As filed with the Securities and Exchange Commission on March 22, 1999.
Registration No. 333-________
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
BAYOU STEEL CORPORATION
(Exact name of registrant as specified in its charter)
DELAWARE 138 HIGHWAY 3217 72-1125783
(State or other P. O. BOX 5000 (I.R.S. Employer
jurisdiction of LAPLACE, LOUISIANA 70068 Identification Number)
incorporation (504) 652-4900
or organization) (Address, including zip code,
and telephone number, including area
code, of registrant's principal
executive offices)
RICHARD J. GONZALEZ COPY TO:
VICE PRESIDENT, CHIEF FINANCIAL OFFICER, LISA MANGET BUCHANAN
TREASURER AND SECRETARY JONES, WALKER, WAECHTER, POITEVENT,
BAYOU STEEL CORPORATION CARRERE & DENEGRE, L.L.P.
138 HIGHWAY 3217 51ST FLOOR
P. O. BOX 5000 201 ST. CHARLES AVENUE
LAPLACE, LOUISIANA 70068 NEW ORLEANS, LOUISIANA 70170-5100
(504) 652-4900
(Name, address, including zip code,
and telephone number, including area
code, of agent for service)
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
From time to time after the effective date of this registration statement
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 dividend or
interest reinvestment plans, please check the following box. X
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following
box and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. ____
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. ____
If delivery of the prospectus is expected to be made pursuant to Rule
434, please check the following box. ____
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
TITLE OF EACH CLASS OF AMOUNT TO BE PROPOSED PROPOSED AMOUNT OF
SECURITIES TO BE REGISTERED REGISTERED(1) MAXIMUM MAXIMUM REGISTRATION
OFFERING PRICE AGGREGATE FEE
PER UNIT(2) OFFERING PRICE(2)
<S> <C> <C> <C> <C>
Class A Common Stock, $.01 par value 822,422 shares $ 3.688 $3,033,092 $844
</TABLE>
(1) In the event of a stock split, stock dividend or similar transaction
involving Class A Common Stock of the Registrant, in order to prevent
dilution the number of shares registered shall be automatically
increased to cover the additional shares in accordance with Rule 416(a)
under the Securities Act of 1933.
(2) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457(c) under the Securities Act of 1933, based on the
average of the high and low price per share of Class A Common Stock on
the American Stock Exchange on March 17, 1999.
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE
OR DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THIS REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
<PAGE>
BAYOU STEEL CORPORATION
PROSPECTUS
CLASS A COMMON STOCK
($.01 PAR VALUE)
This Prospectus relates to the offering of up to 822,422 shares of Class
A Common Stock, $.01 par value per share, of Bayou Steel Corporation that may
be offered from time to time by Rice Partners II, L.P. We will not receive any
proceeds from the sale of the shares. We have agreed to pay all expenses of
registration incurred in connection with this offering (including printing
expenses, legal fees, accounting fees and filing fees), and the selling
stockholder will pay all selling and other expenses incurred by it.
Shares may be sold from time to time in ordinary brokerage transactions
on the American Stock Exchange or such principal securities exchange on which
the Class A Common Stock is then trading at the price prevailing at the time of
such sales. The commission payable will be the regular commission a broker
receives for effecting such sales, and the proceeds to the selling stockholder
will be net of brokerage commissions
Our company has three classes of common stock outstanding: Class A,
Class B and Class C. The economic rights of the holders of Class A, Class B
and Class C Common Stock are essentially identical, except that holders of
Class A and Class C Common Stock are entitled to one vote per share and holders
of Class B Common Stock are entitled to up to ten votes per share. Class B
stockholders are currently entitled to 7.014 votes per share. Our directors
are currently elected by class, but only holders of Class A and Class B Common
Stock are entitled to elect directors.
The Class A Common Stock is traded on the American Stock Exchange under
the symbol "BYX." On March 17, 1999, the last reported sale price of the
Class A Common Stock on the American Stock Exchange was $ 3.75 per share.
See "Risk Factors" beginning on page 3 for information that you should
consider before purchasing the shares.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR DETERMINED IF
THIS PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS
A CRIMINAL OFFENSE.
THE DATE OF THIS PROSPECTUS IS MARCH 22, 1999.
<PAGE>
WHERE YOU CAN FIND MORE INFORMATION
Our company is subject to the informational requirements of the
Securities Exchange Act of 1934 (the "Exchange Act") and, in accordance with
those requirements, files reports, proxy statements and other information with
the Securities and Exchange Commission. Such reports, proxy statements and
other information may be inspected and copied at the public reference
facilities maintained by the Commission at 450 Fifth Street, N.W., Washington,
D.C. 20549, and at the following regional offices of the Commission: 7 World
Trade Center, New York, New York 10048 and 500 West Madison Street, Suite 1400,
Chicago, Illinois 60661. Copies of such material may be obtained from the
Public Reference Section of the Commission at 450 Fifth Street, N.W.,
Washington, D.C. 20549, at prescribed rates. We are also required to file
electronic versions of these documents with the Commission through the
Commission's Electronic Data Gathering, Analysis and Retrieval System
("EDGAR"). The Commission also maintains a website (http://www.sec.gov) that
contains information regarding registrants, such as our company, that file
electronically with the Commission. Our Class A Common Stock is traded on the
American Stock Exchange. Reports, proxy statements and other information
concerning our company may also be inspected at the offices of the American
Stock Exchange, Inc., 86 Trinity Place, New York, New York 10006-1881.
