Harbinger Group Inc.
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SEC Filings

PRER14A
HRG GROUP, INC. filed this Form PRER14A on 11/14/1995
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<PAGE>
 
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
 
NOTE 6. DEBT
 
  At September 30, 1994 and 1993, Zapata's consolidated debt consisted of the
following:
 

<TABLE>
<CAPTION>
                                                                1994     1993
                                                               ------- --------
                                                                (IN THOUSANDS)
<S>                                                            <C>     <C>
Senior debt:
  Norex senior secured notes due in 1996 at 13%............... $       $ 50,000
  Norex senior convertible notes due in 1996 at 13%...........           34,234
  Norex unsecured exchangeable notes due in 1996 at 8.5%......  17,500   17,500
  Texas Commerce Bank revolving/term credit facility for
   Energy Industries, interest at prime or Eurodollar rates,
   7.75% at September 30, 1994, due in quarterly installments
   beginning in 1997 through 1999, collateralized by certain
   compression assets.........................................  15,000
  Debt due in monthly installments through 1996,
   collateralized by certain gas gathering systems, average
   interest at prime plus 0.5% (8.25% and 6.5% at September
   30, 1994 and 1993, respectively)...........................   3,775    6,371
  Other debt at 7.7%..........................................     200
                                                               ------- --------
                                                                36,475  108,105
                                                               ------- --------
Subordinated debt:
10 1/4% debentures due 1997...................................  15,621   15,621
10 7/8% debentures due 2001...................................  10,242   10,242
                                                               ------- --------
                                                                25,863   25,863
                                                               ------- --------
Total Debt....................................................  62,338  133,968
                                                               ------- --------
Less current maturities.......................................   2,478    2,384
                                                               ------- --------
Long-term debt................................................ $59,860 $131,584
                                                               ======= ========
</TABLE>

 
  The fair value of total long term debt at September 30, 1994 approximates
book value and at September 30, 1993 was estimated to be $136.7 million.
 
  On May 17, 1993, Zapata completed certain financial transactions with Norex
Drilling Ltd. ("Norex Drilling"), a wholly owned subsidiary of Norex America,
Inc. ("Norex America" and collectively with Norex Drilling and other
affiliates, "Norex"), through which Zapata raised $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 (the "Norex
Agreement"). The Norex Agreement enabled Zapata to refinance its then
outstanding senior debt and substantially reduce the amount of required debt
service payments for the following two years.
 
  Under the terms of the Norex Agreement, Zapata issued $50.0 million of senior
secured notes and $32.6 million of senior convertible notes to Norex. In
addition, Norex purchased 3 million shares of Common Stock for $11.25 million
and 17.5 million shares of $1 Preference Stock for $17.5 million. The $1
Preference Stock was to pay dividends at an annual rate of 8.5% and was
exchangeable into 673,077 shares of Zapata's Tidewater common stock at the
option of Norex. In August 1993, Norex exchanged all of its $1 Preference Stock
for $17.5 million aggregate principal amount of 8.5% unsecured exchangeable
note, maturing May 16, 1996. Such notes are also exchangeable into 673,077
shares of Tidewater common stock. An officer of Norex was elected to the Zapata
Board of Directors in July 1993 and was an executive officer of Zapata from
July 1994 to December 1994.
 
  In December 1993, $73.7 million of the proceeds from the sale of 3.75 million
shares of Zapata's Tidewater common stock were used to prepay $68.5 million of
the Company's 13% senior indebtedness to
 
                                       45

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