<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Schedule 13D
Under the Securities Exchange Act of 1934
(Amendment No. 2)*
ASCHE TRANSPORTATION SERVICES, INC.
(Name of Issuer)
COMMON STOCK, PAR VALUE $ .0001
(Title of Class of Securities)
04362T100
(CUSIP Number)
KEVIN C. DOOLEY, ESQ.
SENIOR VICE PRESIDENT AND LEGAL COUNSEL
CHURCHILL CAPITAL, INC.
3100 METROPOLITAN CENTRE
333 SOUTH 7TH STREET
MINNEAPOLIS, MINNESOTA 55402
(612) 673-6708
- --------------------------------------------------------------------------------
(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
May 19, 2000
(Date of Event which Requires Filing
of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(b)(3) or (4), check the following box.[_]
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CUSIP No. 04362T100 13D Page 2 of 11 Pages
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==============================================================================
1.
NAMES OF REPORTING PERSONS
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (entities only).
CHURCHILL ENVIRONMENTAL & INDUSTRIAL EQUITY PARTNERS, L.P.
==============================================================================
2.
CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (See Instructions)
(a) [_]
(b) [_]
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3.
SEC USE ONLY
==============================================================================
4.
SOURCE OF FUNDS
WC
==============================================================================
5.
CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(d) OR 2(e) [_]
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CITIZENSHIP OR PLACE OF ORGANIZATION
6 DELAWARE
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7.
NUMBER OF SOLE VOTING POWER
UNITS
BENEFICIALLY ===========================================================
OWNED BY 8.
EACH SHARED VOTING POWER
REPORTING 4,138,983
PERSON WITH ===========================================================
9.
SOLE DISPOSITIVE POWER
===========================================================
10.
SHARED DISPOSITIVE POWER
2,666,667
==============================================================================
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
4,138,983
==============================================================================
12. CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
[_]
==============================================================================
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
48%
==============================================================================
14. TYPE OF REPORTING PERSON
PN
==============================================================================
<PAGE>
SCHEDULE 13D
CUSIP NO. 04362T100 Page 3 of 11 Pages
-----------------
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NAMES OF REPORTING PERSONS
1 I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (entities only).
CHURCHILL CAPITAL ENVIRONMENTAL, L.L.C.
- ------------------------------------------------------------------------------
CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (See Instructions)
2 (a) [_]
(b) [_]
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SEC USE ONLY
3
- ------------------------------------------------------------------------------
SOURCE OF FUNDS (See Instructions)
4
AF
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CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(d) or 2(e) [_]
5
- ------------------------------------------------------------------------------
CITIZENSHIP OR PLACE OF ORGANIZATION
6
DELAWARE
- ------------------------------------------------------------------------------
SOLE VOTING POWER
7
NUMBER OF
SHARES -----------------------------------------------------------
SHARED VOTING POWER
BENEFICIALLY 8
OWNED BY 4,138,983
-----------------------------------------------------------
EACH SOLE DISPOSITIVE POWER
9
REPORTING
PERSON -----------------------------------------------------------
SHARED DISPOSITIVE POWER
WITH 10
2,666,667
- ------------------------------------------------------------------------------
AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
11
4,138,983
- ------------------------------------------------------------------------------
CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
12
(See Instructions)
- ------------------------------------------------------------------------------
PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
13
48%
- ------------------------------------------------------------------------------
TYPE OF REPORTING PERSON (See Instructions)
14
CO
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<PAGE>
SCHEDULE 13D
CUSIP NO. 04362T100 Page 4 of 11 Pages
-----------------
- ------------------------------------------------------------------------------
NAMES OF REPORTING PERSONS
1 I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (entities only).
CHURCHILL CAPITAL, INC.