The Commission allows us to "incorporate by reference" the information we
file with them, which means that we can disclose important information to you
by referring you to those documents. The information incorporated by reference
is considered to be part of this prospectus, and later information that we file
with the Commission will automatically update and supersede this information.
We incorporate by reference the documents listed below and any future filings
made with the Commission under Section 13(a), 13(c), 14 or 15(d) of the
Exchange Act until the selling stockholder has sold all of the shares:
* Annual Report on Form 10-K for the fiscal year ended September 30, 1998;
* Quarterly Report on Form 10-Q for the fiscal quarter ended December 31,
1998;
* the description of the Class A Common Stock set forth in our Registration
Statement on Form 8-A filed with the Commission on July 8, 1988 as
amended by Form 8-A/A filed July 25, 1988.
You may request a copy of these filings, at no cost, by writing or
telephoning us at the following address and telephone number:
Bayou Steel Corporation
Attention: Richard J. Gonzalez
P.O. Box 5000
LaPlace, Louisiana 70069-1156
Telephone (504) 652-4900.
This prospectus is part of a registration statement we filed with the
Commission. You should rely only on the information incorporated by reference
or provided in this prospectus or any prospectus supplement. We have not
authorized anyone else to provide you with different information. The selling
stockholder will not make an offer of these shares in any state where such an
offer is not permitted. You should not assume that the information in this
prospectus or any prospectus supplement is accurate as of any date other than
the date on the front of such documents.
<PAGE>
NOTICE REGARDING FORWARD-LOOKING STATEMENTS
Information contained in or incorporated by reference into this
prospectus may constitute "forward-looking" statements. As such, these
statements may involve known and unknown risks, uncertainties and other factors
that may cause our actual results to be materially different from the
anticipated future results expressed or implied by such forward-looking
statements. Such forward-looking statements may include, without limitation,
statements with respect to our anticipated future performance, financial
position and liquidity, growth opportunities, business and competitive outlook,
demand for products, business strategies, and other similar statements of
expectations or objectives. These statements are highlighted by words such as
"expects," "anticipates," "intends," "plans," "believes," "projects," "seeks,"
"estimates," "should" and "may," and variations thereof and similar
expressions. A number of important factors could, individually or in the
aggregate, cause actual results to differ materially from those included in the
forward-looking statements including, without limitation, the following:
* changes in the price of supplies, power, natural gas, or purchased
billets;
* changes in the selling price of our finished products or the purchase
price of steel scrap;
* changes in supply due to imports or new capacity and changes in demand
due to economic conditions;
* weather conditions in the market area of the finished product
distribution;
* changes in production technology;
* unplanned equipment outages;
* internal and external year 2000 compliance matters and the impact
that the potentially pervasive year 2000 issue may have on overall
financial market conditions; and
* changes in the laws affecting labor, employee benefit costs and
environmental and other governmental regulations.
See "Risk Factors." Due to these uncertainties, you are cautioned not to place
undue reliance upon our forward-looking statements, which speak only as of the
date hereof. We undertake no obligation to update or revise any of our
forward-looking statements.
RISK FACTORS
You should carefully consider, among other factors, the matters described
below before purchasing any shares of Class A Common Stock. This list of
factors is not exhaustive.
CYCLICAL INDUSTRY AND ECONOMIC CONDITIONS -- OUR INDUSTRY IS SUBJECT TO
CYCLICAL INFLUENCES AND IS ALSO HIGHLY SENSITIVE TO GENERAL ECONOMIC
CONDITIONS.
Demand for most of our products is cyclical in nature and sensitive to
general economic conditions. The steel industry is affected by economic
conditions generally, and future economic downturns may adversely affect our
company. The merchant bar and light structural shape product market is
influenced by trends primarily in the fabricated metal products, machinery,
construction and transportation equipment industries.
COMPETITION -- THE HIGH LEVEL OF COMPETITION IN OUR INDUSTRY MAY ADVERSELY
AFFECT OUR OPERATING RESULTS.
We compete with a number of domestic minimills. The domestic minimill steel
industry is characterized by vigorous competition with respect to price,
quality and service. In addition, the domestic minimill steel industry has
from time to time experienced excess production capacity, which reinforces
competitive product pricing and results in continued pressures on industry
profit margins. The high fixed costs of operating a steel minimill encourage
minimill operators to maintain high levels of output, regardless of demand
levels, which increases the downward pressures on selling prices.
Technological advancements also affect competition in the domestic minimill
steel industry by increasing the efficiency and productivity of their plants
and labor force. Several of our competitors have financial resources
substantially greater than those available to us.
Recently, foreign steel producers have begun to compete significantly with
us in the domestic market for structural and merchant bar shape sales as a
result of changes in currency exchange rates and increased steel subsidies by
foreign governments. This additional competition could adversely affect our
operating results.
FLUCTUATIONS IN RAW MATERIAL AND ENERGY COSTS -- OUR PROFITABILITY COULD BE
ADVERSELY AFFECTED IF WE ARE UNABLE TO RECOVER HIGHER RAW MATERIAL COSTS.
