICE
Director
________________________
R. W. ROWLAND
/s/ Robert K. Steer Director May 9, 1995
________________________
ROBERT K. STEER
/s/ R. E. Whitten Director May 9, 1995
________________________
R. E. WHITTEN
/s/ Stanton J. Urquhart Vice President May 9, 1995
________________________ (Principal Financial
STANTON J. URQUHART and Principal
Accounting Officer)
II-6
[LETTERHEAD OF HONDO OIL & GAS COMPANY APPEARS HERE]
May 5, 1995
Hondo Oil & Gas Company
410 East College Boulevard
Roswell, NM 88201
Re: Registration Statement on Form S-3
Gentlemen:
At your request, I have examined the form of Registration
Statement on Form S-3 (the "Registration Statement") which you propose
to file with the Securities and Exchange Commission in connection with
the registration under the Securities Act of 1933, as amended, of
189,080 shares of your common stock, $1.00 par value (the "Shares")
issued in payment of interest to Lonrho Plc and Thamesedge, Ltd. I
have examined the proceedings heretofore taken by you in connection
with the authorization and issuance of the Shares to be sold in a
manner described in the Registration Statement.
It is my opinion that the Shares to be sold by the Selling
Shareholder as described in the Registration Statement, have been duly
and validly authorized for sale, and the Shares, when sold in the
manner set forth in the Registration Statement will be legally and
validly issued, fully paid and non-assessable.
I am a member of the State Bar of Texas and express no opinion
herein as to the effect that the laws and decisions of courts of any
jurisdiction other than the United States of America and the State of
Texas may have upon such opinions, except to the extent that the
opinions expressed above may relate to the general corporation laws of
the State of Delaware. The foregoing opinion is subject to and is
qualified in all respects by the statements in this paragraph.
I hereby consent to the use of this opinion as an Exhibit to the
Registration Statement.
Respectively submitted,
/s/ C.B. McDaniel
C.B. McDaniel
CBM/sju
Consent of Ernst & Young LLP, Independent Auditors
We consent to the reference to our firm under the caption "Experts" in
the Registration Statement, Form S-3, and related Prospectus of Hondo
Oil & Gas Company for the registration of 189,080 shares of its common
stock and to the incorporation by reference therein of our report dated
November 9, 1994, with respect to the consolidated financial statements
and schedules of Hondo Oil & Gas Company included in its Annual Report
(Form 10-K) for the year ended September 30, 1994, filed with the
Securities and Exchange Commission.
/s/ Ernst & Young LLP
Denver, Colorado
May 5, 1995
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints John J. Hoey or C.B. McDaniel,
his or her true and lawful attorneys-in-fact and agents, each acting
alone, with full powers of substitution and resubstitution, for him or
her and in his or her name, place and stead, in any and all capacities,
to sign any and all amendments to the Registration Statement on Form S-3
to which this Power of Attorney is being filed as an Exhibit, including
post-effective amendments, and to file the same, with all exhibits
thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorney-in-fact
and agents, 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 he or she might or
could do in person, and hereby ratifies and confirms all that his or her
said attorneys-in-fact and agents, each acting alone, or his or her
substitute or substitutes may lawfully do or cause to be done by virtue
thereof.
Date
------------
/s/ Dieter Bock May 9, 1995
---------------------------------------
DIETER BOCK
/s/ John J. Hoey May 9, 1995
---------------------------------------
JOHN J. HOEY
/s/ C.B. McDaniel
--------------------------------------- May 9, 1995
C.B. MCDANIEL
/s/ Douglas G. McNair
--------------------------------------- May 9, 1995
DOUGLAS G. MCNAIR
/s/ John F. Price
--------------------------------------- May 9, 1995
JOHN F. PRICE
/s/ Robert K. Steer
--------------------------------------- May 9, 1995
ROBERT K. STEER
/s/ R.E. Whitten
--------------------------------------- May 9, 1995
R. E. WHITTEN
