SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
Schedule 13D
Under the Securities Exchange Act of 1934
(Amendment No. 3)
HONDO OIL & GAS COMPANY
-----------------------
(Name of Issuer)
Common Stock, $1 par value
------------------------------
(Title of class of securities)
438138-10-9
(CUSIP Number)
Rudolph H. Funke, Secretary
Lonrho, Inc.
805 Third Avenue
New York, New York 10022
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(Person Authorized to Receive Notices and Communications)
September 27, 1996
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(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(b)(3) or (4), check the following box [_]
Check the following box if a fee is being paid with the statement [_]. A fee is
not required only if the reporting person: (1) has a previous statement on file
reporting beneficial ownership of more than five percent of the class of
securities described in Item 1; and (2) has filed no amendment subsequent
thereto reporting beneficial ownership of five percent or less of such class.
(See Rule 13d-7.)
Page 1 of 28 Pages
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CUSIP No. 438138-10-9 Page 2 of 28 Pages
Response to Question 1: Lonrho Plc
Response to Question 2: (a)
Response to Question 3: SEC USE ONLY
Response to Question 4: BK, OO
Response to Question 5: N/A
Response to Question 6: Great Britain
Response to Question 7: 0
Response to Question 8: 10,544,596 (shared with subsidiaries)
Response to Question 9: 0
Response to Question 10: 10,544,596 (shared with subsidiaries)
Response to Question 11: 10,544,596 (includes all shares owned
by all group members)
Response to Question 12: N/A
Response to Question 13: 76.5%
Response to Question 14: HC;CO
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CUSIP No. 438138-10-9 Page 3 of 28 Pages
Response to Question 1: Thamesedge Ltd.
Response to Question 2: (a)
Response to Question 3: SEC USE ONLY
Response to Question 4: OO
Response to Question 5: N/A
Response to Question 6: Great Britain
Response to Question 7: 783,396
Response to Question 8: 9,761,200 (shared with parent and
subsidiaries)
Response to Question 9: 783,396
Response to Question 10: 9,761,200 (shared with parent and
subsidiaries)
Response to Question 11: 10,544,596 (includes all shares owned
by all group members)
Response to Question 12: N/A
Response to Question 13: 76.5%
Response to Question 14: HC;CO
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CUSIP No. 438138-10-9 Page 4 of 28 Pages
Response to Question 1: Lonrho, Inc.
Response to Question 2: (a)
Response to Question 3: SEC USE ONLY
Response to Question 4: AF
Response to Question 5: N/A
Response to Question 6: Delaware
Response to Question 7: 0
Response to Question 8: 9,761,200 (shared with parent companies
and a subsidiary)
Response to Question 9: 0
Response to Question 10: 9,761,200 (shared with parent companies
and a subsidiary)
Response to Question 11: 9,760,200 (may be deemed to beneficially
own all 10,544,596 shares
owned by group)
Response to Question 12: X (excludes 783,396 shares owned
by parent, another group
member)
Response to Question 13: 70.9% (group's percentage ownership
is 76.5%)
Response to Question 14: HC; CO
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CUSIP No. 438138-10-9 Page 5 of 28 Pages
Response to Question 1: The Hondo Company
Response to Question 2: (1)
Response to Question 3: SEC USE ONLY
Response to Question 4: OO
Response to Question 5: N/A
Response to Question 6: New Mexico
Response to Question 7: 0
Response to Question 8: 9,761,200 (shared with parents)
Response to Question 9: 0
Response to Question 10: 9,761,200 (shared with parents)
Response to Question 11: 9,761,200 (may be deemed to own all
10,544,596 shares owned
by group)
Response to Question 12: X (excludes 783,396 shares
owned by another group
member)
Response to Question 13: 70.9% (group's percentage is 76.5%)
Response to Question 14: CO
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CUSIP No. 438138-10-9 Page 6 of 28 Pages
INTRODUCTION
This statement is being filed jointly by Lonrho Plc, Thamesedge
Ltd., Lonrho, Inc. and The Hondo Company (collectively, the "Reporting Persons")
with respect to their beneficial ownership of shares of Common Stock of Hondo
Oil & Gas Company. Lonrho Plc is the parent of Thamesedge Ltd. ("Thamesedge")
and, through Thamesedge and Thamesedge's wholly-owned subsidiary, Lonrho, Inc.,
the parent of The Hondo Company.
Prior to October 7, 1994, Lonrho Plc, Lonrho, Inc. and The Hondo
Company filed a joint statement (and amendments thereto) on Schedule 13D with
Mr. Robert O. Anderson. Lonrho, Plc and Lonrho, Inc. determined to report
separately from, in lieu of filing jointly with, The Hondo Company and Mr.
Anderson. Accordingly, Lonrho Plc and Lonrho, Inc. filed, together with
Scottsdale Princess, Inc. (at the time an indirect wholly-owned subsidiary of
Lonrho, Plc which, at the time, held an option to acquire shares of The Hondo
Company), a Schedule 13D on October 7, 1994 (the "Original Schedule 13D"). Those
Reporting Persons subsequently filed Amendment No. 1 to their Schedule 13D on
August 23, 1995 ("Amendment No. 1") and, jointly with The Hondo Company,
Amendment No. 2 to their Schedule 13D on January 9, 1996 ("Amendment No. 2").
The Original Schedule 13D, as amended by Amendment No. 1 and Amendment No. 2, is
referred to collectively as the "Schedule 13D". This Amendment No. 3 further
amends the Schedule 13D and contains a complete restatement of the entire
Schedule 13D as if a new Schedule 13D were filed (except for previously filed
exhibits).
Since Amendment No. 2, (i) the shares of the Issuer's Common Stock
owned directly by Lonrho Plc were transferred to Thamesedge Ltd and (ii) the
interest of Scottsdale Princess, Inc. in The Hondo Company (and, consequently,
its indirect interest in the Issuer) has been transferred to Lonrho, Inc.
Accordingly, Scottsdale Princess is no longer a Reporting Person.
