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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
April 14, 2000 (April 7, 2000)
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Date of Report (Date of earliest event reported)
PHILIP SERVICES CORP.
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(Exact name of Registrant as specified in its charter)
Ontario 0-20854 Not Applicable
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(State or other jurisdiction) (Commission File (IRS Employer
of incorporation) Number) Identification No.)
100 King Street West, P.O. Box 2440, LCD1, Hamilton, Ontario, Canada L8N 4J6
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(Address of principal executive offices, including zip code)
Registrant's telephone number, including area code: (905) 521-1600
NOT APPLICABLE
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(Former name or former address, if changed since last report.)
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ITEM 5. OTHER EVENTS
On June 25, 1999, Philip Services Corp., an Ontario corporation ("PSC"),
together with its wholly owned subsidiary, Philip Services Corporation (formerly
named Philip Services (Delaware), Inc.), a Delaware corporation ("Philip"), and
certain of their subsidiaries filed a voluntary application with the Ontario
Superior Court of Justice in Toronto, Canada (the "Ontario Court"), to
reorganize under the Companies' Creditors Arrangement Act (Canada) (the "CCAA")
and voluntary petitions with the United States Bankruptcy Court for the District
of Delaware (the "Bankruptcy Court"), under Chapter 11 of the United States
Bankruptcy Code, 11 U.S.C. sections 101-1330, as amended (the "Bankruptcy
Code"). On September 17, 1999, PSC, Philip and such subsidiaries filed an
Amended and Restated Plan of Compromise and Arrangement under the CCAA with the
Ontario Superior Court of Justice in Toronto, Canada, and an Amended Joint Plan
of Reorganization and a Disclosure Statement under Chapter 11 with the
Bankruptcy Court. On September 21, 1999, PSC, Philip and such subsidiaries filed
a further Amended and Restated Plan of Compromise and Arrangement (the "Amended
Canadian Plan") under the CCAA with the Ontario Court, and an Amended Joint Plan
of Reorganization (the "Amended U.S. Plan", and together with the Amended
Canadian Plan, the "Plan") and a Disclosure Statement under Chapter 11 with the
Bankruptcy Court. On November 26, 1999 the Ontario Court approved and sanctioned
the Amended Canadian Plan, and on November 30, 1999, the Bank ruptcy Court
entered its confirmation order confirming the Amended U.S. Plan. On April 7,
2000, the Plan became effective. Under the Plan, Philip emerged as the successor
public entity.
Through the financial reorganization and proceeds from the prior sale of
assets, the Philip's senior secured debt has been reduced from over $1 billion
to $235 million and $100 million in secured convertible payment-in-kind debt.
The $235 million in senior secured debt will be further reduced to approximately
$190 million once Philip completes the sale of its UK Metals business to
Simsmetal Limited. In addition, Philip has converted approximately $140 million
of unse cured obligations into $48 million in payment-in-kind notes and $18
million in convertible payment-in-kind notes. Class action suits against PSC
have been settled in return for 1.5% of the equity in Philip.
Pursuant to the Plan, 24 million shares of common stock ("Common Shares")
will be issued by Philip on a pro rata basis to its secured lenders (91%),
unsecured creditors (5%), existing shareholders of PSC (2%), class action claim-
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ants (1.5%) and other equity claimants (0.5%). The 2% of the Common Shares to be
issued to former shareholders of PSC represents a total of 480,000 shares or one
share for every 273 shares of PSC held as of the record date.
On April 11, 2000 Philip announced that The Toronto Stock Exchange (the
"TSE") had set a record date of April 19, 2000 to determine shareholders of PSC
entitled to receive shares of the newly restructured company. Shares of Philip
will commence trading on the TSE under the stock symbol "PSC" and on the Nasdaq
OTC under the symbol "PHVC".
A copy of the press release announcing the effectiveness of the Plan is
attached hereto as Exhibit 99.1. A copy of the press release announcing that the
TSE has set a record date to determine shareholders of PSC entitled to receive
Common Shares is attached hereto as Exhibit 99.2.