- ------------------------------------------------------------------------------
CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (See Instructions)
2 (a) [_]
(b) [_]
- ------------------------------------------------------------------------------
SEC USE ONLY
3
AF
- ------------------------------------------------------------------------------
SOURCE OF FUNDS (See Instructions)
4
- ------------------------------------------------------------------------------
CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(d) or 2(e) [_]
5
- ------------------------------------------------------------------------------
CITIZENSHIP OR PLACE OF ORGANIZATION
6
MINNESOTA
- ------------------------------------------------------------------------------
SOLE VOTING POWER
7
NUMBER OF
SHARES -----------------------------------------------------------
SHARED VOTING POWER
BENEFICIALLY 8
OWNED BY 4,138,983
-----------------------------------------------------------
EACH SOLE DISPOSITIVE POWER
9
REPORTING
PERSON -----------------------------------------------------------
SHARED DISPOSITIVE POWER
WITH 10
2,666,667
- ------------------------------------------------------------------------------
AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
11
4,138,983
- ------------------------------------------------------------------------------
CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
12
(See Instructions)
- ------------------------------------------------------------------------------
PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
13
48%
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TYPE OF REPORTING PERSON (See Instructions)
14
CO
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<PAGE>
PAGE 2
SCHEDULE 13D
------------
This Amendment No. 2 relates to shares of Common Stock, $0.0001 par value
per share ("Common Stock"), of Asche Transportation Services, Inc., a Delaware
------------
corporation (the "Issuer") with principal offices located at 10214 North Mount
------
Vernon Road, Shannon, Illinois 61078, and is being filed jointly by Churchill
Environmental & Industrial Equity Partners, L.P., a Delaware limited partnership
("CEIP"), Churchill Capital Environmental, L.L.C., a Delaware limited liability
----
company ("CCE"), and Churchill Capital, Inc., a Minnesota corporation ("CCI",
--- ---
and together with CEIP and CCE, the "Reporting Persons"). This Amendment No. 2
-----------------
supplements and amends the statement on Schedule 13D originally filed with the
Commission on September 17, 1999, as amended by Amendment No. 1 filed with the
Commission on or about October 6, 1999 ("Amendment No. 1") (as amended, the
---------------
"Statement").
---------
Item 3. Source and Amount of Funds or Other Consideration
- ------- -------------------------------------------------
If the Proposed Transaction (as defined below) is consummated, the Issuer
will issue the Warrants (as defined below) to CEIP in consideration of the
$7,000,000 loan by CEIP to Specialty Transportation Services, Inc., a wholly
owned subsidiary of the Issuer ("STS"). The proceeds of such loan are to be
---
used as working capital by STS and to fund an intercompany loan in the amount of
$2,250,000 by STS to the Issuer. The Warrants would be issued to CEIP by the
Issuer as part of the Proposed Transaction, and shares of Common Stock would be
issued to CEIP by the Issuer upon exercise of the Warrants. The source of the
funds to be loaned to STS by CEIP, a private investment fund, as part of the
Proposed Transaction are investment funds provided to CEIP by its limited
partners.
Item 4. Purpose of Transaction
- ------- ----------------------
On May 19, 2000, CEIP delivered a term sheet to the Special Committee of
the Board of Directors of the Issuer setting forth the terms of a proposed
transaction (the "Proposed Transaction") pursuant to which CEIP would lend
--------------------
$7,000,000 in cash to STS (the "Transaction Loan") in exchange for a note (the
----------------
"Note") convertible at any time into at least 70% but no more than 85% of the
- -----
common stock of STS (such variance to depend upon the amount and form of
interest paid under the Note and whether certain earnings targets for STS's 2000
fiscal year are achieved). If the Issuer's Board of Directors approves the
Proposed Transaction, the documentation of the Transaction Loan would contain
certain restrictions by CEIP on the use of the proceeds thereof by STS. Under
the terms of the Proposed Transaction, CEIP would permit a portion of the
proceeds of the Transaction Loan to be used to fund an intercompany loan of
$2,250,000 by STS to the Issuer (the "Intercompany Loan"), and the Issuer would
-----------------
issue to CEIP warrants (the "Warrants") to acquire the number of shares of
--------
Common Stock that, if exercised, would result in CEIP owning 55% of the
outstanding Common Stock on a fully diluted basis when combined with all shares
of Common Stock previously acquired by CEIP (a) at the closing under that
certain Stock Purchase Agreement among CEIP, the Issuer, STS, Asche Transfer,
Inc. and AG Carriers Inc., dated as of August 17, 1999 (the "Purchase
--------
Agreement"), and (b) pursuant to an acceleration of the issuance of additional
- ---------
shares of Common Stock to CEIP under certain circumstances under the Purchase
Agreement. The Warrants would be exercisable by CEIP during the five year period
following their issuance for an exercise price of $.01 per share of Common
Stock. Following issuance of the Warrants to CEIP, the Reporting Persons would
have beneficial ownership of 55% of the Common Stock, and upon exercise of the
Warrants the Reporting Persons would hold dispositive power over 55% of the
Common Stock.