All information contained in the Schedule 13D, as amended hereby,
concerning Messrs. Robert O. Anderson, W. Phelps Anderson and Robert B. Anderson
is to the best knowledge and belief of the Reporting Persons.
Item 1. Security and Issuer
-------------------
This statement relates to the Common Stock, par value $1 per share
(the "Common Stock"), of Hondo Oil & Gas Company, a Delaware corporation (the
"Issuer"). The principal executive offices of the Issuer are located at 10375
Richmond Avenue, Suite 900, Houston, Texas 77042.
Item 2. Identity and Background.
-----------------------
This statement is being filed by (a) Lonrho Plc, a corporation
organized under the laws of England, the principal business office of which is
located at Four Grosvenor Place, London, SW1X
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CUSIP No. 438138-10-9 Page 7 of 28 Pages
7DL, England; (b) Thamesedge Ltd., a corporation organized under the laws of
England, the principal business office of which is located at Four Grosvenor
Place, London, SW1X 7DL, England ("Thamesedge"); (c) Lonrho, Inc., a Delaware
corporation, the principal business office of which is located at 805 Third
Avenue, New York, New York 10022; and (d) The Hondo Company, a New Mexico
corporation, the principal business office of which is located at 410 East
College Boulevard, Roswell, New Mexico 88201 ("Hondo Company"). Lonrho Plc,
Thamesedge, Lonrho, Inc. and Hondo Company are referred to herein collectively
as the "Reporting Persons."
Lonrho Plc is a public company registered in England and listed on
the London and Johannesburg stock exchanges. Lonrho Plc and its subsidiaries are
engaged in a variety of activities, including mining, agriculture, motor vehicle
and agricultural equipment distribution, manufacturing, freight forwarding and
warehousing, printing and publishing and the ownership and management of
property and hotels.
Thamesedge, a wholly-owned subsidiary of Lonrho Plc, is a finance
and investment company.
Lonrho, Inc., a wholly-owned subsidiary of Thamesedge since
September 1996, is a holding company for the shares of The Hondo Company.
Hondo Company is a holding company for the shares of the Issuer.
As a result of their common control relationship, the Reporting
Persons, may be deemed to be a "group" under Rule 13d-5(b)(1) promulgated under
the Securities Exchange Act of 1934 (the "Exchange Act").
The name, business address, present principal occupation or
employment, and the name, principal business and address of any corporation or
other organization in which such employment is conducted, of each executive
officer and director of the Reporting Persons are set forth in Appendix A
hereto, and incorporated herein by reference.
During the last five years, none of the Reporting Persons nor, to
the best knowledge of the Reporting Persons, any person named in Appendix A
hereto has been convicted in a criminal proceeding (excluding traffic violations
or similar misdemeanors) or has been a party to a civil proceeding of a judicial
or administrative body of competent jurisdiction and as a result of such
proceeding was or is subject to a judgment, decree or final order enjoining
future violations of, or prohibiting or mandating activities subject to, federal
or state securities laws or finding any violation with respect to such laws.
To the best knowledge and belief of the Reporting Persons, the
citizenship of each person named in Appendix A is set forth in Appendix A
hereto, and is incorporated herein by reference.
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CUSIP No. 438138-10-9 Page 8 of 28 Pages
Item 3. Source and Amount of Funds or other Consideration.
-------------------------------------------------
(a) The shares of Common Stock beneficially owned by the
Reporting Persons were acquired as follows:
(i) Pursuant to an Exchange Agreement dated as of
October 28, 1987 among Hondo Company, Hondo Oil & Gas (a wholly-owned subsidiary
of Hondo Company) and the Issuer (then known as Pauley Petroleum Inc.), on
January 19, 1988, the Issuer issued 10,000,000 shares of Common Stock to Hondo
Company in exchange for Hondo Company's transfer to the Issuer of all of the
outstanding stock of Hondo Oil & Gas.
(ii) During the period from December 21, 1987 through
January 8, 1988, Hondo Company purchased an aggregate of 121,000 shares of
Common Stock in open market transactions at prices ranging from $14.50 to $18.00
(or an aggregate of approximately $2,083,000).
(iii) On January 19, 1988, Hondo Company purchased
350,000 shares of Common Stock at $20.00 per share (or an aggregate of
$7,000,000) from William R. Pagen under a Stock Purchase and Option Agreement
dated as of December 14, 1987 executed by Mr. Pagen on January 19, 1988. The
Stock Purchase and Option Agreement also granted Hondo Company an option to
purchase up to an additional 120,000 shares of Common Stock from Mr. Pagen,
which option expired unexercised on January 19, 1988.
(iv) On April 3, 1995, 99,113 and 89,967 shares of
Common Stock were issued by the Issuer to Lonrho Plc and Thamesedge,
respectively, in payment of interest of $1,201,749.50 and $1,090,850.52,
respectively, for the six months ended April 1, 1995 on certain indebtedness
owed to them by the Issuer, which interest may be paid if agreed between them in
Common Stock of the Issuer. See paragraph (b) in Item 6.
(v) On October 5, 1995, 65,431 and 55,941 shares of
Common Stock were issued by the Issuer to Lonrho Plc and Thamesedge,
respectively, in payment of interest of $1,275,911.70 and $1,090,850.52,
respectively, for the six months ended October 1, 1995 on certain indebtedness
owed to them by the Issuer. See paragraph (b) in Item 6.
(vi) On April 1, 1996, 197,944 shares of Common Stock
were issued by the Issuer to Thamesedge in payment of interest of $2,375,329 for
the six months ended April 1, 1996 on certain indebtedness owed to Thamesedge by
the Issuer. See paragraph (b) in Item 6.
Funds used by Hondo Company for the purchases of the Issuer's
Common Stock from Mr. Pagen and on the open market were borrowed from Union Bank
under a Revolving Credit Agreement dated January 12, 1988 (which, as amended to
date, is hereinafter referred to as the "Revolving Credit Agreement").
