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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): May 1, 1998
CITYSCAPE FINANCIAL CORP.
(Exact name of registrant as specified in its charter)
DELAWARE 0-27314 11-2994671
State or Other Jurisdiction Commission File (IRS Employer Identification
of Incorporation Number No.)
565 Taxter Road, Elmsford, New York 10523-2300
(Address of Principal Executive Offices) Zip Code
Registrant's telephone number, including area code: (914) 592-6677
________________________________
Former name or former address,
if changed since last report
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Item 2. Disposition of Assets.
(a) On May 1, 1998, Cityscape Financial Corp. (the "Company") announced
that, pursuant to an Agreement for the Sale and Purchase of the Business of
City Mortgage Corporation Limited ("CSC-UK") and its Subsidiaries and the
Entire Issued Share Capital of City Mortgage Receivables 7 Plc, dated March 31,
1998 (the "UK Sale Agreement"), the Company has completed the sale to Ocwen
Financial Corporation ("Ocwen") and Ocwen Asset Investment Corp. ("Ocwen
Asset") of substantially all of the assets, and certain liabilities, of the UK
operations of CSC-UK, the Company's indirect wholly-owned subsidiary (the "UK
Sale"). The UK Sale includes the acquisition by Ocwen of CSC-UK's whole loan
portfolio and loan origination and servicing businesses for a price of (pound
sterling)249.6 million, the acquisition by Ocwen Asset of CSC-UK's securitized
loan residuals for a price of (pound sterling)33.7 million and the assumption by
Ocwen of (pound sterling)7.2 million of CSC-UK's liabilities. The price paid by
Ocwen is subject to adjustment to account for the actual balances on the
closing date of the loan portfolio and the assumed liabilities. As a result of
the sale, the Company received net proceeds of approximately $102 million, less
costs of approximately $16 million related to the disposal of UK discontinued
operations.
(b) Not applicable.
Item 5. Other Events.
On May 1, 1998, the Company issued a press release which has been
filed with this Form 8-K as Exhibit 99.1 and is hereby incorporated by
reference.
Following the issuance of the press release, the Company was informed
by The Nasdaq Stock Market, Inc. that the Company's Common Stock would be
delisted from the Nasdaq SmallCap Market effective with the close of business
on May 1, 1998 and that the Company does not meet the criteria necessary for
immediate eligibility for quotation on the OTC Bulletin Board. As a result of
this delisting, it is likely that the liquidity of the Company's Common Stock
will be materially impaired which is likely to materially and adversely affect
the price of the Common Stock.
Item 7. Financial Statements, Pro Forma Financial
Information and Exhibits.
(c) Exhibits
99.1 Press Release, dated May 1, 1998
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this Current Report on Form 8-K to be signed on its
behalf by the undersigned hereunto duly authorized.
CITYSCAPE FINANCIAL CORP.
(Registrant)
By: /s/ Tim S. Ledwick
-----------------------------
Name: Tim S. Ledwick
Title: Vice President and
Chief Financial Officer
Dated: May 1, 1998
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INDEX TO EXHIBITS
Exhibits Decription Page
99.1 Press Release, dated May 1, 1998
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NEWS RELEASE
FOR IMMEDIATE RELEASE
CITYSCAPE FINANCIAL COMPLETES SALE OF UK BUSINESS, DEFERS
INTEREST PAYMENT ON SUBORDINATED DEBT
UK Sale Nets More Than $80 Million
Deferment Part of Previously-Announced Company Restructuring
ELMSFORD, NY, MAY 1, 1998 -- Cityscape Financial Corp. (Nasdaq SmallCap: CTYSC)
announced today that it has completed its previously-announced sale of
substantially all of the assets of its UK operation resulting in cash proceeds
in excess of $80 million.
Separately, the Company determined to defer the May 1 interest payment on its
issue of 6% Convertible Subordinated Debentures due 2006 as part of a
previously-announced plan to reorganize its business. During the contractual
30-day cure period following such a deferral, Cityscape will continue its
dialogue with major bondholders to restructure its balance sheet.