The Intercompany Loan would be made to the Issuer to provide it additional
cash to enable it to pay expenses to be incurred in connection with the Proposed
Transaction, finance completion
<PAGE>
PAGE 3
of its pending audit, implement certain efficiencies (including the combination
of certain business units of its subsidiaries) and pursue future strategies. The
Proposed Transaction contemplates that the Intercompany Loan would be evidenced
by a three year note accruing interest at a rate equal to the applicable federal
rate in effect from time to time.
In addition, in connection with the Proposed Transaction, certain existing
institutional debt of STS in the aggregate amount of $34.7 million would be
restructured and a new amortization schedule with respect thereto would be
effected. The Note would be secured by a second priority lien on all the assets
of STS and subordinated to such existing debt.
Upon exercise of the Warrants, CEIP would hold a majority of the
outstanding Common Stock and consequently would hold on its own the right to
elect and remove members of the Issuer's Board of Directors. Upon obtaining such
control CEIP plans to propose that the size of the Issuer's Board of Directors
be reduced and that additional CEIP Board designees be elected.
Item 5. Interest in Securities of the Issuer
- ------- ------------------------------------
As of the date of filing of this Amendment No. 2 to the Statement, the
Reporting Persons directly own 2,666,667 shares of Common Stock, representing
approximately 31% of the outstanding Common Stock. And as more fully described
and reported in Amendment No. 1, CEIP, CCE and CCI may be deemed to have
"beneficial ownership" (as defined in Rule 13d-3 of the Securities Exchange Act
of 1934, as amended (the "Exchange Act")) of approximately an additional 17% of
------------
the shares of outstanding Common Stock. As described above, if the Proposed
Transaction is consummated and the Warrants are exercised by CEIP, CEIP would
hold 55% of the outstanding Common Stock.
Item 6. Contracts, Arrangements, Understandings or Relationships with Respect
- ------- ---------------------------------------------------------------------
to Securities of the Issuer
---------------------------
If the Proposed Transaction is consummated and the Warrants are issued,
CEIP would own and hold the right to acquire an aggregate of 55% of the
outstanding shares of Common Stock on a fully diluted basis.
Neither the filing of this Statement nor any of its contents shall be
deemed to constitute an admission that the Reporting Persons (or any of them)
are the beneficial owners of any shares of Common Stock referred to herein for
purposes of Section 13(d) of the Exchange Act or for any other purpose, and such
beneficial ownership is expressly disclaimed.
<PAGE>
PAGE 4
SIGNATURE
---------
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
Dated: May 24, 2000
CHURCHILL ENVIRONMENTAL & INDUSTRIAL
EQUITY PARTNERS, L.P., a Delaware
limited partnership
By Churchill Capital Environmental, L.L.C.,
a Delaware limited liability company
Its General Partner
By Churchill Capital, Inc.
Its Managing Agent
By: /s/ Kevin C. Dooley
------------------------------------
Name: Kevin C. Dooley
Title: Senior Vice President and Legal
Counsel
<PAGE>
PAGE 5
SIGNATURE
---------
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
Dated: May 24, 2000
CHURCHILL CAPITAL ENVIRONMENTAL, L.L.C.
By Churchill Capital, Inc.
Its Managing Agent
By: /s/ Kevin C. Dooley
--------------------------------
Name: Kevin C. Dooley
Title: Senior Vice President and
Legal Counsel
<PAGE>
PAGE 6
SIGNATURE
---------
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
Dated: May 24, 2000
CHURCHILL CAPITAL, INC.
