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
December 20, 2000
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(Date of earliest event reported)
THE FINOVA GROUP INC.
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(Exact Name of Registrant as Specified in its Charter)
Delaware 1-11011 86-0695381
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(State or Other Jurisdiction (Commission (IRS Employer
of Incorporation) File Number) Identification No.)
4800 North Scottsdale Road, Scottsdale, Arizona 85251
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(Address of Principal Executive Offices) (Zip Code)
(480) 636-4800
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Registrant's telephone number, including area code
None
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(Former Name or Former Address, if Changed Since Last Report)
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ITEM 5. OTHER EVENTS
On December 20, 2000, The FINOVA Group Inc. (the "Company") and Leucadia
National Corporation ("Leucadia") entered into a Securities Purchase Agreement
pursuant to which Leucadia will purchase, for $250 million, (i) one million
shares of Series B Convertible Preferred Stock and (ii) a 10-year warrant with
respect to 20% of the Company's outstanding shares for an aggregate warrant
exercise price of $125 million. The Series B Convertible Preferred Stock will
have an initial aggregate liquidation preference of $250 million and a 14%
coupon compounded quarterly. During the first five years, dividends on the
Series B Convertible Preferred Stock will accrue quarterly from the date of
original issuance but will not be paid. After the first five years, dividends
will continue to accrue and will be paid if and to the extent declared by the
Board of Directors. Accrued and unpaid dividends will be added to the
liquidation preference. The Series B Convertible Stock will be convertible into
the Company's common stock from June 30, 2006 until the tenth anniversary of
issuance based on the liquidation preference of each share at an initial
conversion price of $2.50 per share of Common Stock (initially converting into
an aggregate of 100 million shares), and will vote with the common stock on an
as converted basis, receiving two votes per share of common stock into which it
is convertible.
The transactions contemplated by the Securities Purchase Agreement are
subject to the Company completing a refinancing or restructuring of its
approximately $4.7 billion bank debt and its approximately $6.6 billion public
bond debt, in each case on terms acceptable to both Leucadia and the Company, as
well as certain other customary conditions, including regulatory approvals.
As soon as practical following the purchase of the Series B Convertible
Preferred Stock by Leucadia, the Company will issue Series C Convertible
Preferred Stock with an aggregate initial liquidation preference of $150 million
pursuant to a rights offering to its current common stockholders as of the
closing of the transactions comtemplated by the Securities Purchase Agreement.
The Series B Convertible Preferred Stock and the Series C Convertible Preferred
Stock will have identical economic and other terms and will differ only in
respect of their date of issuance. Leucadia has agreed to act as standby
purchaser with respect to the first $100 million of Series C Preferred
Convertible Preferred Stock to be issued in the rights offering.
The transaction documents include a provision that could result in a
distribution to either current common stockholders as of the closing of the
transactions comtemplated by the Securities Purchase Agreement, or the holders
of Series B and Series C Convertible Preferred Stock and Leucadia with respect
to the warrant in 2006, based upon the performance of the Company's loan and
lease portfolio.
In connection with the investment, Leucadia will have the right to appoint
six members to a newly constituted ten member Board of Directors.
A copy of the Company's press release dated December 21, 2000 is filed as
Exhibit 99.A to this Current Report on Form 8-K. Copies of the Securities
Purchase Agreement, the form of Registration Rights Agreement and the form of
Management Agreement are filed as Exhibits 10.B through 10.C to this Current
Report on Form 8-K. Copies of the form of Warrant and the form of Certificate of
Designations for the Series B Convertible Preferred Stock and Series C
Convertible Preferred Stock are filed as Exhibits 4.A and 4.B, respectively, to
this Current Report on Form 8-K.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, The
FINOVA Group Inc. has duly caused this report to be signed on its behalf by the
undersigned, hereunto duly authorized.
THE FINOVA GROUP INC.
Dated: December 21, 2000 By: /s/ Bruno A. Marszowski
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Name: Bruno A. Marszowski
Title: Senior Vice President -
Controller and Chief Financial
Officer
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EXHIBIT INDEX
Exhibit Number by
Reference to Item
601 of Regulation S-K Description
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4.A Form of Warrant to be issued to Leucadia National
Corporation
4.B Form of Certificate of Designations of Series B
Convertible Preferred Stock and Series C Convertible
Preferred Stock
10.A Securities Purchase Agreement dated as of December 20,
2000 between The FINOVA Group Inc. and Leucadia
National Corporation
10.B Form of Registration Rights Agreement
10.C Form of Management Agreement
99.A Press Release dated December 21, 2000