The market for steel scrap, the principal raw material used in our
operations, is highly competitive and its price volatility is influenced by
many factors, including:
* periodic shortages,
* freight costs,
* speculation by scrap brokers,
* scrap export demand,
* other market conditions largely beyond our control,
* weather
Generally, increases in finished steel prices lag behind increases in steel
scrap prices, and competition has sometimes restricted the ability of minimill
producers to raise prices to recover higher raw material costs. Although we
purchase steel scrap from a number of dealers in different markets and are not
dependent on any single supplier, our profitability would be adversely affected
to the extent we are unable to pass on higher raw material costs to our
customers.
Our manufacturing process also consumes substantial volumes of electricity
and natural gas. A significant increase in our electricity costs or in the
price of natural gas would adversely affect our profitability if we were unable
to pass such higher energy costs on to our customers.
UNIONIZED LABOR FORCE -- THERE IS NO ASSURANCE THAT FUTURE COLLECTIVE
BARGAINING AGREEMENTS WILL BE COMPARABLE TO THOSE IN EFFECT TODAY.
Approximately 320 employees at our Louisiana facility are covered under a
collective bargaining agreement with the United Steelworkers of America (the
"USWA") that expires in 2002, and approximately 95 employees at our Tennessee
facility are covered under a collective bargaining agreement with the USWA that
expires in 2004. There can be no assurance that any future collective
bargaining agreements with any labor unions will contain terms comparable to
the terms contained in the existing collective bargaining agreements. Further,
although our current relationship with the USWA is stable, the USWA has
conducted a strike at one of our facilities in the past and we cannot assure
you that similar action will not occur in the future.
COST OF COMPLIANCE WITH ENVIRONMENTAL REGULATIONS -- THE NATURE OF OUR INDUSTRY
SUBJECTS US TO NUMEROUS ENVIRONMENTAL LAWS AND REGULATIONS, AND EXPOSES US TO
RELATED LIABILITY AND COMPLIANCE COSTS THAT COULD BE POTENTIALLY SIGNIFICANT.
Like others in the industry, our minimill is required to control the
emission of dust from its electric arc furnaces that contains lead, cadmium,
and chromium, which are considered hazardous. We are subject to various
Federal, state and local laws and regulations, including, among others, the
Clean Air Act, the 1990 amendments to the Clean Air Act (the "1990
Amendments"), the Resource Conservation and Recovery Act, the Clean Water Act
and the Louisiana Environmental Quality Act, and the regulations promulgated in
connection therewith, concerning the discharge of contaminants which may be
emitted into the air and discharged into the waterways, and the disposal of
solid and/or hazardous waste such as electric arc furnace dust (collectively,
"Environmental Laws").
In the event of a release or discharge of a hazardous substance to certain
environmental media, we could be responsible for the costs of remediating the
contamination caused by such a release or discharge. During fiscal 1997, the
United States Public Interest Research Group ("USPIRG") filed a lawsuit in
Louisiana against us for alleged violations of air quality regulations. USPIRG
is asking the court to award it appropriate legal fees and to assess
appropriate penalties against us.
Our company plans to close two storm-water retention ponds at the Louisiana
facility's minimill. We have conducted limited analysis of the effluents of
these ponds, and although this analysis has indicated that there is a limited
potential for contamination, we do not believe that future remediation costs,
if any, will be material. The Louisiana Department of Environmental Quality
("LDEQ") has approved a sampling plan to analyze the contents of the pond
sediments which could indicate a greater level of contaminants than suggested
by our limited testing. In such case, the costs of clean up could be higher
than we now believe. Until such sampling is completed, however, it is
impossible to estimate such costs.
TVSC, the prior owners of our Tennessee facility, had entered into a Consent
Agreement and Order (the "TVSC Consent Order") with the Tennessee Department
of Environment and Conservation under its voluntary clean-up program. Our
company, in acquiring the assets of TVSC, has entered into a Voluntary Consent
Agreement and Order (the "Bayou Steel Consent Order") with the Tennessee
Department of Environment and Conservation. The Bayou Steel Consent Order is
supplemental to the previous TVSC Consent Order and does not affect the
continuing validity of the TVSC Consent Order. The ultimate remedy and clean-up
goals will be dictated by the results of human health and ecological risk
assessment which are components of a required, structured investigative,
remedial, and assessment process. The definitive asset purchase agreement
between our company and TVSC provided for certain funds to be applied to costs
incurred by us for activities pursuant to the TVSC Consent Order. As of January
31, 1999, investigative, remedial, and risk assessment activities have resulted
in expenses of approximately $1.3 million. There is approximately $0.6 million
remaining to complete the remediation. Although the funds appear to be
sufficient, we cannot assure you that unexpected work, which may exceed the
remaining funds, will not be required.
Environmental Laws have been enacted, and may in the future be enacted, to
create liability for past actions that were lawful at the time taken, but that
have been found to affect adversely the environment and to create rights of
action for environmental conditions and activities. Under some federal
legislation (sometimes referred to as "Superfund" legislation) a company that
has sent waste to a third party disposal site or elsewhere could be held liable
for some portion or all the cost of remediating such site regardless of fault
or the lawfulness of the original disposal activity and also for related
damages to natural resources. Many states, including Georgia, have enacted
similar legislation. We have been advised by the Georgia Department of Natural
Resources that we are a responsible party to a site where clean up costs have
been and are being expended. We have never used the site. It is alleged
that the predecessor corporation to TVSC generated materials that were
reportedly disposed at the site. We believe we have meritorious defenses to
these charges.