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CUSIP No. 438138-10-9 Page 9 of 28 Pages
(b) The following intercompany transfers of Common Stock
have been made among the Reporting Persons:
(i) On May 9, 1996, the 164,544 shares of Common Stock
then owned by Lonrho Plc were transferred to Thamesedge.
(ii) On September 27, 1996, Hondo Company transferred
an aggregate of 275,000 shares of Common Stock to Thamesedge.
(c) The following dispositions of Common Stock to third
parties have been made by the Reporting Persons:
(i) Since September 14, 1992, Hondo Company has sold
an aggregate of 320,800 shares of the Issuer's Common Stock under Rule 144
promulgated under the Securities Act of 1933, as amended (the "Securities Act"),
and under a Registration Statement filed under the Securities Act by the Issuer
on behalf of Hondo Company.
(ii) On May 14, 1996, Hondo Company transferred
60,000, 20,000 and 20,000 (an aggregate of 100,000) shares of the Issuer's
Common Stock to Robert O. Anderson, Robert B. Anderson and W. Phelps Anderson
(collectively, the "Anderson Family"), respectively, in partial redemption of
the Anderson Family's interest in Hondo Company pursuant to a Second Amendment
to Revised Settlement Agreement among Lonrho Plc, Lonrho, Inc., Scottsdale
Princess, Inc. and the Anderson Family. See paragraph (c) in Item 6.
(iii) On May 31, 1996, Hondo Company transferred
14,000 shares of Common Stock to a former employee in settlement of certain
litigation.
(d) 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 the Revolving Credit Agreement, the related Promissory
Note issued by Hondo Company thereunder (the "Note"), the Pledge Agreement dated
July 24, 1990 between Hondo Company and Union Bank (the "Pledge Agreement") and
the guarantees of Lonrho Plc and Robert O. Anderson of Hondo Company's
obligations under the Revolving Credit Agreement, the Note and the Pledge
Agreement. The Pledge Agreement secured Hondo Company's obligations under the
Revolving Credit Agreement, the Note and the Pledge Agreement by a pledge of all
shares of Common Stock of the Issuer then or thereafter owned by Hondo Company.
Lonrho Plc obtained the funds used to consummate the purchase from borrowings
under available lines of credit from Lloyd's Bank.
On March 29, 1996, the indebtedness of Hondo Company to Lonrho Plc
was assigned to Thamesedge and, accordingly, all rights of Lonrho Plc are now
rights of Thamesedge.
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CUSIP No. 438138-10-9 Page 10 of 28 Pages
The Revolving Credit Agreement entitled Hondo Company to borrow up
to $55,000,000 but required it to limit the aggregate unpaid principal amount of
loans to be outstanding from October 1, 1992 until September 30, 1993 to
$50,000,000 and thereafter until September 30, 1994 to $40,000,000, at which
time the remaining unpaid principal balance was to be repaid in full. The
Revolving Credit Agreement provides for interest at Union Bank's "Reference
Rate" plus 1-1/4% through March 31, 1991, 1-3/4% thereafter through September
30, 1993 and 3% thereafter through September 30, 1994. During any period that
the loans are not paid when due, the outstanding principal balance under the
Revolving Credit Agreement bears interest at Union's Bank's Reference Rate plus
5-1/4% per annum. There remains outstanding under the Revolving Credit Agreement
$40,000,000 principal amount of indebtedness.
Under the Revolving Credit Agreement Thamesedge is entitled to,
among other things, declare all or a portion of the outstanding loans and other
amounts payable thereunder to become due and payable.
Thamesedge reserves the right to declare an "Event of Default" and
to exercise its rights and remedies provided under the Pledge Agreement,
including selling the pledged shares from time to time and applying proceeds
received therefrom to the payment of all obligations of Hondo Company under the
Revolving Credit Agreement, Note and Pledge Agreement, inclusive of principal,
interest, fees and expenses. Any surplus cash proceeds and any shares not sold
after the repayment of such amounts will revert to Hondo Company. In this
regard, the Issuer has filed a registration statement under the Securities Act
to enable Hondo Company or its pledgee to sell pledged shares. The effect of any
such sale will be to reduce the number of shares of Common Stock owned directly
by Hondo Company and, through Hondo Company, by Lonrho Plc, Thamesedge and
Lonrho, Inc.
Item 4. Purpose of Transaction.
----------------------
The purpose of the acquisition of the shares of Common Stock by
Hondo Company in October 1987 was to acquire control of the Issuer under an
arrangement which effectively provided joint control of the Issuer by Lonrho Plc
and Lonrho, Inc., on the one hand, and the Anderson Family, on the other hand.
The other purchases of the Issuer's Common Stock reflected in Item 3 increased
the Reporting Persons' investment and interest in the Issuer's Common Stock. The
purpose of the Revised Settlement Agreement, as amended, discussed in paragraph
(c) of Item 6 is to, among other things, vest control of Hondo Company solely in
the Reporting Persons and provide a mechanism by which the interest of the
Anderson Family in Hondo Company may become a direct interest in a portion of
the Issuer's Common Stock held by Hondo Company .
