<PAGE> 1
UNITED STATES 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) December 28, 1999
KCS ENERGY, INC.
(Exact name of registrant as specified in its charter)
Delaware 22-2889587
- -------------------------------------------------------------------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
5555 San Felipe Road, Houston, TX 77056
- -------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
(713) 877-8006
- -------------------------------------------------------------------------------
(Registrant's telephone number, including area code)
NOT APPLICABLE
- -------------------------------------------------------------------------------
(Former name, former address and former fiscal year, if changed since
last report.)
<PAGE> 2
Item 5. Other Events
On December 28, 1999, KCS Energy, Inc. issued a press release regarding
a restructuring agreement. A copy of the press release is attached hereto as
Exhibit 20.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.
(c) Exhibits.
Exhibit 20
Press release dated December 28, 1999.
<PAGE> 3
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.
KCS Energy, Inc.
January 5, 2000 /s/ Frederick Dwyer
-------------------
Frederick Dwyer
Vice President, Controller
and Secretary
<PAGE> 4
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit
Number Description
- ------- -----------
<S> <C>
20 Press release dated December 28, 1999
</TABLE>
<PAGE> 1
EXHIBIT 20
AT THE COMPANY AT THE FINANCIAL RELATIONS BOARD
- ------------------ -----------------------------------------------
James W. Christmas Marianne Stewart - General Info. (212) 661-8030
President and CEO Beth Lewis - Analyst Info. (617) 369-9240
(713) 877-8006 Claudine Cornelis - Media Info. (212) 661-8030
FOR IMMEDIATE RELEASE:
- ----------------------
December 28, 1999
KCS ENERGY, INC. REACHES RESTRUCTURING AGREEMENT
WITH NOTEHOLDERS
OBTAINS CONSENT TO AMEND 11% SENIOR NOTE INDENTURE
HOUSTON, TX, DECEMBER 28, 1999 -- KCS Energy, Inc. (NYSE: KCS) announced today
that it has reached an agreement on a restructuring with the holders of more
than two-thirds of the Company's 8.875% Senior Subordinated Notes due January
15, 2008 and more than a majority of its 11% Senior Notes due January 15, 2003.
In addition, KCS announced that the holders of its Senior Notes have agreed to
certain amendments to the governing indenture which will facilitate
implementation of the restructuring.
"We are very pleased to have such a high level of support from our noteholders
on a restructuring plan that will permit KCS to reduce total indebtedness and
obtain new financing to replace the two existing bank credit facilities," said
KCS President and Chief Executive Officer James W. Christmas. "Our agreement
also allows us to continue to pay our trade creditors in the ordinary course of
business."
Under the terms of the agreement, current shareholders will retain 100% of the
common stock on the restructuring effective date and employees and trade
creditors will continue to be paid in the ordinary course of business. Senior
Subordinated Noteholders will exchange $125 million principal amount of such
notes, together with accrued interest claims, for $46.875 million in cash and
newly issued redeemable convertible preferred stock. KCS may redeem the
preferred stock for 12 months from the effective date of the restructuring plan
as follows:
For $15.625 million if completed within 6 months of the effective date;
For $20.625 million if completed from 6 to 9 months of the effective
date; and
For $25.625 million if completed from 9 to 12 months of the effective date.
If the Company does not redeem the new preferred stock, it will be convertible
into 49.9% of the outstanding common stock, assuming full conversion of such
preferred stock.
On the effective date, Senior Noteholders will receive a cash payment for
interest due as of January 15, 2000, totaling $16.5 million. Consenting Senior
Noteholders will exchange their existing notes for new 11% Senior Notes due
January 15, 2005, which will be secured by a junior
-- MORE --
5555 San Felipe, Suite 1200, Houston, TX 77056
<PAGE> 2
KCS Energy, Inc. Reaches Restructuring Agreement with Noteholders
December 28, 1999
Page 2
lien on the Company's assets. The remaining Senior Notes will be reinstated. The
agreement also provides that KCS will receive options to repurchase at least $50
million of its new Senior Notes at $850 per $1,000 principal amount plus accrued
interest prior to July 15, 2000.
The Company is currently negotiating the terms of a new senior secured credit
facility that will replace its two current bank facilities. Under the terms of
the restructuring agreement, the Company must finalize the terms of a
satisfactory financing commitment by January 15, 2000.
To effectuate the agreement, the parties have agreed KCS will commence a case
under Chapter 11 of the Bankruptcy Code by January 18, 2000.
In addition, KCS obtained the consent of the majority of the Senior Noteholders
to amend the indenture governing the Company's 11% Senior Notes due January 15,
2003. Among other things, the amendment would permit KCS to replace its two
existing bank credit facilities with a new senior secured credit facility
providing up to $190.0 million of indebtedness, to reduce to 2.0-to-1.0 the
EBITDA (earnings before interest, taxes and DD&A) coverage ratio required for
the Company to incur additional indebtedness until March 31, 2001, and to
purchase its 8.875% Senior Subordinated Notes due January 15, 2008 and to expend
up to $26.0 million to acquire or retire the newly issued preferred stock of the
Company.
KCS is an independent energy company engaged in the acquisition, exploration,
development and production of natural gas and crude oil with operations in the
Mid-Continent and Gulf Coast regions. The Company also purchases reserves
(priority rights to future delivery of oil and gas) through its Volumetric
Production Payments (VPP) program. For more information on KCS Energy, Inc.,
please visit the Company's web site at http://www.kcsenergy.com
To receive KCS' latest news and other corporate developments via fax at no cost,
please call 1-800-PRO-INFO. Use company code KCS. See also
http://www.frbinc.com.
This press release contains forward-looking statements that involve a number of
risks and uncertainties. Among the important factors that could cause actual
results to differ materially from those indicated by such forward-looking
statements are delays and difficulties in developing currently owned properties,
the failure of exploratory drilling to result in commercial wells, delays due to
the limited availability of drilling equipment and personnel, fluctuations in
oil and gas prices, general economic conditions and the risk factors detailed
from time to time in the Company's periodic reports and registration statements
filed with the Securities and Exchange Commission.
###
5555 San Felipe, Suite 1200, Houston, TX 77056
