Harbinger Group Inc.
    Print Page | Close Window

SEC Filings

POS AM
HRG GROUP, INC. filed this Form POS AM on 02/22/1994
Entire Document
 << Previous Page | Next Page >>
<PAGE>
    
     In June 1993, Zapata completed the sale of 3.5 million shares of its
Tidewater Inc. ("Tidewater") common stock for a net price of $21.25 per share or
$73.5 million.  Zapata used the proceeds in November 1993 to fund the cash
portion of the purchase price of the acquisition of Energy Industries, Inc.
("Energy Industries").     
    
     In November 1993, Zapata sold an additional 3.75 million shares of its
Tidewater common stock for a net price of $20.75 per share or $77.8 million. The
proceeds of such sale were used to reduce the Company's indebtedness and provide
the capital necessary to expand the Company's natural gas services operations. 
The Company now owns approximately 1.0 million shares of Tidewater common
stock.  Tidewater is an international energy services company with two principal
lines of business: offshore marine services and compression services.     
    
     The Company has completed its exit from the offshore drilling business in
which it historically had a significant presence.  Zapata sold its offshore
drilling rig fleet on October 31, 1990 to Arethusa for total consideration of
$298.0 million.  In conjunction with the Rig Sale, Zapata was required to make a
$17.5 million investment in Arethusa (net proceeds received on October 31, 1990
were $280.5 million).  During fiscal 1993, Zapata disposed of its entire
investment in Arethusa for $11.8 million.     
    
     In May 1993, Zapata completed a refinancing of its senior debt which
enabled the Company to move forward with its strategic plan.  Zapata raised a
total of $111.4 million from the issuance of debt and equity pursuant to a
Second Amended and Restated Master Restructuring Agreement dated as of April 16,
1993, as amended (as so amended, the "Norex Agreement'), between Zapata and
Norex Drilling Ltd.  ("Norex Drilling"), a wholly owned subsidiary of Norex
America (Norex America, collectively with Norex Drilling and other affiliates,
is referred to herein as "Norex").  The Norex Agreement enabled the Company to
refinance its then outstanding senior debt and substantially reduced the amount
of required debt service payments for fiscal years 1994 and 1995.     
    
     In December 1993, $73.7 million of the proceeds from the November sale of
Tidewater common stock was used to prepay $68.5 million of the 13% senior
indebtedness to Norex, along with accrued interest and a $3.5 million prepayment
premium.  In connection with this prepayment to Norex, the Norex Agreement was
amended to remove or lessen various restrictions on the Company.  The Company is
no longer required to maintain any financial ratios and is no longer subject to
limitations on its ability to incur additional indebtedness or contingent
obligations, to make capital expenditures, to pay dividends or to enter into
merger or consolidation transactions, to liquidate, wind up or dissolve or to
make investments or loans.  In addition, the Company is no longer subject to
limitations on the creation of liens or the sale of assets, except in connection
with Energy Industries and certain related subsidiaries.  The Company will
remain subject to a covenant in the Norex Agreement which requires it to
maintain a consolidated tangible net worth of at least $100 million.     
    
NATURAL GAS SERVICES--COMPRESSION    
    
     In November 1993, Zapata purchased the natural gas compression businesses
of Energy Industries and certain other affiliated companies as well as certain
real estate used by the business.  Energy Industries is engaged in the business
of renting, fabricating, selling, installing and servicing natural gas
compressor packages.  Energy Industries operates the fifth largest rental fleet
of natural gas compressor packages in the United States.  The Energy Industries
fleet of approximately 700 compressor packages is located primarily in Texas,
Louisiana, Arkansas, Oklahoma and New Mexico, as well as offshore in the Gulf of
Mexico.  Total consideration paid for the purchase of Energy Industries and for
a related noncompetition agreement (collectively, the "Energy Industries
Acquisition") was $90.9 million.  The purchase price consisted of $75.2 million
and 13.5 million shares of Zapata common stock (the "Common Stock") valued at
$1.16 per share, which approximated the average trading price prior to closing
of the acquisition.     
    
     Operations.  A natural gas compressor package consists of a compressor, a
natural gas engine or electric motor, a heat exchanger, a control panel and
assorted piping and tubing.  Natural gas compression is used in the production,
processing and delivery of natural gas.  Energy Industries primarily supplies
natural gas compressor packages in natural gas production and processing
applications.  In natural gas production applications, natural gas compression
is used to increase the flow rate of gas wells with low reservoir pressures.  In
natural gas processing applications, natural gas compression is used in the
process of separating the various hydrocarbon components of the wellhead natural
gas stream.  In interstate natural gas pipeline applications, natural gas
compression is used to increase the pressure of natural gas     

                                       8

 << Previous Page | Next Page >>