Our future expenditures for installation of environmental control facilities
are difficult to predict. Environmental legislation, regulations and related
administrative policies are continuously modified. Environmental issues are
also subject to differing interpretations by the regulated community, the
regulating authorities and the courts. Consequently, it is difficult to
forecast expenditures needed to comply with future regulations. Furthermore,
you cannot be sure:
* that we will not incur material environmental liabilities in the
future; or
* that future compliance with Environmental Laws (whether those
currently in effect or enacted in the future) will not require us to make
additional expenditures or changes to our current operations.
Any of these possibilities could have a material adverse effect on our
company's competitive position, results of operations and financial condition.
CONTROL BY CLASS B STOCKHOLDER -- MAJOR CORPORATE TRANSACTIONS CANNOT BE
EFFECTED WITHOUT THE CONSENT OF THE CLASS B STOCKHOLDER.
Bayou Steel Properties Limited ("BSPL") owns 100% of the Class B Common
Stock of our company and has the voting power to elect approximately 60% of our
Board of Directors, which will entitle BSPL to elect four of the seven
directors on the Board of Directors, and to cast a maximum of 60% of the votes
on all other matters. Howard M. Meyers, through his control of the corporate
general partner of BSPL, controls BSPL and thus, through BSPL, controls our
company. Our Restated Certificate of Incorporation requires at least 80%
approval of the Class A Common Stock, Class B Common Stock and Class C Common
Stock, voting as a single class, for certain major corporate transactions, such
as mergers or sales of assets in excess of 20% of our net worth. As a result,
the holders of the Class A Common Stock cannot effect a change of control of
our company without the consent of the holder of the Class B Common Stock. In
addition; prior to making any acquisition involving the issuance of additional
shares of our company's capital stock, the holder of the Class B Common Stock
would consider the effect such resulting dilution would have on such holder.
POTENTIAL RESTRICTIONS ON USE OF NET OPERATING LOSS CARRYFORWARD -- THIS
OFFERING, IF COMBINED WITH FUTURE TRANSACTIONS, COULD RESULT IN THE LIMITATION
OF OUR USE OF NET OPERATING LOSS CARRYFORWARDS.
As of September 30, 1998, for tax purposes, we had net operating loss
carryforwards ("NOLs") of approximately $220 million available to utilize
against regular taxable income. Under section 382 of the Internal Revenue Code
of 1986 (the "Code"), our use of any NOL would be limited if there is an
increase of more than 50 percentage points in the ownership interests of
certain current or future stockholders of our company within a three-year
period. The issuance of shares of Class A Common Stock in this offering is
insufficient to result in the application of the section 382 limitation.
However, if combined with future transactions, over which we may or may not
have control, it may produce an ownership change sufficient to result in our
NOLs becoming subject to the annual limitations of section 382. Such a
transaction could include the issuance of additional shares of our capital
stock in connection with an acquisition or otherwise. We have attempted to
limit this risk by providing that neither the Class A Common Stock nor the
Class B Common Stock may be transferred to a person who directly or indirectly
owns, or who as a result of such a transfer would own, common stock with a
fair market value equal to 5% or more of the aggregate fair market value of
the outstanding shares of Class A Common Stock.
SPECIAL CHARTER RESTRICTION ON TRANSFER -- CHARTER PROVISIONS MAY PRECLUDE A
TAKEOVER OF OUR COMPANY WITHOUT THE CONSENT OF OUR BOARD OF DIRECTORS.
Our Restated Certificate of Incorporation provides that Class A Common
Stock and Class B Common Stock may not be transferred to a person who owns, or
who as a result of such a transfer would own, common stock with a fair market
value equal to 5% or more of the fair market value of the outstanding shares of
Class A Common Stock. This restriction on transfer does not apply if the
transfer is approved by:
* a vote of all of the directors elected by the holders of Class A
Common Stock and all those elected by the Class B Common Stock, or
* a simple majority of the directors if directors are no longer
elected by class voting.
This restriction on transfer will terminate upon the earlier of:
(1) the date when our existing NOL has expired, or
(2) the date when our NOL becomes subject to the limitations of section
382 of the Code.
Although the purpose of such restriction on transfer is to protect our use of
our NOL, an effect of such restriction is to preclude any takeover of our
company without the consent of our Board of Directors.
LIQUIDITY -- YOU CANNOT BE SURE THAT A MORE ACTIVE MARKET FOR OUR CLASS A
COMMON STOCK WILL DEVELOP.
Our Class A Common Stock has often experienced low daily trading volumes
and there can be no assurance that a more active trading market for the Class A
Common Stock will develop or, if developed, will be sustained. The need to
liquidate a large block of stock could adversely affect stock prices.
Consequently certain potential investors may be deterred from purchasing our
Class A Common Stock.
ABOUT OUR COMPANY
Bayou Steel is a leading producer of light structural shapes and merchant
bar steel products. Bayou Steel owns and operates a steel minimill and a
stocking warehouse located on the Mississippi River in LaPlace, Louisiana (the
"Louisiana facility"), three additional stocking locations accessible to our
Louisiana facility through the Mississippi River waterway system, and a rolling
mill and stocking warehouse in Harriman, Tennessee (the "Tennessee
facility"). We produce light structural and merchant bar steel products
ranging in size from three to eight inches at our Louisiana facility and
merchant bar products ranging from one-half to four inches at our Tennessee
facility. We estimate that we currently have aggregate annual steel melting
capacity of approximately 650,000 tons and finished product rolling capacity
aggregating approximately 775,000 tons, with approximately 550,000 tons at our
Louisiana facility and approximately 225,000 tons at our Tennessee facility,
depending on the product mix.
