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) June 1, 1999
THE LOEWEN GROUP INC.
(Exact name of registrant as specified in its charter)
British Columbia, 0-18429 98-0121376
Canada
(Commission File (IRS Employer
(State or other Number) Identification No.)
jurisdiction of
incorporation)
4126 Norland Avenue, Burnaby, British Columbia V5G 3S8
(Address of principal executive offices) (zip code)
Registrant's telephone number, including area code 604-299-9321
N/A
(Former name or former address, if changed since last report)
Exhibit Index is on page 3
Page 1 of 6
<PAGE>
ITEM 3. BANKRUPTCY OR RECEIVERSHIP.
On June 1, 1999, The Loewen Group Inc. filed a voluntary petition
to reorganize under Chapter 11 of the U.S. Bankruptcy Code. The
Company also will file an application for creditor protection
under the Companies' Creditors Arrangement Act in Canada. In
connection with the filings, the Company's U.S. subsidiaries
obtained a commitment for up to US$200 million in debtor-in-
possession financing. See the attached press release, which is
hereby incorporated by reference, for further details.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION
AND EXHIBITS.
Exhibit No. Description
Exhibit 99 The Loewen Group Inc. Press Release dated June 1,
1999.
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.
Dated: June 1, 1999
THE LOEWEN GROUP INC.
By: /s/ Bradley D. Stam
Name: Bradley D. Stam
Title: Senior Vice President, Law
<PAGE>
EXHIBIT INDEX
Sequential
Number Exhibit Page Number
99 The Loewen Group Inc. 4
Press Release dated June 1, 1999
THE LOEWEN GROUP INC.
(NYSE, TSE, ME: LWN) NEWS
Contact: Sitrick And Company
Media: Investors:
Michael Kolbenschlag Linda Press
Brenda Adrian
(310) 788-2850
Anita-Marie Hill
(604) 293-6483 or
(310) 788-2850
THE LOEWEN GROUP FILES FOR CHAPTER 11 IN U.S. AND CCAA IN CANADA
TO FACILITATE RESTRUCTURING
RECEIVES COMMITMENT FOR US $200 MILLION IN DIP FINANCING
_________________________________________
Vancouver, BC-June 1, 1999-THE LOEWEN GROUP INC.
(NYSE,TSE,ME:LWN) announced today that, in order to ensure time
to implement a new strategic plan while concurrently reducing its
debt structure to compete more effectively in the marketplace,
the Board of Directors has authorized the Company to file a
voluntary petition to reorganize under Chapter 11 of the U.S.
Bankruptcy Code, as well as an application for creditor
protection under the Companies_ Creditors Arrangement Act (CCAA)
in Canada.
In conjunction with the filings, the Company's U.S. subsidiaries
have received a commitment for up to US $200 million in debtor-in-
possession (DIP) financing from First Union National Bank. The
post-petition financing, which is subject to court approval, is
expected to provide adequate funding for all post-petition trade
and employee obligations as well as the Company's ongoing needs
during the restructuring process. The Company's Canadian
subsidiaries have sufficient liquidity to fund daily operations
and do not anticipate the need for additional financing.
The Loewen Group Chairman, John S. Lacey said, "The filings will
enable the Company to move forward with the implementation of its
strategic plan while it restructures its burdensome debt load.
During the past three years, the Company has experienced
increasingly intensive working capital needs primarily as a
result of its aggressive pursuit of cemetery acquisitions versus
its historical emphasis on funeral home operations. We must focus
our energy on correcting our balance sheet and implementing a
solid business plan."
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Mr. Lacey said that the plan or "vision" is to return to the
original focus of The Loewen Group as a funeral service company
with strategically located ancillary cemetery operations. "In
recent years, we have lost that focus as the Company has
concentrated more on cemetery sales and less on funeral home
operations that are our most profitable, core assets." Mr. Lacey
emphasized that the restructuring will have no negative impact on
the ability of the Company's funeral home and cemetery operations
to fulfill its commitments to clients.
"Our clients should also be assured that monies held in trust
accounts for pre-need contracts are secure and protected by state
and provincial regulations," Mr. Lacey said. "It is the Company's
intent to continue operations without interruption at Loewen's
over 1500 facilities in the U.S. and Canada." He also noted that
the Company's United Kingdom subsidiaries, which generate less
than 1% of the Company's revenues, are excluded from the filings.
Because of significant future debt repayment obligations, the
Company recently has been working with its senior lenders in
anticipation of restructuring its debt. "The restructuring will
finally allow the creation of a capital structure more suitable
to the long term operation of our business," Lacey said.
According to Robert B. Lundgren, president and chief executive
officer of The Loewen Group, the realization of the Company's
business plan will be built around a funeral home strategy of
providing extraordinary service and compassionate care at fair
prices. "We intend to be the best service provider in all market
segments, to focus on selected markets with potential for growth
and to enhance our market share and brand name with aggressive
marketing," said Mr. Lundgren. On the cemetery side of the
business, Mr. Lundgren said, "The Company will focus its efforts
on the larger cemeteries that already support or have the
potential to support funeral home operations." Mr. Lundgren said
that in addition to the debt restructuring, the Company has
already identified and begun to implement several key operational
elements of this plan. Those elements include:
* Completing consolidation of accounting and
administrative facilities to one location;
* Suspending the Company's acquisition program;
* Improving cashflow characteristics of the pre-need sales
program; and
* Implementing more competitive pricing programs at
selected funeral home locations.
"Our efforts to be more competitive have already produced
positive results in our selected funeral home businesses and we
plan to extend these programs to many more of our funeral home
markets by year end," Mr. Lundgren said.
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<PAGE>
Mr. Lacey said that, The Loewen Group is optimistic it will
emerge from the restructuring process as a stronger, more
competitive enterprise. "We are extremely grateful to the
customers, employees and lenders who have supported the Company
through these challenging times," Mr. Lacey said. "We believe
this restructuring will set the Company on a path of recovery,
growth and profitability."
The Loewen Group and approximately 870 of its U.S. subsidiaries
filed their Chapter 11 cases in the U.S. Bankruptcy Court for the
District of Delaware in Wilmington. The CCAA application will be
brought later today before Mr. Justice James Farley of the
Ontario Superior Court of Justice for The Loewen Group's 116
Canadian subsidiaries.
Based in Vancouver, The Loewen Group Inc. owns or operates more
than 1100 funeral homes and more than 400 cemeteries across the
United States, Canada and the United Kingdom. The Company employs
approximately 13,000 people and derives 90 percent of its revenue
from U.S. operations.
# # #
Safe Harbor: Certain statements contained in this press release,
including but not limited to information regarding the future
economic performance and financial condition of the Company, the
plans and objectives of the Company's management and the
Company's assumptions regarding such performance and plans, are
forward-looking in nature. Additional information concerning
important factors that could cause actual results to differ from
the forward-looking information contained in this release is
included in the Company's publicly filed quarterly and annual
reports.
