DRAFT: 2/22/99
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. 1)*
CROWN VANTAGE INC.
(Name of Issuer)
Common Stock, no par value
(Title of Class of Securities)
CUSIP No. 228622106
(CUSIP Number)
C. Derek Anderson
Plantagenet Capital Management, L.L.C.
220 Sansome Street
Suite 460
San Francisco, California 94104
(415) 433-6536
(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
February 23, 1999
(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-l(b)(3) or (4), check the following box [ ].
Note: Six copies of this statement, including all exhibits, should be filed with
the Commission. See Rule 13d-l(a) for other parties to whom copies are to be
sent.
* The remainder of this cover page shall be filled out for a reporting person's
initial filing on this form with respect to the subject class of securities, and
for any subsequent amendment containing information which would alter
disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be deemed
to be "filed" for the purpose of Section 18 of the Securities Exchange Act of
1934 ("Act") or otherwise subject to the liabilities of that section of that Act
but shall be subject to all other provisions of the Act.
<PAGE>
SCHEDULE 13D
===================
CUSIP No. 228622106
===================
- ---------------------===========================================================
1 Name of Reporting Person
S.S. or I.R.S. Identification No. of Above Person
Plantagenet Capital Fund II, L.P.
- ---------------------===========================================================
2 Check the Appropriate Box if a Member of a Group*
(a) [ ]
(b) [ X ]
- ---------------------===========================================================
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)
[ ]
- ---------------------===========================================================
6 Citizenship or Place of Organization
Cayman Islands
- ---------------------===========================================================
Number of 7 Sole Voting Power
Shares -0-
===========================================================
8 Shared Voting Power
Beneficially
801,000
===========================================================
Owned By Each 9 Sole Dispositive Power
Reporting -0-
===========================================================
10 Shared Dispositive Power
Person With
801,000
- ---------------------===========================================================
11 Aggregate Amount Beneficially Owned By Each Reporting
Person
801,000
- ---------------------===========================================================
12 Check Box if the Aggregate Amount in Row (11)
Excludes Certain Shares*
[ ]
- ---------------------===========================================================
13 Percent of Class Represented by Amount in Row (11)
8.2%
- ---------------------===========================================================
14 Type of Reporting Person*
PN
- ---------------------===========================================================
Page 2 of 8
<PAGE>
SCHEDULE 13D
===================
CUSIP No. 228622106
===================
- ---------------------===========================================================
1 Name of Reporting Person
S.S. or I.R.S. Identification No. of Above Person
Plantagenet Capital Partners, L.P.
- ---------------------===========================================================
2 Check the Appropriate Box if a Member of a Group*
(a) [ ]
(b) [ X ]
- ---------------------===========================================================
3 SEC Use Only
- ---------------------===========================================================
4 Source of Funds*
AF
- ---------------------===========================================================
5 Check Box if Disclosure of Legal Proceedings is Required
Pursuant to Items 2(d) or 2(e)
[ ]
- ---------------------===========================================================
6 Citizenship or Place of Organization
Cayman Islands
- ---------------------===========================================================
Number of 7 Sole Voting Power
Shares -0-
===========================================================
8 Shared Voting Power
Beneficially
801,000
===========================================================
Owned By Each 9 Sole Dispositive Power
Reporting -0-
===========================================================
10 Shared Dispositive Power
Person With
801,000
- ---------------------===========================================================
11 Aggregate Amount Beneficially Owned By Each Reporting
Person
801,000
- ---------------------===========================================================
12 Check Box if the Aggregate Amount in Row (11)
Excludes Certain Shares*
[ ]
- ---------------------===========================================================
13 Percent of Class Represented by Amount in Row (11)
8.2%
- ---------------------===========================================================
14 Type of Reporting Person*
PN
- ---------------------===========================================================
Page 3 of 8
<PAGE>
SCHEDULE 13D
===================
CUSIP No. 228622106
===================
- ---------------------===========================================================
1 Name of Reporting Person
S.S. or I.R.S. Identification No. of Above Person
Plantagenet Capital Management, L.L.C.