Our Louisiana facility, which was constructed in 1981 at a cost of $243
million, is a minimill consisting of an electric arc furnace, a rolling mill,
climate controlled warehouse facilities, and a deep-water dock on the
Mississippi River. A "minimill" is a relatively low-cost steel production
facility which uses steel scrap rather than iron ore as its basic raw material.
In general, minimills recycle scrap using electric arc furnaces, continuous
casters, and rolling mills. Our Louisiana facility's minimill includes a Krupp
computer-controlled, electric arc furnace utilizing water-cooled sidewalls and
roof, two Voest-Alpine four-strand continuous casters, a computer supervised
Italimpianti reheat furnace, and a 15-stand Danieli rolling mill.
Our Tennessee facility was acquired and re-started by our company in July
1995 following our purchase of substantially all of the assets of the Tennessee
Valley Steel Company ("TVSC"). The rolling mill at our Tennessee facility
includes a computer supervised reheat furnace, a 16-stand rolling mill and
automated straightening, continuous cut-to-length, stacking and bundling
equipment. Since the acquisition, we have retrained the workforce, improved the
profitability of the product mix, enhanced operational efficiencies and
increased capacity utilization.
We purchase most of our scrap in the open market from a large number of
steel scrap dealers, although we also operate an automobile shredder to produce
some of the scrap used in our operations. At our Louisiana facility, we use
steel scrap to produce finished steel in a variety of shapes, including angles,
flats, channels, standard beams, and wide flange beams. At our Tennessee
facility, we roll billets to produce merchant bar products, including angles,
flats, rounds, and squares, and we also have the capability to produce rebar.
The merchant bar product mix of our Tennessee facility extends and complements
our Louisiana facility product line. Our products are used for a wide range of
commercial and industrial applications.
The location of our production and distribution facilities allows us to
serve customers across a wide geographic area, including our primary markets in
the Southeast, the lower Midwest, the Northeast, the Mid-Atlantic and the
Appalachian states. We also sell to customers in the West Coast region, Canada,
Mexico and other overseas locations. We sell our products to over 550
customers, the majority of which are steel service centers, in 42 states,
Canada and Mexico.
Bayou Steel is a Delaware corporation, and the mailing address of our
executive offices is 138 Highway 3217, LaPlace, Louisiana 70068. Our telephone
number is (504) 652-4900.
<PAGE>
USE OF PROCEEDS
We will not receive any proceeds from the sales of shares by the selling
stockholder.
SELLING STOCKHOLDER
All 822,422 shares being offered pursuant to this Prospectus will be
issued to Rice Partners II, L.P. upon exercise of a warrant to purchase Class A
Common Stock for $.01 per share. We issued the warrant to the selling
stockholder in connection with its purchase of Preferred Stock of the company.
As of the date of this Prospectus the selling stockholder did not own any shares
of Class A Common Stock other than the shares offered pursuant to this
Prospectus. After completion of this offering it will not own any shares of
Class A Common Stock. Jeffrey P. Sangalis, a Vice President and managing
director of Rice Partners II, L.P., is a member of our company's Board of
Directors. The Preferred Stock and Warrant Purchase Agreement pursuant to which
the selling stockholder acquired the preferred stock and warrant of our company
allow it to designate a director to the Board. According to the terms of the
Preferred Stock and Warrant Purchase Agreement, once the selling stockholder
ceases to own any shares of Preferred Stock and less than 25,000 shares of
Class A Common Stock issued pursuant to the exercise of the warrant, the selling
stockholder will no longer be entitled to designate a director to the Board. We
redeemed all of the Preferred Stock held by the selling stockholder on June 22,
1998.
PLAN OF DISTRIBUTION
The selling stockholder may offer and sell the shares from time to time
in ordinary brokerage transactions on the American Stock Exchange or any other
principal securities exchange on which the Class A Common Stock is then trading
at the prices prevailing at the time of such sales. Brokers executing orders
are expected to charge normal commissions. We will pay all expenses of
preparing and reproducing this Prospectus and the selling stockholder will pay
all brokerage commissions. In connection with the sales, the selling
stockholder and any brokers participating in such sales may be deemed to be
underwriters within the meaning of the Securities Act.
VOTING RIGHTS
Except as to certain matters on which holders of the Class B Common Stock
and the holders of the Class C Common Stock have class voting rights, the
holders of the Class A Common Stock, together with the holders of the Class C
Common Stock, are entitled to one vote per share and in the aggregate 40% of
the votes eligible to be cast for all matters other than the election of
directors. The holders of the Class B Common Stock are entitled to 60% of the
votes eligible to be cast for all matters other than the election of directors.
Certain transactions, such as the sale or acquisition of assets that exceed 20%
of the company's consolidated net worth (as determined in accordance with our
company's certificate of incorporation) require the consent of stockholders
representing 80% of the votes that may be cast.
