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
March 18, 1998 (March 17, 1998)
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Date of Report (Date of earliest event reported)
GEOTEK COMMUNICATIONS, INC.
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(Exact name of registrant as specified in its charter)
Delaware 0-17581 22-2358635
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(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
102 Chestnut Ridge Road, Montvale, New Jersey 07645
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (201) 930-9305
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INFORMATION TO BE INCLUDED IN THE REPORT
Item 5. Other Events.
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On March 17, 1998, Geotek Communications, Inc. (the "Company")
commenced an offer to purchase for cash, upon the terms and subject to the
conditions set forth in an Offer to Purchase dated March 17, 1998 (the "Offer to
Purchase"), up to $16,196,000 Accreted Value (as defined in the Indenture
referred to below) of the Company's 15% Senior Secured Discount Notes due 2005
(the "Notes") for a cash purchase price equal to 100% of the Accreted Value
thereof as of May 8, 1998, the date of purchase (the "Purchase Date"). The
Company made the Offer pursuant to Section 10.08 and Section 4.12 of the
Indenture, dated as of June 30, 1995 (as amended, the "Indenture"), between the
Company and IBJ Schroder Bank & Trust Company, as Trustee (the "Trustee"),
governing the Notes.
Pursuant to Section 10.08 of the Indenture, the Company is obligated
within 30 days after a Permitted Foreign Asset Sale (as defined in the
Indenture) to use not less than 20% of the net cash proceeds (the "Excess
Proceeds") from such Permitted Foreign Asset Sale to make an offer to all
holders of Notes, to be consummated not more than 40 business days thereafter,
to purchase the maximum Accreted Value of Notes, on a pro rata basis according
to the Accreted Value of the Notes tendered, that may be purchased out of the
Excess Proceeds. Section 4.12(b) of the Indenture requires that the offer price
be made in cash in an amount equal to 100% of the Accreted Value on the date
fixed for closing of such offer plus accrued and unpaid interest, if any, to the
date fixed for the closing of such offer. On February 12, 1998, the Company
consummated a Permitted Foreign Asset Sale (the "First Permitted Foreign Asset
Sale") in which the Net Cash Proceeds (as defined in the Indenture) were equal
to approximately $4,560,208, of which $912,041 constitutes Excess Proceeds. On
February 12, 1998, the Company consummated a second Permitted Foreign Asset Sale
(the "Second Permitted Foreign Asset Sale" and collectively with the First
Permitted Foreign Asset Sale, the "Permitted Foreign Asset Sales") in which the
Net Cash Proceeds were equal to approximately $76,415,305, of which $15,283,061
constitutes Excess Proceeds. The aggregate amount of Excess Proceeds from the
Permitted Foreign Asset Sales is equal to $16,195,102.
The First Permitted Foreign Asset Sale was consummated pursuant to a
purchase agreement (the "Terrafon Agreement") by and among the Company, Geotek
Communications GmbH, a German corporation and wholly-owned subsidiary of the
Company ("Geotek Germany"), O.Tel.O Communications GmbH, a German corporation
("O.tel.O"), and RegioKom Deutschland Gesellschaft fur Bundelfunkdienste mbH, a
German corporation ("RegioKom"). Pursuant to the Terrafon Agreement, Geotek
Germany sold and assigned its limited partnership interests in Terrafon
Bundelfunk GmbH & Co. KG and its shares of Terrafon Bundelfunk
Geschafts-fuhrungs Gesellschaft mbH for an aggregate purchase price equal to
DM7,000,000 (US$3,837,719), approximately DM500,000 (US$274,123) of which is
being held in escrow to satisfy Geotek Germany's indemnity obligations, if any,
under the Terrafon Agreement. As part of such transaction, Geotek Germany also
received an additional amount equal to DM2,218,842 (US$1,214,473) representing a
return of capital from O.tel.O. The portion of such amounts payable to Geotek
Germany which constitute Net Cash Proceeds is $4,560,208, of which $912,041
constitutes Excess Proceeds. The Second Permitted Foreign Asset Sale was
consummated pursuant to a purchase agreement (the "NB3 Agreement") by and among
the Company, Geotek GmbH Holding Corporation, a Delaware corporation and
wholly-owned subsidiary of the Company (the "Geotek Sub"), TIWC Holdings (UK)
Limited and Telesystem International Wireless Inc., a Canadian corporation.
