SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
Current Report Pursuant
to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): August 11, 1998
American Rice, Inc.
(Exact name of registrant as specified in its charter)
Texas
(State or other jurisdiction of incorporation)
0-17039 76-0231626
(Commission File Number) (I.R.S. Employer
Identification No.)
411 N. Sam Houston Parkway E.
Houston, Texas 77060
(Address of Principal (Zip Code)
Executive Offices)
(281) 272-8800
(Registrant's telephone number, including area code)
Not Applicable
(Former name or former address, if changed since last report
<PAGE>
Item 5. Other Events
American Rice, Inc. issued a press release on August 12, 1998 stating it
had filed a Chapter 11 bankruptcy petition on August 11, 1998. The
information contained in such press release is attached hereto as
Exhibit 99.
Item 7. Financial Statement and Exhibits
(c) Exhibits
Exhibit 99 - Press Release dated August 12, 1998.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Date: August 14, 1998 American Rice, Inc.
--------------------
(Registrant)
By: /s/ Joseph E. Westover
----------------------
Joseph E. Westover
Vice President and
Controller
FOR IMMEDIATE RELEASE
For Further Information:
Douglas A. Murphy
President
or
Richard N. McCombs
Executive Vice President
(281) 272 8800
AMERICAN RICE, INC. FILES CHAPTER 11
HOUSTON, TEXAS, August 12, 1998--- American Rice, Inc. ("ARI") filed
Tuesday for protection from creditors, saying it had suffered liquidity
problems as a result of events stemming from a breach of contract in
Saudi Arabia, and an inability to post a supersedeas bond of over $7
million resulting from a judgment in a Texas state court which judgment
is now on appeal. ARI, one of the largest branded rice companies in
America, filed its Chapter 11 bankruptcy petition in Corpus Christi,
Texas listing assets and liabilities of approximately $220 million. As
a part of the filing, ARI said it will sell, subject to court approval,
its olive business for approximately $45 million.
Tuesday's move by ARI does not affect any operations at the 2 U.S.
(Freeport, Texas and Maxwell, California) and the 3 overseas rice
facilities or at the 2 olive processing plants (Visalia, California, and
Seville, Spain). ARI officials said it's "business as usual" for the
company. ARI's current rice harvest activities and market deliveries
will continue uninterrupted by the company's recent court action.
Mr. Douglas Murphy, President of ARI stated, "We recognize this action
is an extraordinary step, but our decision to file Chapter 11
reorganization at this time is necessary to assure our growers of
prompt payment during this harvest season, and to assure our customers
of high quality, timely service during the upcoming holiday period."
From this day forward, under the bankruptcy code, ARI will be able to
pay 100% of its everyday obligations when they come due.
In January 1997, Rice Milling and Trading Investments ("RMTI")
terminated an agreement with ARI for supplying ARI rice through RMTI's
facility in Jeddah, Saudi Arabia. The termination of this contract,
currently a subject of a lawsuit in the U.S. District Court, Southern
District-Texas, forced ARI to spend millions of dollars creating a short
term alternative distribution system to protect its branded market.
These expenditures significantly hurt ARI's liquidity.
As part of the filing, Houston based ARI said it would sell its olive
business for approximately $45 million. The net proceeds of this
transaction will be employed to reduce debt. The sale of the olive
business is subject to court approval, but the company indicated the
sale was imminent. ARI's decision to divest its olive holdings was
based upon a desire to refocus the company on its primary business,
rice, and reduce debt.
ARI is listed under the symbol "RICEE" on the NASDAQ Small
Capitalization Market.
Safe Harbor Statement Under the Private Securities Litigation Reform Act
of 1995: Any statements set forth above that are not historical facts
are forward-looking statements that involve risks and uncertainties that
could cause actual results to differ materially from those in the
forward-looking statements. Potential risks and uncertainties include
but are not limited to such factors as product demand and development,
ability to maintain customer relationships, technological advancements,
impact of competitive products and pricing, growth in targeted markets,
risk of foreign operations, and other information detailed from time to
time in the Company's Securities and Exchange Commission filings.