By: /s/ Kevin C. Dooley
------------------------------------
Name: Kevin C. Dooley
Title: Senior Vice President and Legal
Counsel
<PAGE>
EXHIBIT INDEX
-------------
Exhibit 7.1. Summary of Terms and Conditions delivered by CEIP to the
------------
Special Committee of the Board of Directors of the Issuer on
May 19, 2000, containing the terms of the Proposed
Transaction
<PAGE>
EXHIBIT 7.1
-----------
Churchill Environmental & Industrial Equity Partners, L.P.
Specialty Transportation Services, Inc.
$7.0 million Senior Subordinated Facility
______________________________________________
Asche Transportation Services, Inc.
$2.25 million Inter-company Loan
__________________________________________________________________________
Summary of Terms and Conditions
This Summary of Terms and Conditions does not constitute a binding commitment or
contract, and the Investor's investment in Specialty Transportation Services,
Inc. ("STS") is contingent upon, among other things, execution of definitive
---
agreements.
Senior Subordinated Facility
- ----------------------------
Borrower: STS
Purpose: The investment will provide much-needed liquidity via a
better-suited capital structure to be utilized by the board
and management in execution of current turn-around efforts
and pursuit of future growth opportunities.
Facility: $7.0 million Senior Subordinated Facility, non-callable and
convertible at any time subsequent to funding
Investor: Churchill Environmental & Industrial Equity Partners, L.P.
("Churchill")
---------
Drawdown: $7.0 million to be invested at closing and used to pay down
the Mellon Bank revolver. Mellon will permit drawdowns on
the revolver up to $7.0 million without restriction, and the
funds will be used to meet the cash requirements of STS, as
established in a 90-day projected cash flow budget prepared
by STS which is satisfactory to Churchill.
Closing: As soon as practical
Maturity: Five-Year Note
Interest Rate: Floating at Mellon Prime Rate; Borrower will have PIK option
(subject to the limitation on equity ownership by Churchill
described below); customary default rate
Conversion Ratio: $7.0 million principal amount is convertible into 70% of STS
common stock on a fully diluted basis. Unpaid PIK interest
is convertible into additional common stock at the same
ratio as the principal conversion. The total ownership of
STS common stock on a fully diluted basis, from the
conversion of the principal amount and unpaid PIK interest,
is not to exceed 80%, except as provided below.
If STS does not achieve 2000 EBITDA of at least $7.3
million, Churchill's maximum equity participation will be
increased according to the
<PAGE>
following formula: the $7.0 million principal amount will be
convertible into an additional 1% of the total ownership of
STS common stock on a fully diluted basis for every $260,000
by which 2000 EBITDA is less than $7,300,000, to a maximum
5% additional total ownership. For example, if 2000 EBITDA
is $7,040,000, the $7.0 million principal amount will be
convertible into 71% of the total ownership of STS common
stock on a fully diluted basis; if 2000 EBITDA is
$6,520,000, the principal amount will be convertible into
73% of the total ownership of STS common stock on a fully
diluted basis; and if 2000 EBITDA is $6,390,000, the
principal amount will be convertible into 73.5% of the total
ownership of STS common stock on a fully diluted basis. The
80% limit on Churchill's total direct ownership of STS
common stock described in the immediately preceding
paragraph will be revised upward, to a maximum of 85%, to
accommodate the application of the formula contained in this
paragraph in the event 2000 EBITDA of STS is less than $7.3
million.
Inter-company
Loan: $2.25 million inter-company loan to be allowed to be made by
STS to its parent, Asche Transportation Services, Inc.
("ATS"), to be used in part to pay all transaction expenses.
---
Up to an additional $600,000 will be used to repay the
inter-company amount due from STS to another ATS subsidiary.
(See terms and conditions below)
Security: Second priority security interest behind existing bank
creditors in all collateral (including real estate and
leasehold interests)
Fees: ATS shall pay a 3% closing fee, in addition to Churchill's
legal and other professional fees incurred in connection
with the financing.
