SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-K
CURRENT REPORT
Pursuant to Section l3 or l5(d) of the
Securities Exchange Act of l934
Date of Report (Date of earliest event reported) April 11, 1997
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SLM INTERNATIONAL, INC.
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(Exact name of registrant as specified in its charter)
Delaware 34-0-19596 13-36-32297
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(State of other juris- (Commission (I.R.S. Employer
diction of incorporation) File Number) Identification No.)
c/o Maska U.S., Inc.
77 Route 25, Pierson Industrial Park, Bradford, VT 05033
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(Address of principal executive offices) (Zip Code)
(518) 773-4401
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(Registrant's telephone number, including area code)
c/o Maska U.S., Inc., 9 Vose Farm Road, Peterborough, NH 03458
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(Former name or former address, if changed since last report)
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Item 5. Other Events.
On April 11, 1997 (the "Effective Date"), the First Amended Joint
Chapter 11 Plan of Reorganization, as amended (the "Plan"), of SLM
International, Inc. (the "Company") became effective. The Plan, which had been
confirmed by the United States Bankruptcy Court for the District of Delaware on
January 23, 1997, provided for a significant de-leveraging of the Company's
capital structure and the conversion of the majority of the Company's existing
debt into one hundred percent of the equity of the reorganized entity (the
"Reorganized Company") that was issued on the Effective Date.
Pursuant to the Plan, on the Effective Date the Reorganized Company
issued an aggregate of 6,500,000 shares of newly authorized common stock, $.01
par value (as adjusted to take account of fractional interests pursuant to the
Plan) (the "New Common Stock"). The New Common Stock is principally owned by
Wellspring Associates, L.L.C., a New York-based private investment firm, and a
group of insurance companies including The Equitable Life Assurance Society of
the United States, Phoenix Home Life Mutual Insurance Company, The Northwestern
Mutual Life Insurance Company and GE Capital Assurance Company. The Reorganized
Company expects that there will be approximately 20 to 30 holders of New Common
Stock once all claims have been settled.
The Company's former common stockholders (holding 19,859,679 shares
of the Company's old common stock, $.01 par value (the "Common Stock")),
received a total of 300,000 five-year warrants (each a "Warrant" and
collectively, the "Warrants") to purchase an aggregate of 300,000 shares of New
Common Stock at an exercise price of $16.92 per share (subject to adjustments
for stock splits, stock dividends, recapitalization and similar transactions).
Each holder of 67 shares of Common Stock received one Warrant to purchase, for
cash, one share of New Common Stock, with no fractional Warrants issued. The
Warrants may be exercised beginning on the Effective Date and ending on the
fifth anniversary of the Effective Date. The Reorganized Company does not intend
to list the New Common Stock or the Warrants on NASDAQ or a stock exchange.
In the event of the sale of the Reorganized Company for aggregate
consideration of $140,000,000 or more, each holder of a Warrant is entitled to
exchange its Warrant for $1.67, for each share of New Common Stock for which its
Warrant is then exercisable.
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On the Effective Date of the Plan, the Board of Directors of
the Company was reconstituted to consist of Gerard B. Wasserman, Chief
Executive Officer of the Company, Paul M. Chute, Martin S. Davis,
Douglas W. Rotatori and James C. Pendergast.
As of the Effective Date of the Plan, the Company and two of its
U.S. subsidiaries, Maska U.S., Inc. and #1 Apparel, Inc., entered into a new
Credit Agreement (the "US Credit Agreement") with the lenders referred to
therein (the "Lenders") and The Chase Manhattan Bank, as Agent ("Chase").
Simultaneously, one of the Company's Canadian subsidiaries, Sport Maska Inc.,
entered into a Credit Agreement (the "Canadian Credit Agreement" and, together
with the US Credit Agreement, the "Credit Agreements") with The Chase Manhattan
Bank of Canada ("Chase Canada"). The maximum amount of loans and letters of
credit that may be outstanding under the Credit Agreements is $74,000,000,
consisting of $35,000,000 revolving credit loans under the US Credit Agreement,
$35,000,000 of revolving credit loans under the Canadian Credit Agreement and a
$4,000,000 term loan under the US Credit Agreement. Borrowings under the Credit
Agreements are guaranteed by certain subsidiaries and are secured by the assets
(including, without limitation, accounts receivable, inventory and the stock of
certain subsidiaries) of the Company, the two U.S. Subsidiaries referred to
above and the Company's other subsidiaries which are guarantors.