Pursuant to the NB3 Agreement, Geotek Sub sold the entire issued share capital
of National Band Three Limited for an aggregate purchase price of approximately
$82,000,000, approximately $4,102,000 of which is being held in escrow to
satisfy its indemnity obligations, if any, under the NB3 Agreement. The portion
of such amounts payable to the Company which constitute Net Cash Proceeds is
$76,415,305, of which $15,283,061 constitutes Excess Proceeds.
Notes must be tendered to IBJ Schroder Bank & Trust Company pursuant to
the procedures described in the Company's Offer to Purchase prior to 5:00 p.m.,
New York City time, on May 7, 1998. Holders will have the right to withdraw
tendered Notes until 5:00 p.m., New York City time, on May 5, 1998.
All Notes properly tendered prior to 5:00 p.m., New York City time, on
May 7, 1998 and not withdrawn prior to 5:00 p.m., New York City time, on May 5,
1998 will be accepted for payment on a pro rata basis, upon the terms and
subject to the conditions of this Offer, up to an aggregate Accreted Value of
$16,196,000 (or $22,205,922 principal amount at maturity).
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.
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(c) Exhibits.
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99 Pro forma income statement setting forth
historical information which has been
adjusted to reflect the Permitted Foreign
Asset Sales and the assumed purchase of
$16,196,000 Accreted Value of Notes.
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SIGNATURE
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Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, the Registrant has duly caused this Current Report to be signed on its
behalf by the undersigned thereunto duly authorized.
GEOTEK COMMUNICATIONS, INC.
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(Registrant)
By: /s/ Robert Vecsler
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Robert Vecsler
Secretary and General Counsel
Date: March 18, 1998
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EXHIBIT INDEX
Exhibit No. Description
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99 Pro forma income statement setting forth historical information
which has been adjusted to reflect certain permitted asset sales
and the assumed purchase of $16,196,000 Accreted Value of the
Company's 15% Senior Secured Discount Notes due 2005
EXHIBIT 99 PRO FORMA FINANCIAL INFORMATION
On March 17, 1998, Geotek Communications, Inc. (the "Company")
commenced an offer to purchase for cash, upon the terms and subject to the
conditions set forth in an Offer to Purchase dated March 17, 1998 (the "Offer"),
up to $16,196,000 Accreted Value (as defined in the Indenture referred to below)
of the Company's 15% Senior Secured Discount Notes due 2005 (the "Notes") for a
cash purchase price equal to 100% of the outstanding Accreted Value thereof (the
"Purchase Price") as of May 8, 1998, the date of purchase (the "Purchase Date").
The Company made the Offer pursuant to Section 10.08 and Section 4.12 of the
Indenture, dated as of June 30, 1995 (as amended, the "Indenture"), between the
Company and IBJ Schroder Bank & Trust Company, as Trustee, governing the Notes.
The following unaudited pro forma financial information sets forth
historical information which has been adjusted to reflect certain permitted
asset sales by the Company and the assumed purchase of $16,196,000 Accreted
Value of Notes pursuant to the Offer at the Purchase Price. The pro forma income
statement information has been presented for continuing operations only as
required by the Commission pursuant to Regulation S-X and assumes the Company's
purchase of $16,196,000 Accreted Value of Notes had taken place as of the
beginning of 1997. No pro forma balance sheet information is presented. Assuming
the Company purchased the full $16,196,000 Accreted Value of Notes pursuant to
the Offer, the Company's long-term debt would be reduced by $12,956,958, with a
corresponding reduction in cash and cash equivalents. The pro forma financial
information is based on certain assumptions and estimates and, therefore, does
not purport to be indicative of the results which may be obtained in the future
or which would actually have been obtained had the transactions described above
occurred during the periods or on the dates indicated. The pro forma financial
information is qualified in its entirety by, and should be read in conjunction
with, the consolidated financial statements and other information and data
contained and incorporated in the Company's Annual Report on Form 10-K for the
year ended December 31, 1997.
Year ended
December 31, 1997
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(in thousands)
Unaudited pro forma income statement data:
Net sales.......................................... $34,201
Operating loss before interest and taxes........... (168,604)
Interest expense................................... 32,614
Loss from continuing operations.................... (196,252)
Deficiency of earnings to fixed charges............ (217,274)