- ---------------------===========================================================
2 Check the Appropriate Box if a Member of a Group*
(a) [ ]
(b) [ X ]
- ---------------------===========================================================
3 SEC Use Only
- ---------------------===========================================================
4 Source of Funds*
AF
- ---------------------===========================================================
5 Check Box if Disclosure of Legal Proceedings is Required
Pursuant to Items 2(d) or 2(e)
[ ]
- ---------------------===========================================================
6 Citizenship or Place of Organization
Delaware
- ---------------------===========================================================
Number of 7 Sole Voting Power
Shares -0-
===========================================================
8 Shared Voting Power
Beneficially
801,000
===========================================================
Owned By Each 9 Sole Dispositive Power
Reporting -0-
===========================================================
10 Shared Dispositive Power
Person With
801,000
- ---------------------===========================================================
11 Aggregate Amount Beneficially Owned By Each Reporting
Person
801,000
- ---------------------===========================================================
12 Check Box if the Aggregate Amount in Row (11)
Excludes Certain Shares*
[ ]
- ---------------------===========================================================
13 Percent of Class Represented by Amount in Row (11)
8.2%
- ---------------------===========================================================
14 Type of Reporting Person*
OO
- ---------------------===========================================================
Page 4 of 8
<PAGE>
SCHEDULE 13D
===================
CUSIP No. 228622106
===================
- ---------------------===========================================================
1 Name of Reporting Person
S.S. or I.R.S. Identification No. of Above Person
John J. Zappettini
- ---------------------===========================================================
2 Check the Appropriate Box if a Member of a Group*
(a) [ ]
(b) [ X ]
- ---------------------===========================================================
3 SEC Use Only
- ---------------------===========================================================
4 Source of Funds*
AF
- ---------------------===========================================================
5 Check Box if Disclosure of Legal Proceedings is Required
Pursuant to Items 2(d) or 2(e)
[ ]
- ---------------------===========================================================
6 Citizenship or Place of Organization
United States of America
- ---------------------===========================================================
Number of 7 Sole Voting Power
Shares -0-
===========================================================
8 Shared Voting Power
Beneficially
801,000
===========================================================
Owned By Each 9 Sole Dispositive Power
Reporting -0-
===========================================================
10 Shared Dispositive Power
Person With
801,000
- ---------------------===========================================================
11 Aggregate Amount Beneficially Owned By Each Reporting
Person
801,000
- ---------------------===========================================================
12 Check Box if the Aggregate Amount in Row (11)
Excludes Certain Shares*
[ ]
- ---------------------===========================================================
13 Percent of Class Represented by Amount in Row (11)
8.2%
- ---------------------===========================================================
14 Type of Reporting Person*
IN
- ---------------------===========================================================
Page 5 of 8
<PAGE>
SCHEDULE 13D
===================
CUSIP No. 228622106
===================
- ---------------------===========================================================
1 Name of Reporting Person
S.S. or I.R.S. Identification No. of Above Person
C. Derek Anderson
- ---------------------===========================================================
2 Check the Appropriate Box if a Member of a Group*
(a) [ ]
(b) [ X ]
- ---------------------===========================================================
3 SEC Use Only
- ---------------------===========================================================
4 Source of Funds*
AF
- ---------------------===========================================================
5 Check Box if Disclosure of Legal Proceedings is Required
Pursuant to Items 2(d) or 2(e)
[ ]
- ---------------------===========================================================
6 Citizenship or Place of Organization
United States of America
- ---------------------===========================================================
Number of 7 Sole Voting Power
Shares -0-
===========================================================
8 Shared Voting Power
Beneficially
801,000
===========================================================
Owned By Each 9 Sole Dispositive Power
Reporting -0-
===========================================================
10 Shared Dispositive Power
Person With
801,000
- ---------------------===========================================================
11 Aggregate Amount Beneficially Owned By Each Reporting
Person
801,000
- ---------------------===========================================================
12 Check Box if the Aggregate Amount in Row (11)
Excludes Certain Shares*
[ ]
- ---------------------===========================================================
13 Percent of Class Represented by Amount in Row (11)
8.2%
- ---------------------===========================================================
14 Type of Reporting Person*
IN
- ---------------------===========================================================
Page 6 of 8
<PAGE>
This Amendment No. 1 to Schedule 13D amends the Schedule 13D initially
filed on October 2, 1998 (the "Schedule 13D").
Item 4. Purpose of the Transaction.
Item 4 of the Schedule 13D is amended and restated as follows:
On February 23, 1999, Anderson sent a letter to the Company proposing a
plan to achieve monetization of some of the Company's specialty paper plants.(1)
The purpose of the acquisition of the Shares was for investment, and the
acquisitions of the Shares by Plantagenet II was made in the ordinary course of
business and was not made for the purpose of acquiring control of the Company.
Although no Reporting Person has any specific plan or proposal to acquire
or dispose of Shares, consistent with the investment purpose, each Reporting
Person at any time and from time to time may acquire additional Shares or
dispose of any or all of its Shares depending upon an ongoing evaluation of the
investment in the Shares, prevailing market conditions, other investment
opportunities, liquidity requirements of the Reporting Person and/or other
investment considerations. No Reporting Person has made a determination
regarding a maximum or minimum number of Shares which it may hold.
Also, consistent with the investment purpose, the Reporting Persons have
engaged and may continue to engage in communications with one or more
shareholders of the Company, one or more officers of the Company and/or one or
more members of the board of directors of the Company regarding the Company,
including but not limited to its operations.
Except to the extent the foregoing may be deemed a plan or proposal, none
of the Reporting Persons has any plans or proposals which relate to, or could
result in, any of the matters referred to in paragraphs (a) through (j),
inclusive, of the instructions to Item 4 of Schedule 13D. The Reporting Persons
may, at any time and from time to time, review or reconsider their position
and/or change their purpose and/or formulate plans or proposals with respect
thereto.
Item 7. Materials to be filed as Exhibits.
