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): July 2, 1996
SMITH CORONA CORPORATION
(Exact name of registrant as specified in its charter)
DELAWARE 1-10281 51-0286862
- -------- ------- ----------
(State or other jurisdiction (Commission (I.R.S. Employer
of incorporation) File Number) Identification No.)
65 Locust Avenue, New Canaan, Connecticut 06840
(Address of principal executive offices) (zip code)
(203) 972-1471
(Registrant's telephone number, including area code)
<PAGE>
Item 5. Other Events
- ---------------------
On July 2, 1996, Smith Corona Corporation ("Smith Corona")
issued a press release announcing that it filed an amended Plan of
Reorganization and Disclosure Statement with the U.S. Bankruptcy
Court for the District of Delaware on July 2, 1996, which contains
several new provisions to the Plan. Copies of the Disclosure
Statement are available, upon written request, from: Delaware Legal
Copy, 704 King Street, Wilmington, Delaware, 19899.
Also, on July 8, 1996, Smith Corona issued a press release
announcing that it has reached agreement with Chemical Bank, agent,
and Bank of America Illinois to amend the debtor-in-possession
financing agreement and extend the maturity date to the earlier of
September 30, 1996, or confirmation of a plan of reorganization.
Additionally, on July 16, 1996, Smith Corona issued a press
release announcing that it has received approval from the U.S.
Bankruptcy Court on three significant motions: the company's
Disclosure Statement for the second amended Plan of Reorganization;
the sale of Smith Corona labeler machine manufacturing capability
and technology to Kroy, Inc.; and the extension of exclusivity to
the earlier of September 27, 1996 or confirmation of a Plan of
Reorganization.
Smith Corona filed under Chapter 11 on July 5, 1995.
Copies of the press releases are attached hereto as exhibits
99.1, 99.2 and 99.3, respectively, and are incorporated herein by
reference.<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.
Date: July 19, 1996 SMITH CORONA CORPORATION
By: /S/ John A. Piontkowski
John A. Piontkowski
Senior Vice President and
Chief Financial Officer
(Principal Financial Officer)
By: /s/ Martin D. Wilson
Martin D. Wilson
Vice President/Controller
(Principal Accounting Officer)
<PAGE>
INDEX TO EXHIBITS
Exhibit No. Description
- ----------- -----------
99.1 News Release
99.2 News Release
99.3 News Release
EXHIBIT 99.1
News Release
- -----------
Sitrick and Company, Inc.
Los Angeles/New York
Contact: Rivian Bell
Sitrick and Company, Inc.
(310) 788-2850 (24 hours)
(800) 686-1910 (pager)
For Immediate Release
- ---------------------
SMITH CORONA AMENDS PLAN OF REORGANIZATION;
PROVIDES WARRANTS TO SHAREHOLDERS
New Canaan, Conn. -- July 2, 1996 -- Smith Corona
Corporation today filed an amended Plan of Reorganization and
Disclosure Statement with the Bankruptcy Court which contains
several new provisions. The amended Plan provides:
Current shareholders would receive warrants to purchase
common stock in the reorganized company. The Plan does not
yet specify the ratio of shares of common stock to warrants,
the exercise price, or the exercise period, although it is
expected that this data will be available by the July 16
hearing on the Disclosure Statement.
Restrictions on acquisitions of shares to preserve the
company's net operating tax loss carryforward and other tax
attributes. This "lock-up" provision requires, for
approximately two years, written board of director approval
for the acquisition of five percent or more of the common
stock in the reorganized company.
A Rights Agreement providing one right to holders of new
common stock on the Plan effective date to purchase one unit
equal to one one-thousandth of a share of Series A preferred
stock. Exercisable for a 10-year period, the Rights are
designed as a "poison pill" to preserve shareholder value in
the reorganized company. Provisions commonly referred to as
"flip ins" and "flip overs" are included in the Agreement.
"We are pleased to include these provisions that will bring
value to existing Smith Corona shareholders and creditors,"
stated Ronald Stengel, Smith Corona president and chief executive
officer. "The committee representing the unsecured creditors is
reviewing the amended Plan and analyzing various financial
scenarios, the result of which will be reflected in the warrant
exercise price and ratio to existing shares. We expect this
information to become available by the time the hearing is held
on the Disclosure Statement."
The amended Plan also provides for "convenience class
claims," defined as any unsecured claim of $1,500 or less. Under
the Plan, such claims, and those unsecured claims which are
voluntarily reduced by their holders to $1,500, shall be
satisfied by a cash payment equal to 60 percent of the claim for
a maximum per-claim payment of $900. No other payment schedules
have been changed.
Smith Corona is a leading worldwide manufacturer and
marketer of personal word processors, portable electric
typewriters, label printers, and other products and accessories
for use in the office, home and school. The company filed under
Chapter 11 of the U.S. Bankruptcy Code on July 5, 1995.
# # #
EXHIBIT 99.2
News Release
- -----------
Sitrick and Company, Inc.
Los Angeles/New York
Contact: Rivian Bell
Sitrick and Company, Inc.