The holders of the Class A Common Stock have the right to elect, as a
class, that number of directors which represents 40% of the number of directors
then comprising the Board of Directors and the holders of the Class B Common
Stock have the right to elect, as a class, that number of directors which
represents 60% of the number of directors then comprising the Board of
Directors. Except as set forth below, the holders of the Class C Common Stock
are not entitled to elect directors. So long as the Class A Common Stock is
listed on the American Stock Exchange, if the number of shares of Class B
Common Stock outstanding is less than 12.5% of the aggregate number of
outstanding shares of Common Stock, the holders of the Class A Common Stock
will, in addition to the voting rights discussed above, be entitled to vote as
a class with the Class B Common Stock for the election of the remaining 60% of
the Board of Directors, with the holders of the Class A Common Stock entitled
to one vote per share and the holders of the Class B Common Stock entitled to
ten votes per share. In the event that Howard M. Meyers is no longer Chief
Executive Officer of the company or more than 1,362,676 shares (as adjusted) of
Class B Common Stock have been converted into Class A Common Stock, the holders
of the Class A, Class B and Class C Common Stock will vote together, as a
single class, in the election of directors and will be entitled to one vote per
share. The holders of Class B Common Stock have the option to convert all or
any portion of their shares of Class B Common Stock into shares of Class A
Common Stock at any time at the rate of one share of Class A Common Stock for
one share of Class B Common Stock.
With certain limited exceptions, in the absence of the full approval of
the Board of Directors of the company and the delivery of an opinion of counsel
to the effect that the company will not lose the benefits of its NOLs, until
December 31, 2003, transfers of shares of Class A Common Stock or Class B
Common Stock will be null and void insofar as such transaction would cause the
transferee to attain 5% ownership of the fair market value of the company's
Class A Common Stock or if such transferee owned Class A or Class B Common
Stock with a fair market value equal to 5% or more of the fair market value of
the company's outstanding shares of Class A Common Stock. In addition, except
for transfers to or for the benefit of direct or indirect beneficial owners of
Class B Common Stock, or the immediate family thereof, or transactions approved
by the holders of 75% of the then outstanding Class A Common Stock, shares of
Class B Common Stock are transferable only upon conversion of such shares into
shares of Class A Common Stock. Moreover, pursuant to an agreement executed
between the company, BSPL and Howard M. Meyers immediately prior to the 1988
public offering of the Class A Common Stock, if any entity acquires within a
four-year period a percentage of the voting power of BSPL in excess of 50% (the
"Percentage"), such entity shall agree to purchase through a public tender
offer a number of shares of Class A Common Stock equal to the total number of
outstanding shares of Class A Common Stock multiplied by the Percentage,
subject to certain exceptions.
The shares of common stock of BSPL owned by Mr. Howard M. Meyers may not
be sold, nor may shares of BSPL be issued, at a price which represents a
premium attributable to the underlying Class B Common Stock over the market
price of the Class A Common Stock, to any person or group if such sale, when
aggregated with all prior sales during the immediately preceding four-year
period, would result in such person or group owning more than 50% of the common
stock of BSPL, unless such person or group agrees to make a tender offer within
30 days for an equivalent percentage of Class A Common Stock at the highest
price paid by such person or group (expressed in equivalent shares of Class B
Common Stock) for the shares of common stock of BSPL; provided that the
Directors elected by the holders of the Class A Common Stock waive the charter
restriction prohibiting a purchaser from acquiring 5% or more of the aggregate
fair market value of the Class A Common Stock. The agreement terminates when
the holders of the Class B Common Stock no longer have the right to elect a
majority of the Board of Directors of the company.
The company's Restated Certificate of Incorporation provides that if the
company issues additional shares of Class A Common Stock, the holders of Class
B Common Stock have the right to purchase additional shares of Class B Common
Stock in such amount as is necessary to maintain after the issuance of such
Class A Common Stock the ratio that the number of shares of Class B Common
Stock bears to the aggregate number of shares of Common Stock outstanding
immediately prior to the issuance. The consideration payable for such
additional shares of Class B Common Stock must equal the fair market value of
the consideration per share being paid for the Class A Common Stock being
issued.
The company's Certificate of Incorporation provides that if Mr. Meyers
resigns, retires or is removed for cause as Chief Executive Officer of the
company, the Class B Common Stock will no longer vote separately by class with
respect to the election of directors, and will only have one vote per share.
LEGAL MATTERS
Our law firm, Jones, Walker, Waechter, Poitevent, Carrere &
Denegre, L.L.P., New Orleans, Louisiana, will issue an opinion about the
legality of the shares for us and for the selling stockholder.
EXPERTS
The audited consolidated balance sheets of the company as of September
30, 1998 and 1997 and the related consolidated statements of operations,
changes in equity and cash flows for each of the years in the three-year
period ended September 30, 1998, and the financial statement schedules
incorporated by reference in this Registration Statement, have been audited by
Arthur Andersen LLP, independent public accountants, as indicated in their
reports with respect thereto, and are incorporated by reference herein in
reliance upon the authority of such firm as experts in accounting and auditing
in giving such reports.
<PAGE>
No one (including any
dealer, salesman or broker)
is authorized to provide oral BAYOU
or written information about STEEL
this offering that is not CORPORATION
included in this Prospectus.