<TABLE>
<CAPTION>
Exhibit
Number Description
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<S> <C>
99.1 Press release announcing that PSC has completed its financial
reorganization dated April 7, 2000
99.2 Press release, dated April 11, 2000, announcing that the TSE
has set a record date to determine issuance of shares in Philip
</TABLE>
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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.
PHILIP SERVICES CORPORATION
By: /s/ Colin H. Soule
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Colin H. Soule
Executive Vice President,
General Counsel and
Corporate Secretary
Date: April 14, 2000
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EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit
Number Description
- - ------ -----------
<S> <C>
99.1 Press release announcing that PSC has completed its financial
reorganization dated April 7, 2000
99.2 Press release, dated April 11, announcing that the TSE has set
a record date to determine issuance of shares in Philip
</TABLE>
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EXHIBIT 99.1
NEWS RELEASE
PHILIP SERVICES COMPLETES ITS FINANCIAL REORGANIZATION EMERGES WITH SOLID
BUSINESSES AND RENEWED FINANCIAL STABILITY
On April 7, 2000, Philip Services Corp. (TSE: PHV) completed its financial
reorganization. On the same date, Philip Services Corporation, the newly
restructured company incorporated in Delaware, has successfully emerged from
Chapter 11 of the U.S. Bankruptcy Code and the Companies Creditors' Arrangement
Act ("CCAA") in Canada.
"We have emerged with renewed financial stability and the strength of over
12,000 employees, a service network that spans North America, and a loyal client
and supplier base," said Anthony Fernandes, President and Chief Executive
Officer. "We have a unique ability to contribute a range of critical products
and services to the market that provides us with a sound platform from which to
build a profitable future."
Through the financial reorganization and proceeds from the prior sale of assets,
the Company's senior secured debt has been reduced from over $1 billion to $235
million and $100 million in secured convertible payment-in-kind debt. The $235
million in senior secured debt will be further reduced to approximately $190
million once the Company completes the sale of its UK Metals business to
Simsmetal Limited. In addition, the Company has converted approximately $140
million of unsecured debt into $48 million in payment-in-kind notes and $18
million in convertible payment-in-kind notes. Class action suits against the
Company have been settled in return for 1.5% of the equity in the restructured
Company. With access to US$175 million in working capital financing, Philip has
the financial resources necessary to support and grow its businesses.
As part of its financial reorganization, 24 million shares will be issued by the
new legal entity, Philip Services Corporation, on a pro rata basis to its
secured lenders (91%), unsecured creditors (5%), existing shareholders (2%),
class action claimants (1.5%) and other equity claimants (0.5%). Under the
Company's Plan of Reorganization, existing shareholders will receive 2% of the
shares of the restructured company, which represents a total of 480,000 shares
or one share for every 273 shares held as of the record date. The record date to
determine shareholders
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who will receive shares in the restructured company will be fixed shortly by the
Toronto Stock Exchange. Shares of the newly restructured company, Philip
Services Corporation, are expected to commence trading once the record date has
been set.
"We have exceptional employees that have stayed focused on the business and
client service throughout our financial reorganization. With their
professionalism and experience, supported by a solid management team and a new
Board of Directors, Philip is focused on profitable business growth and
generating solid returns for our shareholders," concluded Mr. Fernandes.
Philip Services is an integrated metals recovery and industrial services company
with operations throughout the United States, Canada and Europe. Philip provides
diversified metals services, together with by-products management and industrial
outsourcing services, to all major industry sectors.
# # #
Contact: Lynda Kuhn
SVP Public Affairs
(905) 540-6658
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EXHIBIT 99.2
NEWS RELEASE
TSE SETS RECORD DATE TO DETERMINE ISSUANCE OF SHARES IN PHILIP SERVICES
CORPORATION
Hamilton, Ontario, April 11, 2000: Philip Services Corporation today announced
that The Toronto Stock Exchange ("TSE") has set a record date of April 19, 2000
to determine shareholders entitled to receive shares of the newly restructured
company. Shares of the restructured company, Philip Services Corporation, will
commence trading on the TSE on April 20, 2000 under the stock symbol "PSC".
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