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): February 25, 1998
AMERICAN RESTAURANT GROUP HOLDINGS, INC.
(Exact Name of registrant specified in its charter)
United States 33-74012 33-0592148
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(State or other (Commission File Number) (I.R.S. employer
Jurisdiction of Identification No.)
Incorporation)
450 Newport Center Drive
Newport Beach, California 92660
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(Address of principal executive offices)
Registrant's telephone number, including area code: (714) 721-8000
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Item 5. Other Events
On February 25, 1998, American Restaurant Group, Inc. ("ARG"), a
wholly owned subsidiary of American Restaurant Group Holdings, Inc.
("Holdings"), completed a recapitalization plan (the "Recapitalization
Plan"), the principal elements of which were the issuance, in an offering
(the "Offering") exempt from registration under the Securities Act of 1933,
as amended, of (i) $155,000,000 aggregate principal amount of 11-1/2% Senior
Secured Notes due 2003 of ARG (the "Notes") and (ii) 35,000 preferred stock
units of ARG (the "Units"), each Unit consisting of $1,000 initial
liquidation preference of 12% Senior Pay-in-Kind Exchangeable Preferred Stock
and one Common Stock Purchase Warrant initially to purchase 2.66143 shares of
the common stock, par value $.01 per share (the "Common Stock"), of ARG at an
initial exercise price of $.01 per share.
Also as part of the Recapitalization Plan, ARG concurrently with
the Offering, (i) redeemed $126.4 million aggregate principal amount of its
existing Senior Secured Notes due 1998 at par plus accrued and penalty
interest thereon and repaid certain other interest-bearing short-term
liabilities, (ii) repurchased $45.0 million aggregate principal amount of its
existing 10-1/4% Subordinated Notes (the "Subordinated Notes") at a price
equal to 65% of the aggregate principal amount of the Subordinated Notes,
plus accrued and penalty interest thereon, and cancelled the related warrants
to purchase common stock of Holdings, and (iii) established a $15.0 million
revolving credit facility.
As an additional component of the Recapitalization Plan, Holdings
extended the accretion period on its Senior Discount Debentures due 2005 (the
"Holdings Debentures"), with a current accreted value of approximately $83.9
million, from June 15, 1999 to maturity on December 15, 2005, and amended
certain provisions of the Holdings Debentures (as so amended, the "Amended
Debentures"). Such Amended Debentures will accrete at a rate of 14.25%.
compounded semi-annually (as opposed to 14% for the Holdings Debentures). In
addition, holders of Holdings Debentures with an accreted value of
approximately $10.8 million surrendered such Debentures for cancellation and
received $3.6 million principal amount of the Notes, in addition to the Notes
sold in the Offering.
In conjunction with the Recapitalization Plan, ARG issued shares of
Common Stock to certain members of ARG's management (the "Management
Stockholders") in an aggregate amount equal to 15% of the Common Stock on a
fully diluted basis. Such Management Stockholders have entered into a voting
trust agreement in accordance with which Anwar S. Soliman, the Chairman and
Chief Executive Officer of ARG, will exercise all voting and substantially
all other rights to which such Management Stockholders would otherwise be
entitled until August 15, 2005 or the earlier termination of the agreement.
The Management Stockholders also entered into a stockholders agreement with
Holdings, Jefferies & Company, the initial purchaser in the Offering (the
"Initial Purchaser"), and TCW Asset Management Company ("TCW") and affiliates
of TCW, purchasers of more than 50% of the Units, which provides that the
parties will agree to vote all of their shares of ARG's equity securities so
that the Board of Directors of ARG consists of five directors, with two
directors designated by TCW, two by the Management Stockholders, with the
remaining director being an independent director initially designated by the
Initial Purchaser.
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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.
AMERICAN RESTAURANT GROUP HOLDINGS, INC.
By: /s/ William J. McCaffrey, Jr.
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Name: William J. McCaffrey, Jr.
Title: Vice President and Chief Financial
Officer
Date: March 3, 1998