(310) 788-2850 (24 hours)
(800) 686-1910 (pager)
For Immediate Release
- ---------------------
SMITH CORONA AMENDS, EXTENDS DIP FINANCING
New Canaan, Conn. -- July 8, 1996 -- Smith Corona
Corporation announced today that it has reached agreement with
Chemical Bank, agent, and Bank of America Illinois to amend the
debtor-in-possession financing agreement and extend the maturity
date to the earlier of September 30, 1996, or confirmation of a
plan of reorganization.
Under the terms of the amended agreement, the bank
commitment will be reduced from $24 million to $10 million, with
the entire $10 million commitment available for letters of
credit. The original DIP agreement provided only $5 million for
letters of credit. Cash borrowings will still be available to
Smith Corona, but only it its cash reserves fall below $1
million. Interest rates remain unchanged.
Ronald Stengel, president and chief executive officer of
Smith Corona, acknowledged that the DIP facility is "more than
adequate, given our current strong cash position."
Smith Corona is a leading worldwide manufacturer and
marketer of personal word processors, portable electric
typewriters, label printers, and other products and accessories
for use in the office, home and school. The company filed under
Chapter 11 of the U.S. Bankruptcy Code on July 5, 1995.
# # #
EXHIBIT 99.3
News Release
- -----------
Sitrick and Company, Inc.
Los Angeles/New York
Contact: Rivian Bell
Sitrick and Company, Inc.
(310) 788-2850 (24 hours)
(800) 686-1910 (pager)
For Immediate Release
- ---------------------
COURT APPROVES SMITH CORONA DISCLOSURE STATEMENT;
SOLICITATION TO BEGIN AUGUST 2;
CONFIRMATION HEARING SET FOR SEPTEMBER 9
COMPANY TO SELL LABELER TECHNOLOGY TO KROY
New Canaan, Conn. -- July 16, 1996 -- Smith Corona
Corporation reported today that it has received approval from the
U.S. Bankruptcy Court on three significant motions: the company's
Disclosure Statement for the second amended Plan of
Reorganization; the sale of Smith Corona labeler machine
manufacturing capability and technology to Kroy, Inc.; and the
extension of exclusivity to the earlier of September 27, 1996 or
confirmation of a Plan of Reorganization.
The approval of the Disclosure Statement paves the way for
Smith Corona to commence the solicitation of votes for its Plan
of Reorganization. Plan materials and ballots are expected to
begin mailing on or about August 2; the deadline for ballots is
August 30. All impaired creditor classes will be entitled to
vote on the Plan. A September 9 date has been set for the
hearing to confirm the Plan.
Ronald Stengel, president and chief executive officer of
Smith Corona, acknowledged that "We are very pleased to offer a
consensual Plan which the members of our unsecured creditors'
committee have approved. With their support, we anticipate that
the Plan will be confirmed as early as mid-September, and Smith
Corona will emerge from Chapter 11 as a smaller but stronger,
reorganized company.
"We have made great strides in our 12 months under Chapter
11. Manufacturing has been consolidated, excess assets have been
sold successfully, liquidity improved, bank loans fully repaid,
and operating expenses reduced to fit current sales activity.
The net results of these actions is the availability of more than
$10 million to the estate to repay creditors, and a significantly
stronger balance sheet."
Under the terms of the Plan, holders of secured claims will
receive payment in full in cash or any other such treatment as
may be agreed by the creditor and the reorganized company.
Holders of general, allowed unsecured claims, estimated to total
approximately $25,700,000, will receive pro rata cash
distributions from a pool of $10,280,000, as well as 85 percent
of the common stock in the reorganized company, without taking
into account the effect of warrants. Unsecured "convenience"
claims of $1,500 or less will receive cash payments equal to 60
percent of the allowed claim.
The amended Plan also calls for current equity holders to
receive warrants to purchase new common stock in the reorganized
company. The Plan provides for one warrant for every share of
common stock outstanding as of August 15, 1996. Warrants may be
exercised at any time between six months and two years following
the effective date of the Plan. The exercise price of the
warrants will be determined, at the earliest, when the company's
Plan is confirmed; the price will take into account the cash
payouts on allowed claims, interest and expenses incurred by the
class of general unsecured creditors. Equity holders are assumed
to reject the Plan and consequently will not receive ballots.
The Court today also approved the sale of Smith Corona
labeler manufacturing equipment, inventory, and technology to
Kroy, Inc., a Minnesota-based labeler manufacturer. The sale
will realize $991,000 in cash for the Smith Corona estate, as
well as a five percent royalty on certain products produced using
former Smith Corona technology for the next three years.
Mr. Stengel noted that the sale "is consistent with our
objective of maximizing cash to the estate while preserving the
company's core business."
Smith Corona is a leading worldwide manufacturer and
marketer of personal word processors, portable electric
typewriters, label printers, and other products and accessories
for use in the office, home and school. The company filed under
Chapter 11 of the U.S. Bankruptcy Code on July 5, 1995.
As of June 30, 1996, the company employed approximately
1,100 people.
# # #