No Reporting Person has any present plans or proposals which relate
to or would result in: (a) the acquisition of additional securities of the
Issuer (although the Reporting Persons retain the right, which they may exercise
at any time or from time to time, in their discretion, to acquire directly
shares of Common Stock, including the acquisition by Thamesedge of shares in
satisfaction of some or all of Hondo Company's obligations under the Revolving
Credit Agreement and additional shares
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CUSIP No. 438138-10-9 Page 11 of 28 Pages
of Common Stock from the Issuer in payment of interest on certain obligations of
the Issuer to Thamesedge as described in paragraph (b) of Item 6) or the
disposition of securities of the Issuer (except that (i) Hondo Company, as
owner, and Thamesedge, as pledgee, reserve the right to sell shares covered by a
registration statement filed under the Securities Act by the Issuer with respect
to 3,609,200 shares of the Issuer's Common Stock, and (ii) Thamesedge reserves
the right to sell shares covered by other registration statements filed under
the Securities Act by the Issuer with respect to shares of the Issuer's Common
Stock issued by the Issuer in payment of interest on certain indebtedness owed
it by the Issuer; (iii) under the Revised Settlement Agreement, as amended,
discussed in paragraph (c) of Item 6, certain shares owned by Hondo Company are
expected to be transferred to the Anderson Family as their interests in Hondo
Company are redeemed and (iv) all shares owned by the Reporting Persons could
also be sold pursuant to Rule 144 under the Securities Act or another exemption
from the registration provisions of the Securities Act), (b) an extraordinary
corporate transaction, such as a merger, reorganization or liquidation, (c) a
sale or transfer of a material amount of assets of the Issuer or any of its
subsidiaries (although Thamesedge reserves the right to enforce the rights under
certain mortgages securing certain loans made to the Issuer discussed in
paragraph (b) of Item 6), (d) any change in the present board of directors or
management of the Issuer, including any plans or proposals to change the number
or term of directors or to fill any existing vacancies on the board (except that
the Revised Settlement Agreement provides for Hondo Company to support Robert O.
Anderson's election as a director of the Issuer for five years from December 19,
1995; however, Mr. Anderson has resigned as a director of the Issuer, (e) any
material change in the present capitalization or dividend policy of the Issuer,
(f) any other material change in the Issuer's business or corporate structure,
(g) any changes in the Issuer's charter, by-laws or instruments corresponding
thereto or other actions which may impede the acquisition of control of the
Issuer by any person, (h) causing a class of securities of the Issuer to be
delisted from a national securities exchange or cease to be authorized to be
quoted in an inter-dealer quotation system of a registered national securities
association, (i) causing a class of equity securities of the Issuer to become
eligible for termination of registration pursuant to Section 12(g)(4) of the
Securities Exchange Act of 1934 or (j) any action similar to any of those
enumerated above.
Lonrho Plc has announced that it intends to restructure its
operations, which may entail the divestiture of certain assets. Accordingly,
Lonrho Plc reserves the right to divest itself of all or part of its investment
in any of the Issuer's direct or indirect controlling stockholders or cause its
subsidiaries to divest themselves of all or part of their investment in the
Issuer.
Item 5. Interest in Securities of the Issuer.
------------------------------------
Because of their ownership structure, the Reporting Persons may be
deemed a group within the meaning of Rule 13d-5 under the Exchange Act, and each
of the Reporting Persons may be deemed to be the beneficial owner, within the
meaning of Rule 13d-3 under the Exchange Act, of an aggregate of 10,544,598
shares of Common Stock of the Issuer, representing, based on the 13,776,194
shares of Common Stock which were issued and outstanding on August 9, 1996 as
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CUSIP No. 438138-10-9 Page 12 of 28 Pages
reflected in the Issuer's Quarterly Report on Form 10-Q for the nine months
ended June 30, 1996, approximately 76.5% of the outstanding shares of the
Issuer's Common Stock.
Hondo Company is the owner of record of 9,761,200 (70.9%) of the
Issuer's outstanding Common Stock and, therefore, may be deemed to have sole
voting and dispositive power over such shares. The shareholders of Hondo Company
and their approximate respective percentages of Hondo Company as of September
30, 1996 are set forth below:
Percentage of
Hondo Company
Hondo Company Shareholders Common Stock
-------------------------- ------------
Lonrho, Inc. 76.6%
The Anderson Family 23.4%
Lonrho, Inc., by virtue of its 76.6% ownership of Hondo Company,
may be deemed to have shared voting and dispositive power over the 9,761,200
(70.9%) of the Issuer's outstanding Common Stock owned of record by Hondo
Company.
Thamesedge is the owner of record of 783,396 (5.7%) of the Issuer's
outstanding Common Stock and, therefore, may be deemed to have sole voting and
dispositive power over such shares and, by virtue of its ownership of Lonrho,
Inc. as a wholly-owned subsidiary, may be deemed to have shared voting and
dispositive power over the 9,761,200 (70.9%) of the Issuer's outstanding Common
Stock owned of record by Hondo Company.
Lonrho Plc, by virtue of its ownership of Thamesedge as a
wholly-owned subsidiary, may be deemed to have shared voting and dispositive
power over all 10,544,596 (76.5%) of the Issuer's outstanding Common Stock which
may be deemed beneficially owned by Thamesedge, Lonrho, Inc.
and Hondo Company.
On June 10, 1996, the interest of Scottsdale Princess, Inc. in
Hondo Company was transferred to Lonrho, Inc., and Scottsdale Princess Inc.
ceased having any direct or indirect interest in the Issuer's capital stock and,
accordingly, is no longer a Reporting Person.
See paragraph (c) of Item 6 with respect to the rights of the
Anderson Family to require Hondo Company to redeem, and the right of Hondo
Company to redeem, the Anderson Family's remaining interest in Hondo Company in
exchange for 1,100,000 shares of the Issuer's Common Stock owned by the Anderson
Family.
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CUSIP No. 438138-10-9 Page 13 of 28 Pages
Item 6. Contracts, Arrangements, Understandings or Relationships with
-------------------------------------------------------------
Respect to Securities of the Issuer.
------------------------------------
(a) Reference is made to Item 3 above for information with
respect to the Pledge Agreement between Hondo Company and Union Bank relating to
shares of the Issuer's Common Stock owned by Hondo Company which pledge was
assigned by Union Bank to Lonrho Plc. On March 29, 1996, the indebtedness of
Hondo Company secured by this pledge was assigned by Lonrho Plc to Thamesedge
and, accordingly, Thamesedge became the pledgee of such shares.
(b) The Issuer has, at times, incurred indebtedness to
Lonrho Plc, Thamesedge and other affiliates of Lonrho Plc. On March 29, 1996,
all of the Issuer's indebtedness to Lonrho Plc was assigned to Thamesedge and,
accordingly, such amounts are now due Thamesedge.
