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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
Date of Report (Date of earliest event reported) March 1, 2000
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CROWN PAPER CO.
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(Exact name of registrant as specified in its charter)
Virginia 33-93494 54-1752385
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(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
300 Lakeside Drive, Oakland CA 94612-3592
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (510) 874-3400
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Not Applicable
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(Former name or former address, if changed since last report)
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Item 5. Other Events.
See exhibit 99.1 for copy of news release.
Item 7. Financial Statements and Exhibits.
(c) Exhibits
Exhibit No. Description
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99.1 The Company reaches agreement regarding
additional liquidity and seeks
recapitalization.
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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.
CROWN PAPER CO.
March 1, 2000 /s/ Michael J. Hunter
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Michael J. Hunter
Senior Vice President, Chief Accounting Officer
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Exhibit 99.1
Cincinnati, Ohio
Wednesday, March 1, 2000
CROWN VANTAGE REACHES AGREEMENT REGARDING
ADDITIONAL LIQUIDITY
Company to Seek Recapitalization
Cincinnati, Ohio - March 1, 2000 - Crown Vantage (OTC Bulletin Board: CVAN), an
international manufacturer and marketer of specialized papers for printing,
publishing, packaging and converting, announced today that the Company has
reached an agreement with a new third party lender to provide additional
financing through the Company's current bank credit agreement. Crown Vantage
said the additional financing will provide the Company with $26 million in
incremental liquidity under its bank credit facility. The financing remains
subject to certain conditions, including continuing due diligence.
Crown Vantage said that its bank lenders have waived until March 10, 2000, a
default under the Company's credit agreement that otherwise would have occurred.
The waiver applies to a tangible net worth covenant. Crown Vantage is discussing
with its bank lenders, and expects to receive in conjunction with final approval
of the new financing, an amendment to its credit facility that would cover the
balance of the year.
The implementation of the additional financing is expected to occur in two
stages. The first, to provide approximately $14 million of additional liquidity,
is expected to occur on or about March 3, 2000; the remainder is expected to be
available on or about March 10, 2000.
Under the terms of the Company's outstanding Senior Subordinated Notes, an
interest payment of approximately $13.75 million is scheduled to be made on
March 1, 2000. Under the terms of the indenture governing the Senior
Subordinated Notes, a default under the Senior Subordinated Notes would not
occur until 30 days after the date initially scheduled for the interest payment.
The Company has elected to avail itself of the grace period in the indenture for
the Senior Subordinated Notes until at least the receipt of the second phase of
the additional liquidity through the bank and credit agreement.
Crown Vantage has taken significant steps to streamline its operations and
improve its financial performance through the retention of new management, the
sale of assets and the closing of unprofitable facilities.
In addition, Crown Vantage said that it retained the investment banking firm
Peter J. Solomon Co. in the fall of 1999 in order to assist management in
analyzing and developing strategic alternatives to recapitalize the Company. The
Company said that such alternatives may include the sale of some or all of the
Company's assets and/or a comprehensive financial restructuring of the Company.
Crown Vantage is currently in discussions with a third party with respect to a
recapitalization of the Company. There can be no assurances that such
discussions will result in a transaction.
"While we have made significant strides, we need to accelerate the restructuring
of our operations and continue to improve performance," said Robert Olah,
president and chief executive officer of Crown Vantage. "Furthermore, our
capital structure reduces our flexibility and makes it difficult to attract
fresh capital necessary to grow the business. We believe it is in the best
interest of the Company to address our nearer-term capital requirements and
reduce our long-term indebtedness."
More
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Crown Vantage is one of the world's leading manufacturers of value-added papers
for printing, publishing and specialty packaging. With nine mills
internationally, the Company has capacity to manufacturer more than 750,000 tons
of specialty papers per year. The Company's diverse products are tailored for
the special needs of target markets. End users include specialty magazines and
catalogs, financial printing and corporate communications, packaging and product
labels, coffee filters and disposable medical garments - and hundreds more. For
more information, visit www.crownvantage.com.
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Safe Harbor Statement: This news release contains certain forward-looking
statements concerning Crown Vantage's positioning for the future. As required by
the Private Securities Litigation Reform Act of 1995, the company advises that
forward-looking statements are subject to risks and uncertainties that could
cause actual results to differ materially from those stated or inferred. These
could include the failure of Crown Vantage to improve financial results or to
maintain liquidity; the ability of the company to obtain liquidity; the ability
of the company to close on a recapitalization; the inability of the company to
successfully amend debt covenants for fiscal 2000; sudden marketing changes in
product pricing or the cost of raw materials; failure of the company to
successfully implement its value-added marketing strategy or other uncertainties
listed from time to time in the company's filings with the SEC.
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