_______________
TABLE OF CONTENTS PROSPECTUS
PAGE
WHERE YOU CAN FIND MORE
INFORMATION 2
NOTICE REGARDING FORWARD- CLASS A COMMON STOCK
LOOKING STATEMENTS 3 ($.01 PAR VALUE)
RISK FACTORS 3
ABOUT OUR COMPANY 7
USE OF PROCEEDS 8 MARCH 22, 1999
SELLING STOCKHOLDER 8
PLAN OF DISTRIBUTION 8
VOTING RIGHTS 8
LEGAL MATTERS 9
EXPERTS 9
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The estimated fees and expenses payable by the Registrant in connection
with the issuance and distribution of the Common Stock registered hereunder are
as follows:
Securities and Exchange Commission
registration fee $ 844
American Stock Exchange Filing fee 16,448
Printing fees and expenses 0
Legal fees and expenses 5,000
Accounting fees and expenses 5,000
Miscellaneous $ 208
--------
Total $ 27,500
--------
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 145 of the General Corporation Law of the State of Delaware
empowers a corporation to indemnify any person who was or is a party or is
threatened to be made a party to any threatened, pending or completed action,
suit or proceeding, whether civil, criminal, administrative or investigative,
by reason of the fact that he is or was a director, officer, employee or agent
of the corporation or serves or served in these capacities for another
enterprise, if serving at the request of the corporation. Depending on the
character of the proceeding, a corporation may indemnify against expenses
(including attorneys' fees), judgments, fines and amounts paid in settlement
actually and reasonably incurred in connection with such action, suit or
proceeding if the person indemnified acted in good faith and in a manner
reasonably believed to be in or not opposed to the best interest of the
corporation, and, with respect to any criminal action or proceeding, had no
reasonable cause to believe his conduct was unlawful. In the case of an action
by or in the right of the corporation, no indemnification may be made in
respect to any claim, issue or matter as to which such person shall have been
adjudged to be liable to the corporation unless and only to the extent that the
Court of Chancery or the court in which such action or suit was brought shall
determine that despite the adjudication of liability such person is fairly and
reasonably entitled to indemnity for such expenses which the court shall deem
proper. Section 145 further provides that to the extent a director or officer
of a corporation has been successful in the defense of any action, suit or
proceeding referred to above or in the defense of any claim, issue or matter
therein, he shall be indemnified against expenses (including attorneys' fees)
actually and reasonably incurred by him in connection therewith.
Section 13 of the Company's Restated Certificate of Incorporation
provides that the Company shall provide indemnification to the fullest extent
permitted by Delaware law.
Under an insurance policy maintained by the Company, the directors and
officers of the Company are insured, within the limits and subject to the
limitations of the policy, against certain expenses in connection with the
defense of certain claims, actions, suits or proceedings, and certain
liabilities which might be imposed as a result thereof, which may be brought
against them by reason of their being or having been directors and officers.
ITEM 16. EXHIBITS.
4.1 - Restated Certificate of Incorporation of the Company (filed with
the Commission as Exhibit 3.1 to the Company's Form 10-Q
Quarterly Report for the quarter ended March 31, 1996, and
incorporated herein by reference).
4.2 - Restated By-laws of the Company, as amended (filed as Exhibit 3.2
to the Company's Form 10-Q Quarterly Report for the quarter ended
March 31, 1996, and incorporated herein by reference).
4.3 - Specimen of Class A Common Stock certificate (filed as Exhibit
4.1 to the Company's Registration Statement on Form S-1
(Registration No. 33-22603), and incorporated herein by
reference).
4.4 - Indenture, dated May 22, 1998, between the Company, Bayou Steel
Corporation (Tennessee), River Road Realty Corporation and First
National Bank of Commerce, as trustee (filed as Exhibit 4.1 to
the Company's Registration Statement on Form S-4 (No. 333-58263),
and incorporated herein by reference).
5 - Opinion of Jones, Walker, Waechter, Poitevent, Carrere &
Denegre, L.L.P.
23.1 - Consent of Arthur Andersen LLP.
23.2 - Consent of Jones, Walker, Waechter, Poitevent, Carrere &
Denegre, L.L.P. (included in Exhibit 5).
24 - Power of Attorney (included in the Signature Page to this
Registration Statement).
____________________
ITEM 17. UNDERTAKINGS.
(a) The Registrant 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;
(ii) To reflect in the prospectus any facts or events arising
after the effective date of this 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 this registration statement;
notwithstanding the foregoing, any increase or decrease in volume
of securities offered (if the total dollar value of securities
offered would not exceed that which was registered) and any
deviation from the low or high end of the estimated maximum
offering range may be reflected in the form of prospectus filed
with the Commission pursuant to Rule 424(b) if, in the aggregate,
the changes in volume and price represent no more than a 20% change
in the maximum aggregate offering price set forth in the
"Calculation of Registration Fee" table in the effective
registration statement;
(iii) To include any material information with respect to the
plan of distribution not previously disclosed in this registration
statement or any material change to such information in this
registration statement;
(2) Provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do
not apply if the information required to be included in a post-effective
amendment by those paragraphs is contained in periodic reports filed with
or furnished to the Commission by the registrant pursuant to Section 13
or Section 15(d) of the Securities Exchange Act of 1934 that are
incorporated by reference in this registration statement.
(3) 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.
(4) 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.
(b) The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
Company'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 this
registration statement shall be deemed to be a new registration statement
relating to the securities offered herein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
(c) 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 described under
Item 18, 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, 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 its 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.
<PAGE>
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 LaPlace, State of Louisiana, on March 3, 1999.
BAYOU STEEL CORPORATION
By: /S/ HOWARD M. MEYERS
Howard M. Meyers
Chairman of the Board and Chief
Executive Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
immediately below constitutes and appoints Howard M. Meyers and Richard J.