(i) On November 30, 1988, Thamesedge purchased a
$75,000,000 13.5% Senior Note, due in 1998, from the Issuer in a private
placement. In December 1995, Thamesedge agreed to extend the mandatory
redemption dates of the notes to November 1, 1997 and November 1, 1998, with one
half of the aggregate principal amount outstanding on November 1, 1997 due on
each such date, plus accrued interest. The Note is secured by a mortgage on
certain real estate owned by the Issuer. At September 30, 1996, the outstanding
principal amount due on this Note was $36,361,000 (including , as discussed
below, accrued interest added to principal).
(ii) On September 1, 1991, November 1, 1991 and
December 20, 1991, Lonrho Plc, Thamesedge and other affiliates of Lonrho Plc
loaned the Issuer an aggregate of $32,000,000. At the time the loans were made
the interest rate was similar to that applicable to the Issuer's former working
capital loan with a bank for its refining and marketing operations. On October
18, 1994, the Company paid Lonrho Plc $5,000,000 to repay a portion of the loans
made in calendar 1991. At the same time, Lonrho provided a $5,000,000 loan
facility to the Issuer, upon similar terms as these loans. In December 1995, the
lenders agreed to extend the maturity date of these loans to October 1, 1997.
This Note is secured by a mortgage on certain real estate owned by the Issuer.
At September 30, 1996, the outstanding principal amount due on this Note and the
loan facility was $36,200,000 (including, as discussed below, accrued interest
added to principal).
(iii) On April 30, 1993, Lonrho Plc loaned to the
Issuer an additional $3,000,000 and, as security, the Issuer granted to Lonrho
Plc a mortgage on certain real property. An additional $277,000 of accrued
interest on this loan has been added to principal. On June 25, 1993, Lonrho Plc
and Thamesedge agreed to loan the Issuer an additional $4,000,000 (all of which
has been advanced) and, as security, the Issuer granted to Lonrho Plc a mortgage
on certain other real property. An additional $271,000 of accrued interest on
this loan has been added to principal. In December 1995, the lenders agreed to
extend the maturity of each note so that each is payable on the earlier of (i)
the sale of the property securing the respective note or (ii) in ten semi-annual
installments commencing on October 1, 1997.
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CUSIP No. 438138-10-9 Page 14 of 28 Pages
(iv) Thamesedge and the Issuer have entered into a
Revolving Credit Agreement dated as of June 28, 1996, under which the Issuer may
borrow up to $13.5 million from Thamesedge until June 30, 1997, when the
outstanding principal balance of loans made under the facility are to be repaid.
The Revolving Credit Agreement also provides for potential mandatory prepayments
from "free cash flow", as defined. Loans bear interest at the rate of 13% per
annum. While no borrowings were outstanding under this line of credit on
September 30, 1996, in October 1996, the Issuer borrowed $4,000,000 under this
line of credit.
On December 18, 1992, Lonrho Plc and Thamesedge agreed to defer
interest and certain principal payments on loans then outstanding. On December
18, 1993, Lonrho Plc and Thamesedge agreed to add accrued interest at September
30, 1993 to principal and reduce the interest rate on each of the loans to 6%
per annum effective September 30, 1993 and defer principal payments on the
loans. As consideration for the deferral of interest and principal payments, on
December 18, 1992, the Issuer granted Lonrho Plc a 5% share of the Issuer's net
profits, as defined, under the Opon Association Contract pursuant to which a
wholly-owned subsidiary of the Issuer is participating in the exploration and
development of oil and gas in the Middle Magdalena Basin, about 125 miles north
of Bogota, Columbia. Following the final payment of the foregoing indebtedness,
Lonrho Plc's share of such net profits will be decreased by one-half. Lonrho Plc
may transfer to Thamesedge its rights in and to such share of the Issuer's net
profit.
Thamesedge (and Lonrho Plc with respect to indebtedness assigned to
Thamesedge) and the Issuer have agreed that, if the Issuer does not have
sufficient cash resources to pay interest on any of the foregoing indebtedness
when due, then the Issuer 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
Thamesedge may either accept such offer or add the amount of interest then due
to the remaining outstanding principal balance of the applicable obligation. See
Item 3 for information concerning shares of the Issuer's Common Stock that have
been issued to Lonrho Plc and Thamesedge pursuant to this arrangement.
(c) On December 20, 1995, the Reporting Persons (other
than Thamesedge) and Scottsdale Princess, Inc. and the members of the Anderson
Family entered into a Revised Settlement Agreement (as amended on January 5,
1996 and May 14, 1996, the "Revised Settlement Agreement") to replace a
Settlement Agreement dated August 23, 1995 between them. The following summary
of the Revised Settlement Agreement is qualified in its entirety by reference
thereto (which appears as Exhibits 10 and 11 to Amendment No. 2 to this Schedule
and Exhibit No. 12 to this Amendment No. 3). Under the Revised Settlement
Agreement, on January 5, 1996, among other things, (i) Scottsdale Princess, Inc.
exercised its right under the Option Agreement dated as of July 6, 1993 between
Robert O. Anderson and Scottsdale (and reported in the Original Schedule 13D) to
acquire 25% of the issued and outstanding Common Stock of Hondo Company from Mr.
