SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 8-K
TO CURRENT REPORT ON FORM 8-K
PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report: Date of Earliest Event Reported:
November 15, 1999 November 15, 1999
COMMISSION FILE NUMBER 0-11663
CHANCELLOR CORPORATION
(Exact name of registrant as specified in its charter)
MASSACHUSETTS 04-2626079
(State of other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
210 SOUTH STREET
BOSTON, MASSACHUSETTS 02111
(Address of principal executive offices and zip code)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (617) 368-2700
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
On September 30, 1999, Chancellor Africa Corporation (Pty) Ltd. ("Chancellor
Africa" or the "Company"), an indirect wholly owned subsidiary of Chancellor
Corporation ("Chancellor") acquired approximately 15.1% of the issued and
outstanding capital stock of Afinta Motor Corporation (Pty) Ltd., a corporation
organized under the laws of the Republic of South Africa ("AMC") pursuant to a
Stock Purchase Agreement (the "Agreement") dated September 30, 1999.
AMC is one of the largest manufacturers/assemblers of light commercial vehicles
including trucks, tractor trailers, buses, automobiles and sport utility
vehicles in the Republic of South Africa. The Company's investment into AMC
will provide Chancellor with the ability to capitalize on a number of
opportunities available in the fast growing South African market. The Company
will also be performing in an advisory capacity to AMC's captive finance
subsidiary Afinta Financial Services (Pty) Ltd. with respect to the structuring
of vehicle financing packages and the development of a secondary market for
off-lease transportation equipment. The Company views this as an investment and
has accounted for said investment under the equity method of accounting.
Additionally, on September 30, 1999, the Company acquired the exclusive world
wide distribution rights to all of AMC's current and future product lines with
the exception of Africa, England, Scotland and Wales pursuant to an Exclusive
World Wide Distribution Agreement by and between Chancellor Africa, Africa
Finance Corporation (Pty) Ltd., a wholly owned subsidiary of Chancellor Africa,
and AMC dated September 30, 1999.
The consideration paid by the Company in connection with the investment into AMC
and the acquisition of the exclusive world wide distribution rights (within
previously defined territory) consisted of 350,000 shares of a newly created
Series B Convertible Preferred Stock of Chancellor (the "Series B Preferred
Stock") (valued at $1.25 per common share, on an as converted basis, by New
Africa Opportunity Fund). The Series B Preferred Stock has a liquidation
preference of $20.00 per share and is convertible into shares of Chancellor's
Common Stock, $.01 par value, on a ten for one (10:1) basis. The Company has
recently engaged Ernst & Young's local office in South Africa for guidance on
the valuation of this transaction.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(b) Exhibits:
Exhibit 2 Stock Purchase Agreement, dated September 30, 1999, by
and between Africa Finance Corporation (Pty) Ltd.,
Chancellor Corporation, New Africa Opportunity Fund Sub
Two, LLC, Afinta Motor Corporation (Pty) Ltd., Graham Edward
Nicholls, Robert Charles Drake, and Harold Joshua Manne.
Exhibit 10 Exclusive World Wide Distribution Agreement, dated
September 30, 1999, by and between Chancellor Africa
Corporation (Pty) Ltd., Africa Finance Corporation (Pty)
Ltd. and Afinta Motor Corporation (Pty) Ltd.
Exhibit 99 Press Release dated November 17, 1999
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 thereunto duly authorized.
CHANCELLOR CORPORATION
By: /s/ Franklyn E. Churchill
Franklyn E. Churchill,
President, Chief Operating Officer
and Director
Date: November 15, 1999
EXHIBIT INDEX
Exhibit No. Description
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Exhibit 2 Stock Purchase Agreement, dated September 30, 1999, by and
between Africa Finance Corporation (Pty) Ltd.,
Chancellor Corporation, New Africa Opportunity Fund Sub
Two, LLC, Afinta Motor Corporation (Pty) Ltd., Graham Edward
Nicholls, Robert Charles Drake, and Harold Joshua Manne.
Exhibit 10 Exclusive World Wide Distribution Agreement, dated September
30, 1999, by and between Chancellor Africa Corporation
(Pty) Ltd., Africa Finance Corporation (Pty) Ltd. and
Afinta Motor Corporation (Pty) Ltd.
Exhibit 99 Press Release dated November 17, 1999