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
December 24, 1998
Date of Report (Date of earliest event reported)
ATC GROUP SERVICES INC.
(Exact name of registrant as specified in its charter)
Delaware 1-10583 46-0399408
(State or other jurisdiction of (Commission File No.) (IRS Employer
incorporation) Identification No.)
104 East 25th Street, Tenth Floor
New York, New York 10010
(Address of principal executive offices)
10010
(Zip code)
Registrant's telephone number, including area code: (212) 353-8280
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ATC Group Services Inc. ("the Company") is currently in discussions
with the lenders under its senior secured credit facility regarding the waiver
of existing events of default under such facility. These events of default are a
result of the failure to be in compliance with certain financial covenants
contained in such credit facility. Any such waiver would cure the existing
default under the indenture relating to the Company's senior subordinated notes.
In addition, the Company is also discussing with such lenders certain amendments
to these financial covenants to provide additional flexibility in the future.
The Company is also discussing with such lenders under what circumstances they
would be willing to increase the availability of revolving credit under the
existing working capital sublimit. Any such increase would require that the
current acquisition sublimit be reduced to zero. The Company anticipates that
the lenders will require that certain other amendments be made in the senior
secured credit facility as a condition to any such amendment, waiver or
agreement to increase availability. Among other things, the lenders under the
senior secured credit facility are requiring that the Company's principal
shareholder, its affiliates or new investors either invest new equity into the
Company or purchase outstanding senior subordinated notes and waive any cash
interest payments on such notes.
There can be no assurance that the Company will be able to reach any
agreement with the lenders under its senior secured credit facility regarding a
waiver of existing events of default, an amendment to its financial covenants or
an increase in its working capital sublimit. Furthermore, to the extent any such
agreement is entered into, there can be no assurance as to what conditions
(including, with limitation, those discussed herein), would apply to such
agreement. In addition there can be no assurance that the Company's principal
shareholder, its affiliates or new investors invest any new equity or purchase
outstanding notes.
<PAGE>
* * *
This Form 8-K contains "forward-looking" statements within the meaning
of the Securities Litigation Reform Act of 1995, including, without limitation,
those concerning statements regarding negotiations with the lenders under the
Company's senior secured credit facility and the Company's principal
shareholder, its affiliates and new investors. Such statements involve certain
risks and uncertainties that could cause actual results to differ materially
from those in the forward-looking statements. Potential risks and uncertainties
include such factors as to whether or not the Company is able to reach any
agreement with the lenders under its senior secured credit facility, the final
terms and conditions of any such agreement, whether or not the Company's
principal shareholder, its affiliates or any new investor invests new equity in
the Company or purchases any senior subordinated notes and other risks described
in the Company's filings with the Securities and Exchange Commission.
<PAGE>
SIGNATURE
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.
By: /s/ Christopher P. Vincze
Name: Christopher P. Vincze
Title: Chief Operating Officer
Date: December 24, 1998