Covenants and
Default Provisions: Affirmative and Negative Covenants similar to existing bank
group loan documents and cross defaulted with existing STS
bank group loan document default provisions, customary
default and remedy provisions
Conditions: Subject to:
. Execution of satisfactory Inter-creditor agreement
. Satisfactory fairness opinion
. Satisfactory opinion of counsel
. No material adverse change
. Obtain all material consents
. Satisfactory documentation of inter-company loan
. Negotiate satisfactory forbearance, standstill and
waivers with STS and ATS bank group
. Acceleration of the adjustment to Churchill's common
stock position in ATS under the 1999 investment
documents
. STS trade creditors exposure of $750,000 to be termed
out over 9-12 months, or settled for some discount
. Preparation of a three-year business plan for STS
(including financial projections) which is
acceptable to Churchill
STS Banks to agree to restructure existing exposure of $34.7
million (consisting of $18.0 million revolver, $14.1 million
term loan and $2.6 million over-advance) as follows:
New revolver $18.0 million
New term loan $16.7 million
<PAGE>
Amortization schedule for new term loan:
<TABLE>
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<S> <C> <C>
Year 1 $1.5 million (quarterly payments of $375,000 commencing 9/30/00)
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Year 2 $2.0 million (quarterly payments of $500,000)
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Year 3 $2.0 million (quarterly payments of $500,000)
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Year 4 $2.0 million (quarterly payments of $500,000)
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Year 5 $2.0 million (quarterly payments of $500,000)
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Year 6 $2.0 million (quarterly payments of $500,000)
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Year 7 $5.2 million balloon
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</TABLE>
No change to interest rate
Priority: Senior Subordinated Facility shall be contractually
subordinated to STS bank group, provided that Churchill will
have priority to extent full $7.0 million is not drawn on
revolver
ATS Warrants: Churchill to receive 5-year warrants to acquire common stock
of ATS for an exercise price of $0.01 per share whereby
Churchill increases its ownership, on a fully diluted basis,
to 55% of ATS (including the acceleration of the equity
adjustment feature). Conversion feature assumes 55% interest
meets the criteria contained in Parent's articles/bylaws
concerning controlling interest.
<PAGE>
Inter-company Loan
- ------------------
Beneficiary: Asche Transportation Services, Inc. ("ATS" or "Parent")
--- ------
Purpose: The inter-company loan will ease the immediate cash crisis
of the Parent and its subsidiaries and provide the platform
whereby management, at the direction of the board, may work
toward completion of the pending audit, initiate combining
the business units of Asche Transfer, Inc. ("ATI") and AG
---
Carriers, Inc. ("AGC") in pursuit of turn-around efforts and
---
evaluation of future strategies.
Form: Inter-company loan
Source of Funds: Churchill via loan to Specialty Transportation Services,
Inc. (STS)
Drawdown: $ 2.25 million to be deposited with the American National
Bank on behalf of ATS, with up to an additional $600,000
being paid to ATI on account of inter-company amounts due to
ATI by STS. The total value of the loan is $2.25 million.
Draw down to be based on the cash requirements of ATI, ATS
and AGC, as established in 90 day projected cash flow budget
prepared by ATS, ATI and AGC, which is satisfactory to
Churchill.
Maturity: Three Year Note, with the proviso of the earlier of three
years or expiration of the ATI loan facility
Interest Rate: Equal to the Applicable Federal Rate in effect from time to
time
Closing: As soon as practical
Security: Second priority security interest in ATI and AGC assets
behind existing bank creditors in all collateral (including
real estate and leasehold interests)
Fees: ATS shall pay Churchill's legal and other professional fees
in connection with the financing.
Default Provisions: Cross defaulted with existing bank loan document default
provisions
Conditions: Subject to:
. Execution of satisfactory Inter-creditor agreement
. Satisfactory fairness opinion
. Satisfactory opinion of counsel
. ATS, ATI and AGC trade credit exposure of $750,000 to
be termed out over 9-12 months, or settled for some
discount
. Preparation of a three-year business plan for ATS,
ATI and AGC (including financial projections) which
is acceptable to Churchill
Priority: Inter-company loan shall be contractually subordinate to the
ATI bank creditor.
