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SECURITIES AND EXCHANGE COMMISSION
Washington, DC 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): September 20, 1999
SEQUA CORPORATION
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(Exact name of registrant as specified in charter)
Delaware
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(State or other jurisdiction of incorporation)
1-804 13-1885030
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(Commission File No.) (FEI Number)
200 Park Avenue, New York, New York 10166
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(Address of principal executive office) (Zip Code)
Registrant's telephone number
(including area code): (212) 986-5500
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Item 5. Other Events
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Sequa Corporation is engaged in the automotive airbag inflator
business through both its wholly-owned subsidiary Atlantic Research
Corporation ("ARC") and ARC's 50% equity investment in BAG SpA, an
Italian joint venture. Breed Technologies, Inc. ("Breed"), a
manufacturer of automotive safety restraint products, is a major
customer of ARC, accounting for $69.9 million of ARC's 1998 annual
sales and $43.8 million of ARC's sales in the first half of 1999.
Additionally, Breed holds a 50% equity investment in BAG SpA.
Breed Italian Holdings, S.r.l., a foreign subsidiary of Breed, is
the sole customer of BAG SpA. BAG SpA, which purchases inflator
components from ARC, accounted for $26.5 million of ARC's 1998
annual sales and $9.1 million of ARC's sales in the first half of
1999.
On September 20, 1999 (the "Filing Date"), Breed and certain
of its US subsidiaries filed voluntary petitions for reorganization
under Chapter 11 of the United States Bankruptcy Code in the United
States Bankruptcy Court for the District of Delaware. Breed has
announced that it received a commitment from its lending group for
up to $125 million of debtor-in-possession financing which Breed
expects to provide adequate funding for its post-petition trade and
employee obligations. The Bankruptcy Court has approved Breed's
borrowings under the debtor-in-possession facility on an interim
basis and authorized Breed to borrow up to $85 million of the
facility pending final approval in early October. Subsequent to
the Filing Date, ARC began shipping to Breed on a COD basis.
As of the Filing Date, ARC had receivables due from Breed US
affiliates totaling $12.7 million. In addition, ARC had $1.3
million of receivables due from Breed foreign entities which are
not part of the bankruptcy filing and $16.3 million of receivables
due from BAG SpA. At the Filing Date, BAG SpA had trade accounts
receivable in the amount of approximately $16.7 million which were
substantially all current and $0.6 million of net non-trade
receivables due from Breed foreign entities which were not part of
the filing. Neither ARC nor BAG SpA has any significant reserves
related to Breed accounts receivable.
At this time, Sequa Corporation is unable to predict to what
extent, if any, ARC's receivables from Breed will not be collected
or how Sequa's sales to Breed and its subsidiaries will be
affected.
In the opinion of management, the ultimate impact of Breed's
financial difficulties is not expected to have a material adverse
effect on Sequa's consolidated financial position, although Breed's
situation could have a significant impact on Sequa's future results
of operations.
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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.
SEQUA CORPORATION
By:/s/ Stuart Z. Krinsly
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Stuart Z. Krinsly
Senior Executive Vice President
and General Counsel
Dated: September 29, 1999