Gonzalez, and each of them acting individually, his true and lawful attorney-
in-fact and agent, with full power of substitution, for him and in his name,
place and stead, in any and all capacities, to sign any and all amendments
(including post-effective amendments) to this Registration Statement, 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 agent full power and authority to do and perform each and
every act and thing requisite and necessary to be done, as fully to all intents
and purposes as he might or could do in person, hereby ratifying and confirming
all that said attorney-in-fact and agent or his substitute or substitutes may
lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
<S> <C> <C>
/S/ HOWARD M. MEYERS Chairman of the Board, Chief
Howard M. Meyers Executive Officer and Director March 3, 1999
/S/ JERRY M. PITTS President, Chief Operating
Jerry M. Pitts Officer and Director March 3, 1999
/S/ RICHARD J. GONZALEZ Vice President, Chief Financial
Richard J. Gonzalez Officer, Treasurer and Secretary March 3, 1999
/S/ LAWRENCE E. GOLUB Director
Lawrence E. Golub March 3, 1999
/S/ MELVYN N. KLEIN Director
Melvyn N. Klein March 3, 1999
/S/ ALBERT P. LOSPINOSO Director
Albert P. Lospinoso March 3, 1999
/S/ STANLEY S. SHUMAN Director
Stanley S. Shuman March 3, 1999
/S/ JEFFREY P. SANGALIS Director
Jeffrey P. Sangalis March 3, 1999
</TABLE>
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
SEQUENTIALLY
EXHIBIT NUMBERED
NUMBER DESCRIPTION PAGE
<S> <C> <C>
4.1 Restated Certificate of Incorporation of the Company (filed with
the Commission as Exhibit 3.1 to the Company's Form 10-Q Quarterly
Report for the quarter ended March 31, 1996, and incorporated
herein by reference).
4.2 Restated By-laws of the Company, as amended (filed as Exhibit 3.2
to the Company's Form 10-Q Quarterly Report for the quarter ended
March 31, 1996, and incorporated herein by reference).
4.3 Specimen of Class A Common Stock certificate (filed as Exhibit 4.1
to the Company's Registration Statement on Form S-1 (Registration
No. 33-22603), and incorporated herein by reference).
4.4 Indenture, dated May 22, 1998, between the Company, Bayou Steel
Corporation (Tennessee), River Road Realty Corporation and First
National Bank of Commerce, as trustee (filed as Exhibit 4.1 to the
Company's Registration Statement on Form S-4 (No. 333-58263), and
incorporated herein by reference).
5 Opinion of Jones, Walker, Waechter, Poitevent, Carrere & Denegre,
L.L.P.
23.1 Consent of Arthur Andersen LLP.
23.2 Consent of Jones, Walker, Waechter, Poitevent, Carrere & Denegre,
L.L.P. (included in Exhibit 5).
24 Power of Attorney (included in the Signature Page to this
Registration Statement).
</TABLE>
____________________
JONES, WALKER
WAECHTER, POITEVENT
CARRERE & DENEGRE, L.L.P.
March 22, 1999
Bayou Steel Corporation
P.O. Box 5000
LaPlace, LA 70069-1157
Re:
Gentlemen:
We have acted as your counsel in connection with the preparation of
the registration statement on Form S-3 (the "Registration Statement") filed
by Bayou Steel Corporation (the "Company") with the Securities and Exchange
Commission (the "Commission"), on the date hereof, covering the sale
from time to time by the selling stockholder named in the Registration
Statement of up to 822,422 shares of Class A Common Stock, $.01 par value
per share of the Company (the "Shares") issuable upon the exercise of an
outstanding warrant to purchase Class A Common Stock (the "Warrant").
In so acting, we have examined originals, or photostatic or certified
copies, of such records of the Company, certificates of officers of the
Company and of public officials, and such other documents as we have deemed
relevant. In such examination, we have assumed the genuineness of all
signatures, the authenticity of all documents submitted to us as originals,
the conformity to original documents of all documents submitted to us as
certified or photostatic copies and the authenticity of the originals of
such documents.
Based upon the foregoing, we are of the opinion that when issued to
the selling stockholder upon the exercise of the Warrant in accordance with
the Preferred Stock and Warrant Purchase Agreement (including the payment
of the exercise price specified therein), the Shares issuable upon exercise
of the Warrant will be duly authorized, validly issued, fully paid and non-
assessable.
We consent to the filing of this opinion as an exhibit to the
Registration Statement and to the reference to us in the prospectus
included therein under the caption "Legal Matters." In giving this
consent, we do not admit that we are within the category of persons whose
consent is required under Section 7 of the Securities Act of 1933, as
amended, or the general rules and regulations of the Commission promulgated
thereunder.
Very truly yours,
Jones, Walker, Waechter, Poitevent,
Carrere & Denegre, L.L.P.
By: /S/ LISA M. BUCHANAN
Lisa M. Buchanan
EXHIBIT NO. 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation
by reference in this Registration Statement of our reports dated November 13,
1998 included or incorporated by reference in Bayou Steel Corporation's Form
10-K for the year ended September 30, 1998 and to all references to our Firm
included in this Registration Statement.
/S/ ARTHUR ANDERSEN, LLP
ARTHUR ANDERSEN, LLP
New Orleans, Louisiana
March 17, 1999