Anderson, increasing the then ownership of the Reporting Persons in Hondo
Company to 75% and decreasing the ownership interest of the Anderson Family in
Hondo Company to 25% (the interest of Scottsdale Princess, Inc. in Hondo Company
was subsequently transferred to Lonrho, Inc.); (ii) the Shareholders'
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CUSIP No. 438138-10-9 Page 15 of 28 Pages
Agreement dated October 17, 1986 among Lonrho, Inc., the Anderson Family and
Hondo Company, which (while not directly related to the Issuer's Common Stock
held by Hondo Company) required Lonrho, Inc., on the one hand, and the Anderson
Family, on the other hand, to designate an equal number of directors of Hondo
Company, became null and void, thus enabling Lonrho, Inc. (as majority
shareholder of Hondo Company) to elect all of Hondo Company's directors and
control Hondo Company's policies; and (iii) the Anderson Family agreed that
their 25% interest in Hondo Company was to be exchanged for 1,200,000 shares of
Common Stock of the Issuer which they, acting solely through Robert O. Anderson,
would have the right to call at the rate of 400,000 shares annually for three
consecutive years beginning January 5, 1997 against delivery to Hondo Company
for redemption of one-third annually of their aggregate 25% interest in Hondo
Company, while Hondo Company has the right, beginning January 5, 1999, to put to
the Anderson Family so much of the 1,200,000 registered shares of Common Stock
of the Issuer which the members of the Anderson Family have not previously
required Hondo Company to transfer in exchange for their remaining interest in
Hondo Company; and (iv) Hondo Company agreed to support Robert O. Anderson's
election as a director of the Issuer for five years from December 20, 1995;
however, Mr. Anderson subsequently resigned as a director of the Issuer. Hondo
Company has agreed to cause the Issuer to file a registration statement (or a
post-effective amendment to an existing registration statement) under the
Securities Act covering the resale of the Issuer's shares of Common Stock
deliverable to the Anderson Family (or a pledgee of the Anderson Family), and
use its best efforts to cause such registration statement to be declared
effective no later than January 5, 1997 and to maintain such registration
statement until January 5, 2000.
On May 14, 1996, the parties to the Revised Settlement Agreement
entered into a Second Amendment to Revised Settlement Agreement among the
parties to the Revised Settlement Agreement pursuant to which, among other
things, Hondo Company redeemed from the Andersons approximately 1/12 of the
Andersons' 25% interest in Hondo Company in exchange for 100,000 shares of
Common Stock owned by Hondo Company.
Item 7. Material to be filed as Exhibits.
--------------------------------
1.+ Agreement, dated October 21, 1996 between the Reporting Persons
with respect to their joint filing of this statement.
2(a) Power of Attorney dated October 6, 1994 executed by Lonrho Plc in
favor of John F. Price and Rudolph H. Funke with respect to the
execution of the Schedule 13D, including all amendments thereto.
2(b)* Power of Attorney dated January 8, 1996 executed by Thamesedge Ltd.
in favor of John F. Price and Rudolf H. Funke with respect to the
execution of the Schedule 13D, including all amendments thereto.
3. Assignment Agreement dated as of October 3, 1994 between Union Bank
and Lonrho Plc.
<PAGE>
CUSIP No. 438138-10-9 Page 16 of 28 Pages
4. Second Amended and Restated Revolving Credit Agreement between The
Hondo Company and Union Bank, including as exhibits thereto the
forms of the Note, the Pledge Agreement and the Guarantees of
Lonrho Plc and Robert O. Anderson.
5. Shareholders' Agreement dated October 17, 1986 by and among Robert
O. Anderson, Robert B. Anderson, W. Phelps Anderson, Lonrho, Inc.
and The Hondo Company (then known as The Diamond A Cattle Company).
6. Option Agreement dated as of July 6, 1993 between Robert O.
Anderson and Scottsdale Princess, Inc.
7. Net Profits Share Agreement dated December 18, 1992, among the
Company, Lonrho Plc and Thamesedge, Ltd.
8. Letter Agreement dated December 17, 1993, by and among the Company,
Via Verde Development Company, Newhall Refining Co., Inc., Lonrho
Plc and Thamesedge, Ltd.
9.+ Settlement Agreement dated August 23, 1995 between the Reporting
Persons (other than Thamesedge Ltd. and Hondo Company).
10.* Revised Settlement Agreement dated December 20, 1995 between the
Reporting Persons (other than Thamesedge) and the Anderson Family.
11.* First Amendment dated January 5, 1996 to the Revised Settlement
Agreement between the Reporting Persons (other than Thamesedge),
Scottsdale Princess, Inc. and the Anderson Family.
12.+ Second Amendment dated May 14, 1996 to the Revised Settlement
Agreement between the Reporting Persons (other than Thamesedge),
Scottsdale Princess, Inc. and the Anderson Family.
- ---------------------------------------
+ Filed with Amendment No. 1 to the Schedule 13D.
* Filed with Amendment No. 2 to the Schedule 13D.
+ Filed herewith.
All other exhibits were filed with the original Schedule 13D. All
exhibits, other than those filed herewith, are incorporated herein
by reference thereto.
<PAGE>
CUSIP No. 438138-10-9 Page 17 of 28 Pages
SIGNATURES
After reasonable inquiry and to the best of the knowledge and
belief of the undersigned, the undersigned certify that the information set
forth in this Statement is true, complete and correct.
Dated: October 28, 1996
Lonrho Plc
By: /s/ John F. Price
--------------------------
John F. Price
Under Power of Attorney
dated October 6, 1994
Thamesedge Ltd.
By: /s/ John F. Price
--------------------------
John F. Price
Under Power of Attorney
Dated: January 8, 1996
Lonrho, Inc.
By: /s/ John F. Price
--------------------------
John F. Price, President
The Hondo Company
By: /s/ John F. Price
--------------------------
John F. Price, President
<PAGE>
CUSIP No. 438138-10-9 Page 18 of 28 Pages
APPENDIX A
----------
I. Lonrho Plc
----------
Set forth below are the name, present principal occupation or
employment, business address and citizenship of each director and executive
officer of Lonrho Plc.