Item 7 of the Schedule 13D is amended and restated as follows:
There is filed as Exhibit 1 a written agreement relating to the filing of
joint acquisition statements as required by Rule 13d-1(f)(1) under the
Securities Act of 1934, as amended.(2) There is filed as Exhibit 2 the letter
from Anderson to the Company described in Item 4.
- --------
(1) For more complete information, see the text of the letter attached as
Exhibit 2.
(2) Previously filed on October 2, 1998.
Page 7 of 8
<PAGE>
SIGNATURES
After reasonable inquiry and to the best of our knowledge and belief, the
undersigned certify that the information set forth in this statement is true,
complete and correct.
Dated: February 23, 1999
PLANTAGENET CAPITAL FUND II, L.P.
By: PLANTAGENET CAPITAL PARTNERS, L.P.,
its General Partner
By: PLANTAGENET CAPITAL MANAGEMENT L.L.C.,
its General Partner
By: /s/ C. Derek Anderson
--------------------------
Name: C. Derek Anderson
Title: Senior Managing Partner
PLANTAGENET CAPITAL PARTNERS, L.P.
By: PLANTAGENET CAPITAL MANAGEMENT L.L.C.,
its General Partner
By: /s/ C. Derek Anderson
--------------------------
Name: C. Derek Anderson
Title: Senior Managing Partner
PLANTAGENET CAPITAL MANAGEMENT L.L.C.
By: /s/ C. Derek Anderson
--------------------------
Name: C. Derek Anderson
Title: Senior Managing Partner
/s/ John J. Zappettini
--------------------------
John J. Zappettini
/s/ C. Derek Anderson
--------------------------
C. Derek Anderson
Page 8 of 8
EXHIBIT 2
PLANTAGENET
- --------------------------------------------------------------------------------
PLANTAGENET CAPITAL
MANAGEMENT LLC
220 Sansome Street, Suite 460
San Francisco, CA 94104
Tel 415 433 6536
Fax 415 433-6153
www.plantegentcapital.com
February 22, 1999
Mr. Robert Olah
President
Crown Vantage Inc.
300 Lakeside Drive
Oakland, CA 94612
Dear Mr. Olah:
Regrettably, it has come to the point where I must write this letter. As you are
well aware, Crown Vantage ("CVAN" or "the Company") has been experiencing net
losses due to low prices for its products and poor operating margins. The
Company is struggling with a burden of debt exceeding $500 million and is now at
risk of going into default on some of its debt covenants by the end of the
first quarter of 1999. The debt includes more than $80 million of pay-in-kind
("PIK") notes that continue to dilute equity. Meanwhile, the Company's share
price has declined dramatically, resulting in a total market capitalization of
less than $25 million.
As a result, we propose the following:
o Securitize future cash flows from some of CVAN's plants, while hedging
against price fluctuations and channeling the proceeds towards the retirement
and refinancing of existing debt.
o In this regard, Plantagenet has developed a plan to achieve monetization of
some of the Company's specialty paper plants. As part of Plantagenet's plan,
certain plants would be transferred out of the Company and placed in a new
entity, or Special Purpose Vehicle ("SPV"). The Company would own less than
50% of the SPV, while the remaining stake would be held by a syndicate of
investors.
o Plantagenet's proposed SPV would enter into contractual relationships to
obtain pulp at fixed prices for 5 to 10 years. These relationships would link
Crown's mills with pulp producers, and Plantagenet has identified several
facilities that are in need of markets for their pulp.
o Having, hedged its input prices, our proposed SPV would proceed to do the
same with its selling prices by entering into a swap contract with an
industry leader to lock in fixed prices for these products over 5 to 10
years. During this period, the SPV would continue to sell products to its
customers as before.
<PAGE>
o With both input and output prices determined for 5 to 1O years, the SPV
could borrow against the known future income stream from a banking syndicate,
using the proceeds to retire the PIK notes and part of the other high
interest debt.
o The SPV would amortize the loan over the life of the pulp and swap contracts.
At the end of the period, the cycle could be renewed with a similar loan, or
the SPV could be sold or returned to Crown. Throughout the term of the
contracts, the Company would continue to operate its facilities as before
under management and service contracts.
I think it is clear that two major benefits would be quickly achieved by the
proposed arrangement. First, the Company's balance sheet ratios would improve
considerably after the elimination of the PIK notes and retirement of a
substantial portion of the senior notes. Since the Company would own less than
50% of the SPV, it would not have to consolidate the debt incurred by that
entity into its own financial statements. Second, the Company's cost of capital
would be greatly reduced, since the SPV's credit rating would be at or near
investment grade as a result of the relationship with an industry leader
partner.
Circumstances suggest that the Company would be gaining more than it would be
giving up, in as much as it would continue to operate these plants over
long-term management contracts. Time is of the essence! Plantagenet urges that
CVAN seriously consider our proposal.
Sincerely,
/s/ C. Derek Anderson
- ---------------------
C. Derek Anderson
Senior Managing Partner
CDA:ah
