Harbinger Group Inc.
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SEC Filings

DEF 14A
HRG GROUP, INC. filed this Form DEF 14A on 11/15/1995
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as amended (as so amended, the "Norex Agreement").  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 notes, maturing May 16, 1996.  The 8.5%
unsecured notes were exchangeable into the 673,077 shares of Tidewater common
stock for which the $1 Preference Stock had previously been exchangeable.  In
March 1995 the Company entered into an agreement with Norex under which the
Company was permitted to sell the shares of Tidewater, Inc. common stock and
apply the net proceeds toward repayment of the 8.5% unsecured notes.  All of
such shares were sold in March 1995 for $12.7 million and the proceeds applied
to reduce the outstanding principal amount of the 8.5% unsecured notes from
$17.5 million to $4.8 million in April 1995.  On April 10, 1995 Zapata
repurchased from Norex 2,250,000 shares of the Company's Common Stock for an
aggregate purchase price of $9,000,000.  Pursuant to a conditional resignation
letter dated March 7, 1995, Mr. Siem's resignation from the Company's Board of
Directors became effective when the repurchase of the 2,250,000 shares of the
Company's Common Stock from Norex, the receipt by Norex of the proceeds of the
sale of the Tidewater, Inc. common stock and the payment to Mr. Siem of certain
unpaid directors' fees and reimbursed expenses had all been completed.  As a
result, Mr. Siem's resignation from the Board of Directors became effective on
April 10, 1995.


          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 Norex, along with accrued
interest, and to pay a $3.5 million prepayment premium.  Also, Zapata wrote off
$3.3 million of previously deferred expenses related to the origination of such
indebtedness.  In September 1994, Zapata repaid the remaining balance of its 13%
senior convertible indebtedness to Norex and a required prepayment penalty of
$655,000.


          The Company also entered into an administrative services arrangement
with Norex Drilling effective June 1, 1993, pursuant to which it provided office
space and certain administrative services to Norex Drilling.  Norex Drilling
reimbursed the Company on a quarterly basis for the full cost of providing such
services as and when incurred, plus an administrative fee of 2.5%.  In fiscal
1994, the Company billed Norex Drilling $104,000 under this arrangement, which
was terminated in December 1994.


          On June 16, 1995, the Company and Malcolm Glazer entered into a non-
binding letter of intent under which the Company would acquire 4,189,298 shares,
or 31% of the outstanding common stock of Envirodyne Industries, Inc.
("Envirodyne") in a private transaction in exchange for an unsecured,
subordinated promissory note to be issued by the Company.  The note will bear
interest payable quarterly at a rate equal to the reference rate of Chemical
Bank.  Earlier, a special committee of disinterested directors was established
by the Company's Board of Directors to evaluate this possible acquisition and
the evaluation presently is underway.  The acquisition of the shares is subject
to, among other things, the completion of the Committee's evaluation process;
receipt by the Committee of a fairness opinion from Wertheim Schroder & Co.
Incorporated, an investment banking firm that was retained by the Committee to
review the proposed acquisition; negotiation and execution of a definitive
purchase agreement and expiration of the waiting period under the Hart-Scott-
Rodino Antitrust Improvements Act of 1976.  The purchase price will be
determined with reference to the 30-day average sales price of Envirodyne's
common stock.

          For information on Mr. Mackin's consulting and retirement Agreement
with the Company, see "Compensation of Directors" above.

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