Name and Principal
Position held Occupation
with Lonrho Plc or Employment Business Address Citizenship
--------------- ------------- ---------------- -----------
Sir John Leahy, Chairman Four Grosvenor Place United Kingdom
K.C.M.G. Lonrho Plc London, SW1X 7DL,
Chairman England
D. Bock Managing Four Grosvenor Place Germany
Managing Director and London, SW1X 7DL,
Director and Chief Executive England
Chief Executive Lonrho Plc
S.E. Jonah Director Four Grosvenor Place Ghana
Director Lonrho Plc London, SW1X 7DL,
England
N.J. Morrell Director Four Grosvenor Place United Kingdom
Director Lonrho Plc London, SW1X 7DL,
England
J.L. Platts-Mills Director Four Grosvenor Place United Kingdom
Director Lonrho Plc London, SW1X 7DL,
England
R.E. Whitten Director Four Grosvenor Place United Kingdom
Director Lonrho Plc London, SW1X 7DL,
England
Terence Wilkinson Director Four Grosvenor Place South Africa
Director Lonrho Plc London, SW1X 7DL,
England
<PAGE>
CUSIP No. 438138-10-9 Page 19 of 28 Pages
Name and Principal
Position held Occupation
with Lonrho Plc or Employment Business Address Citizenship
--------------- ------------- ---------------- -----------
M.J. Pearce Company Secretary Four Grosvenor Place United Kingdom
Company Secretary Lonrho Plc London, SW1X 7DL,
England
Peter Harper Director- Four Grosvenor Place United Kingdom
Non-Executive Parliamentary London, SW1X 7DL,
Independent Director Affairs England
Hanson Plc
Stephen Walls Chairman Four Grosvenor Place United Kingdom
Non-Executive Albert Fisher London, SW1X 7DL,
Independent Director Group Plc England
<PAGE>
CUSIP No. 438138-10-9 Page 20 of 28 Pages
II. Thamesedge Ltd.
---------------
Set forth below are the names, present principal occupation or
employment, business address and citizenship of each director and executive
officer of Thamesedge.
Name and Principal
Position held Occupation
with Thamesedge or Employment Business Address Citizenship
--------------- ------------- ---------------- -----------
R.E. Whitten Director Four Grosvenor Place United Kingdom
Director Lonrho Plc London, SW1X 7DL,
England
N.J. Morrell Director Four Grosvenor Place United Kingdom
Director Lonrho Plc London, SW1X 7DL,
England
J.L. Platts-Mills Director Four Grosvenor Place United Kingdom
Director Lonrho Plc London, SW1X 7DL,
England
<PAGE>
CUSIP No. 438138-10-9 Page 21 of 28 Pages
III. Lonrho Inc.
-----------
Set forth below are the name, present principal occupation or
employment, business address and citizenship of each director and executive
officer of Lonrho, Inc.
Name and Principal
Position held Occupation
with Lonrho Inc. or Employment Business Address Citizenship
---------------- ------------- ---------------- -----------
John F. Price President 805 Third Avenue United States
President and Princess Hotels New York, New York
Director International, Inc. 10022
James E.M. Evans Vice President- 805 Third Avenue United States
Vice President-Finance Finance New York, New York
and Treasurer Princess Hotels 10022
International, Inc.
Rudolph H. Funke General Counsel 805 Third Avenue United States
Secretary Princess Hotels New York, New York
International, Inc. 10022
R.E. Whitten Director Four Grosvenor Place United Kingdom
Director Lonrho Plc London, SW1X 7DL,
England
Vincent Carrozza Regional Vice P.O. Box 1351 United States
Director President Acapulco, GRO
Princess Hotels 39300 Mexico
International, Inc.
<PAGE>
CUSIP No. 438138-10-9 Page 22 of 28 Pages
IV. Hondo Company
-------------
Set forth below are the names, present principal occupation or
employment, business address and citizenship of each director and executive
officer of Hondo Company.
Name and Principal
Position held Occupation
with Hondo Company or Employment Business Address Citizenship
------------------ ------------- ---------------- -----------
John F. Price President 805 Third Avenue United States
President and Princess Hotels New York, New York
Director 10022
Richard W. Reese Vice President 410 East College Blvd. United States
Vice President Hondo Company Roswell, New Mexico
S.H. Cavin Counsel 410 East College Blvd. United States
Secretary Hondo Company Roswell, New Mexico
D. Bock Managing Director Four Grosvenor Place Germany
Managing and Chief London, SW1X 7DL,
Director Executive England
Lonrho Plc
R.E. Whitten Director Four Grosvenor Place United Kingdom
Director Lonrho Plc Four Grosvenor Place
London, SW1X 7DL,
England
<PAGE>
CUSIP No. 438138-10-9 Page 23 of 28 Pages
EXHIBIT 1
---------
The undersigned agree that the statement on Schedule 13D to which
this Agreement is attached is filed on behalf of each of them.
Dated: October 21, 1996
Lonrho Plc
By: /s/ John F. Price
----------------------------
John F. Price
Under Power of Attorney
dated October 6, 1994
Thamesedge Ltd.
By: /s/John F. Price
----------------------------
John F. Price
Under Power of Attorney
Dated January 8, 1996
Lonrho, Inc.
By: /s/ John F. Price
----------------------------
John F. Price, President
The Hondo Company.
By: /s/ John F. Price
----------------------------
John F. Price, President
<PAGE>
CUSIP No. 438138-10-9 Page 24 of 28 Pages
EXHIBIT 12
----------
SECOND AMENDMENT TO REVISED SETTLEMENT AGREEMENT
This Second Amendment entered into this 14th day of May 1996 ("the
Second Amendment") to the Revised Settlement Agreement dated December 20, 1995,
between Lonrho Plc ("Lonrho"), Lonrho, Inc. ("LI"), Scottsdale Princess, Inc.
("SPI") (Lonrho, LI and SPI being collectively hereafter referred to as "The
Lonrho Group"), Robert O. Anderson ("ROA"), W. Phelps Anderson ("WPA") and
Robert B. Anders ("RBA") (ROA, WPA and RBA being collectively referred to as
"The Andersons") and The Hondo Company ("Hondo") the Lonrho Group, The Andersons
and Hondo being collectively hereafter referred to as "the parties").