Borrowings under the US Credit Agreement will bear interest at the
alternate base rate plus 1% per annum or at an interest rate based on LIBOR plus
2 3/4% per annum. Borrowings under the Canadian Credit Agreement will bear
interest at Chase Canada's prime rate. In addition, the Company will be charged
a quarterly commitment fee of 3/8 of 1% on the unused portion of the revolving
credit facilities under the Credit Agreements and certain other fees.
The Credit Agreements include customary affirmative and negative
covenants, including those relating to capital expenditures, interest coverage
and the incurrence of additional indebtedness.
As of the Effective Date of the Plan, the Company also issued
$29,500,000 principal amount of 14% Senior Secured Notes due April 1, 2004 (the
"Senior Notes"), pursuant to an Indenture with The Bank of New York, as trustee.
The Senior Notes were issued by the
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Company as partial satisfaction of the Company's obligations to its former
senior lenders.
Interest is payable on the Senior Notes semi-annually at the rate of
14% per annum, with such interest rate being permanently reduced if the Company
meets certain earnings tests. Further, of the initial 14% interest rate, 10%
will be payable in cash and 4% will be payable by the issuance of additional
Senior Notes. The Senior Notes amortize beginning October 1, 2001, with
$4,000,000 in principal payable semi-annually thereafter and the balance of the
principal amount of the Senior Notes payable at maturity on April 1, 2004.
The Senior Notes will be guaranteed by certain subsidiaries and will
be secured by the assets (including, without limitation, accounts receivable,
inventory and the stock of certain subsidiaries) of the Company, the two U.S.
Subsidiaries referred to above and the Company's other subsidiaries which are
guarantors. The lien of the trustee for the benefit of itself and the Senior
Noteholders will be junior to the liens of Chase and Chase Canada. The Indenture
also includes customary affirmative and negative covenants.
Item 7. Financial Statements and Exhibits.
(c) Exhibits
99.1 Press Release dated April 14, 1997.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of l934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
SLM INTERNATIONAL, INC.
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(Registrant)
/s/ RUSSELL J. DAVID
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(Signature)
Russell J. David
Vice President, Finance
Date: April 14, 1997
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EXHIBIT INDEX
EXHIBIT NO. DESCRIPTION
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99.1 Press Release dated April 14, 1997.
EXHIBIT 99.1
SLM INTERNATIONAL'S PLAN OF REORGANIZATION EFFECTIVE
Montreal, April 14, 1997.....SLM International, Inc., a leading manufacturer of
hockey products under the CCM and Tacks brand names, announced that its Plan of
Reorganization, which was confirmed in late January by the Bankruptcy Court for
the District of Delaware, had become effective as of Friday, April 11.
As a result of the Reorganization, the majority of the Company's existing debt
has been converted into one hundred percent of the equity of the reorganized
entity. Effective today, all securities of the Company, including the Company's
publicly-held common stock, $.01 par value, have been canceled and 6.5 million
shares of new common stock, $.01 par value, have been issued. The Company's
former common stockholders received warrants to purchase shares of new Common
Stock, at a rate of 1 warrant for every 67 outstanding shares of Common Stock.
The Reorganization accomplished a significant de-leveraging of SLM's balance
sheet. The Company entered into a new Credit Agreement with The Chase Manhattan
Bank, and one of the Company's Canadian subsidiaries entered into a Credit
Agreement with The Chase Manhattan Bank of Canada. The maximum amount of loans
and letters of credit that may be outstanding under the Credit Agreements is
$74,000,000.
The Company also issued $29,500,000 principal amount of 14% Senior Secured Notes
due April 1, 2004.
The Company also announced its 1996 year-end financial results today.
For the year ended December 31, 1996, the Company reported net sales of $140.3
million, compared to net sales of $161.0 million for the year ended December 31,
1995. The Company reported an operating loss of $2.2 million (including $4
million of unusual charges) in 1996, compared to an operating loss of $21.5
million in 1995 (including $15.5 million of unusual charges). The
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Company reported a net loss from continuing operations for 1996 of $18.7
million, compared to a net loss from continuing operations of $51.9 million in
1995 (not including a loss of $25.6 million from disposition of discontinued
operations).
SLM International, Inc. designs, develops, manufactures and markets a broad
range of ice and roller hockey and figure skating products and sports apparel,
primarily under the CCM, Tacks, M&K and #1 Apparel brand names.
All inquiries should be directed to Mr. Gerald B. Wasserman at
7405 Trans Canada Highway, Suite 300, St. Laurent, Quebec H4T 1Z2
o Tel: 514-331-5150 o Fax: 514-331-7061.
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