"The completion of the sale of our UK business represents an important
milestone in the Company's restructuring and provides liquidity for Cityscape's
operations," said Mr. Steven M. Miller, Cityscape Financial Corp's President
and Chief Executive Officer. "We now are moving ahead with our talks with
bondholders to address the Company's longer-term balance sheet issues. As part
of this process, we have opted to defer the interest payment while we seek a
consensus on our ongoing restructuring plan."
Miller continued: "Our intent to restructure has received strong expressions of
support from significant holders of our Senior Notes. We are in constructive
dialogue with these noteholders and expect to finalize a plan soon."
Steve Feinberg of Cerberus Partners L.P., a holder of a significant amount of
the 12 3/4% Senior Notes due 2004, voiced support for the Company's actions:
"We are pleased to be working closely with the Company to complete a
restructuring plan as soon as possible. We believe in Cityscape's future, and
we are confident of its ability to compete successfully in the US subprime
market."
(More)
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Cityscape Financial Page 2
Cityscape notes that it has in excess of $80 million in proceeds from the UK
sale. Further, its warehousing agreements with both Greenwich Capital and CIT
remain in place, enabling the Company to meet demand for its range of products
and continue its loan origination activities. Mr. Miller concluded, "As far as
we are concerned, it's very much business as usual, and our employees are
focused on serving our customers even as we move ahead with the restructuring."
Cityscape notes that, as of December 31, 1997, taking into account the sale of
its UK operation, total assets were $398.6 million, total liabilities were
$575.4 million and stockholders' equity stood at a deficit of $176.8 million.
The Company further notes that it expects to post a net loss for the first
quarter ended March 31, 1998. The Company's equity deficit, recent losses and
need to restructure its balance sheet create serious risks of loss for the
holders of the Company's debt and equity securities. No assurances can be given
that the Company will be successful in its restructuring efforts or, that as a
result of such efforts, the value of the Company's debt and equity securities
will not be materially impaired. In particular, the Company can give no
assurances that a successful restructuring will not result in a material
impairment of the value of the Convertible Subordinated Debentures or a severe
or complete impairment of the value of the Company's preferred and common
equity. The extent of any such impairment will depend on many factors including
the outcome of the Company's discussions with its senior noteholders as well as
other factors set forth in the paragraph discussing forward-looking statements
below.
In January 1998, the Company was granted a period of time to come into
compliance with the Nasdaq Stock Market, Inc.'s listing requirements. As a
result of the Company's continuing inability to meet the listing requirements,
it is likely that the Company's Common Stock will be delisted from the Nasdaq
SmallCap Market.
This press release contains forward-looking statements which involve risks and
uncertainties. The Company's actual results could differ materially from those
anticipated in these forward-looking statements as a result of certain factors
including, but not limited to, the ability to access loan warehouse or purchase
facilities in amounts, if at all, necessary to fund the Company's loan
production, the successful execution of loan sales in the whole loan sales
market, the ability of the Company to successfully restructure its balance
sheet, the initiative to streamline the Company's operations, the ability of the
Company to retain an adequate number and mix of its employees, legal proceedings
and other matters, adverse economic conditions, competition and other risks
detailed from time to time in the Company's Securities and Exchange Commission
reports. The Company undertakes no obligation to release publicly any revisions
to these forward-looking statements to reflect events or circumstances after the
date hereof or to reflect the occurrence of anticipated or unanticipated events.
(More)
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Cityscape Financial Page 3
Cityscape Financial Corp. is a consumer finance company engaged in the business
of originating, selling and servicing mortgage loans secured primarily by
one- to four-family residences. The majority of the Company's loans are made to
owners of single-family residences who use the loan proceeds for such purposes
as debt consolidation and financing of home improvements and educational
expenditures, among others. Through its wholly-owned subsidiary, Cityscape
Corp., the Company is licensed or registered to do business in 46 states and the
District of Columbia. The Company is headquartered in Elmsford, New York.
CONTACTS:
Steven M. Miller, President and Michelle Katz/Libby Marshall
Chief Executive Officer Morgen-Walke Associates
Cityscape Financial Corp. (212)850-5600
(914)592-6677
