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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
Date of Report
September 30, 1999
(Date of earliest event reported)
VESTA INSURANCE GROUP, INC.
(Exact name of registrant as specified in its charter)
Delaware
(State or other jurisdiction of incorporation)
1-12338 63-1097283
(Commission File No.) (IRS Employer Identification No.)
3760 River Run Drive 35243
Birmingham, Alabama (Zip Code)
(Address of principal
executive offices)
(205)970-7000
(Registrant's telephone number, including area code)
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Item 5. Other Events.
On September 30, 1999, the registrant issued a press release announcing the
consummation of the transactions contemplated by the Convertible Preferred Stock
Purchase Agreement announced on June 29, 1999. A copy of the press release is
attached as Exhibit 99.1 to this Form 8-K and incorporated herein by reference.
Item 7. Financial Statements and Exhibits.
(c) Exhibits.
Exhibit No. Description of Document
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99.1 Press release dated September 30, 1999 issued
by the registrant.
SIGNATURE
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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, thereto duly authorized.
Dated as of October 4, 1999.
VESTA INSURANCE GROUP, INC.
/s/ Norman W. Gayle III
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By: Norman W. Gayle III
Its: President and
Chief Executive Officer
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Exhibit 99.1
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VESTA INSURANCE GROUP ANNOUNCES THE CLOSING OF A
PRIVATE PLACEMENT AND NEW CREDIT FACILITY
Company Enhances Its Financial Flexibility and Capital Structure
BIRMINGHAM, Ala., Sept. 30 /PRNewswire/ -- Vesta Insurance Group, Inc. (NYSE:
VTA - news), announced today the closing of a $25 million private placement of
convertible preferred shares and the closing of a new $20 million credit
facility. The Company will utilize the proceeds from these two transactions and
its $11.2 million sale of Vesta County Mutual, which closed on September 15th,
to pay off its $56 million credit facility with First Union National Bank.
"With the closing of the private placement and the new credit facility, all
three agreements we recently signed aimed at enhancing Vesta's financial
flexibility and capital structure have come to fruition," stated James E. Tait,
Executive Vice President and Chief Financial Officer of Vesta Insurance Group.
"These transactions have enabled Vesta to accomplish three core objectives. We
have reduced the Holding Company's debt, increased its equity position, and
established a credit facility with more favorable terms."
Vesta announced the closing of the $25 million private placement of its Series A
Convertible Preferred Stock with The Birmingham Investment Group, LLC. The
Birmingham Investment Group has purchased from the Company 2,950,000 shares of
the Company's Preferred Stock at a price of $8.50 per share. Each share of
Preferred Stock will be convertible into two shares of Common Stock and will
carry a dividend rate of 9% prior to conversion. The Preferred Stock will
automatically be converted into shares of Common Stock at the date at which the
stock of the Company achieves an average closing price of $8.00 a share for
twenty consecutive trading days. Two members of the Birmingham Investment Group,
James A. Taylor Sr. and Larry D. Striplin, have joined the board of directors of
Vesta Insurance.
Vesta Insurance also announced that it has closed on a $20 million credit
facility with The Banc Corporation and its subsidiary, The Bank. The new
facility has an initial term of two years.
"The relationship that The Bank is entering into with Vesta is a tremendous
opportunity for both organizations," said James A. Taylor, Sr., Chairman of the
Board, President and Chief Executive Officer of The Banc Corporation (Nasdaq:
TBNC - news). "The benefits for Vesta, The Bank, and The Banc Corporation will
be mutual and significant."
"The closing of the private placement and the credit facility underscores the
success the Company has made in improving its financial position," stated
Norman W. Gayle, President and Chief Executive Officer of Vesta Insurance. "We
have enhanced our financial flexibility, returned the Company to profitability,
and have the momentum to continue making progress."
Vesta Insurance Group, Inc., headquartered in Birmingham, Alabama, is a holding
company for a group of property and casualty insurance companies.
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Any statement contained in this report which is not a historical fact, or which
might otherwise be considered a statement concerning the management's plans
and/or objectives for future operations or the Company's anticipated future
economic performance, whether expressed or implied, is meant as and should be
considered a forward-looking statement as the term is defined in the Private
Securities Litigation Reform Act of 1995. Any such forward-looking statements
contained in this press release are based on the assumption that the
transactions announced herein will actually be consummated, and a failure to
consummate any of these transactions may cause actual future operations and
results to differ materially from those contemplated by the forward-looking
statements. In addition, these forward-looking statements are based on other
assumptions and opinions concerning a variety of known and unknown risks,
including but not necessarily limited to changes in market conditions, natural
disasters and other catastrophic events; increased competition, changes in
availability and costs of reinsurance; changes in governmental regulations, in
general economic conditions, as well as other risks more completely described in
the Company's filings with the Securities and Exchange Commission, including its
most recent annual report on Form 10-k. If any of these assumptions or opinions
prove incorrect, any forward-looking statements made on such assumptions or
opinions may also prove materially incorrect in one or more respects.
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