WHEREAS, on August 23, 1995, the parties entered into a Settlement
Agreement whereby the parties resolved all matters then pending between them;
WHEREAS, on December 20, 1995 the parties entered into a Revised
Settlement Agreement (the "Revision") that superseded the Settlement Agreement
in all respects;
WHEREAS, on January 5, 1996 the parties entered into a First
Amendment (the "First Amendment") (the Settlement Agreement, Revision and the
First Amendment being hereinafter collectively referred to as the "Agreement");
and
WHEREAS, the parties now desire to further amend certain provisions
of the Agreement to allow for a redemption by The Andersons of a portion of
their Hondo shares for shares of common stock of Hondo Oil & Gas ("HOG") earlier
than otherwise provided by said Agreement.
NOW THEREFORE the parties hereto agree as follows:
<PAGE>
CUSIP No. 438138-10-9 Page 25 of 28 Pages
1) Definitions. All terms used, but not defined herein, shall have the
meaning ascribed to them in the Agreement.
2) Advance of 100,000 HOG Shares. Notwithstanding the provisions of Section 8
of the Revision, The Andersons have requested that Hondo now distribute to
them 100,000 common shares of HOG out of the 400,000 shares of HOG
callable by the Andersons on the 1st anniversary of the Agreement Closing
in redemption of 172 shares of Hondo common stock.
The allocation of the 100,000 common shares of HOG to be delivered
to The Andersons shall be as follows:
Percentage of
Transferee # of HOG Shares The Anderson Shares
- ---------- --------------- -------------------
ROA 60,000 5.000
RBA 20,000 1.667
WPA 20,000 1.667
------ -----
100,000 8.334
The shares shall be distributed as soon as practicable. The HOG
shares will be (i) delivered to the Andersons against delivery of the
Hondo shares referred to in Section 3 hereof as soon as practical after
the date of this agreement and in no event later than May 31, 1996; (ii)
based on information and belief, fully paid, non-assessable, and free and
clear of any liens or encumbrances whatsoever, which liens and
encumbrances, to the extent held by Lonrho Plc or any of its affiliates,
are hereby released against delivery of the Hondo shares referred to in
Section 3 hereof; (iii) registered by HOG for resale by Hondo with the
<PAGE>
CUSIP No. 438138-10-9 Page 26 of 28 Pages
Securities and Exchange Commission under the Securities Act of 1933, as
amended, pursuant to a Registration Statement on Form S-3 (Registration
No. 33-52496), a copy of which has been delivered to each of the Andersons
and as to which no representations are made by Hondo or its affiliates
(except for HOG); and (iv) free from any restrictive legends and any
stop-transfer instructions, except with respect with certificates
delivered to ROA in the event he is deemed to be an affiliate of HOG. The
Andersons agree that any resales of the HOG shares received hereunder will
be in compliance with the Securities Act of 1933, as amended, or an
exemption therefrom.
3) Transfer of Shares of Hondo. The consideration for the delivery of the
shares described above shall be the simultaneous transfer to, and
redemption by, Hondo from The Andersons or an equivalent percentage of the
shares of Hondo (from the shares of Hondo which were to be delivered by
The Andersons) as if The Andersons had exercised their call of HOG shares
on the 1st anniversary of the Agreement Closing as follows:
Percentage of
The Anderson
Transferee # of HOG Shares Shares Redeemed
---------- --------------- ---------------
ROA 104 5.031
RBA 34 1.644
WPA 34 1.644
---- -----
172 8.319
The Hondo shares will be (i) delivered to Hondo against delivery of
the HOG shares referred to in Section 2 hereof as soon as practical after
the date of this agreement and in no
<PAGE>
CUSIP No. 438138-10-9 Page 27 of 28 Pages
event later than May 31, 1996; and (ii) based on information and belief,
fully paid, non-assessable, and free and clear of any liens or
encumbrances whatsoever.
4) Closing. The Andersons shall deliver the Hondo shares to be redeemed, and
Lonrho shall deliver the HOG shares (which it is holding as pledgee) to be
transferred by Hondo to Charles McDaniel, Esq., at Hondo Oil & Gas, 10375
Richmond Avenue, Suite 900, Houston, TX 77042, who is instructed (upon
receipt of both the Hondo shares and HOG shares) to forward the
certificates evidencing the Hondo shares to the Secretary of Hondo and the
HOG shares to the transfer agent for the Common Stock of HOG for transfer
in accordance with the terms of this agreement and reissuance of any
balance certificate to any party who delivers a certificate covering more
than the number of shares being transferred by him or it hereunder.
5) Adjustments. The fractional difference between the number of HOG shares
being delivered to The Andersons and the number of Hondo shares being
delivered to Hondo shall be adjusted to accomplish the intent of the
Agreement to the extent practicable as and when HOG shares are
subsequently transferred upon the exercise of either the put or the call
so that if all of the calls are exercised by ROA or the Hondo Put is
exercised by Hondo, then by either of these events The Lonrho Group will
have acquired 100% of the outstanding shares of Hondo.
6) Loan of HOG Shares. On delivery of the 100,000 HOG shares described in
Section 2 above, the obligation under Section 15 of the Revision to lend
up to 800,000 registered shares to The Andersons is reduced to 700,000
registered shares of HOG.
7) Ratification. Except as specifically modified by this Second Amendment,
the Agreement continues unchanged and in full force and effect. In the
event of any conflict between the
<PAGE>
CUSIP No. 438138-10-9 Page 28 of 28 Pages
terms of the Agreement and this Second Amendment, the terms of this Second
Amendment shall prevail.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written:
The Lonrho Group: The Anderson Group:
Lonrho Plc R.O. Anderson
By /s/ Robert E. Whitten /s/ Robert O. Anderson
------------------------- -------------------------
Lonrho, Inc. W. Phelps Anderson
By /s/ John F. Price /s/ W. Phelps Anderson
------------------------- -------------------------
Scottsdale Princess, Inc. Robert B. Anderson By:
By /s/ John F. Price /s/ W. Phelps Anderson
------------------------- -------------------------
Attorney-in-Fact
The Hondo Company:
By /s/ Robin E. Whitten
-------------------------
