SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 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)
May 28, 1997
GIANT INDUSTRIES, INC.
(Exact name of registrant as specified in its charter)
Delaware
(State or jurisdiction of incorporation)
1-10398 86-0642718
(Commission File Number) (IRS Employer Identification No.)
23733 North Scottsdale Road
Scottsdale, Arizona 85255
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code
(602) 585-8888
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS.
Over the period May 28, 1997 to May 31, 1997, Giant Four Corners,
Inc., ("GFC"), an indirect wholly-owned subsidiary of Giant Industries,
Inc., (the "Company"), completed the acquisition of ninety-six retail
service station/convenience stores, seven additional retail locations for
future development, certain petroleum transportation and maintenance
assets, options to acquire service station/convenience stores and other
related assets. The assets were acquired from Thriftway Marketing Corp. and
Clayton Investment Company and from entities related to such sellers as
follows: Aladelt Partnership; Allifer, Inc.; Craig Callaway; Jerry D.
Clayton d/b/a Hilltop Liquors; R. J. Dalley and Dalley Investment Company;
Four Corners Gasamat Limited Partnership; Gasamat of Bosque Farms Limited
Partnership; Gasamat of Farmington Limited Partnership; Kifer Limited
Partnership; LVO, Ltd.; N & D Trading Corp.; New Mexico Gasman Limited
Partnership; Charles L. Parker, Jr. and Kathryn C. Parker; David Potter;
Ratcliffe Properties; San Luis Valley Limited Partnership; Toto Traders,
Inc.; White Mountain Retailers Limited Partnership; and Window Rock
Development Limited Partnership. These privately-held entities
are not affiliated with GFC or the Company.
Thirty-two service station/convenience stores, the seven retail
locations for future development, the transportation and maintenance
assets, the options to acquire service station/convenience stores and
other related assets are being purchased for approximately $19,100,000
in cash, an office building with a net book value of approximately $800,000
and a truck maintenance shop with a net book value of approximately $500,000.
GFC is leasing the remaining sixty-four service station/convenience stores
and related assets for a period of ten years and will purchase them
pursuant to options to purchase during the ten year period for approximately
$22,900,000. The leased service station/convenience stores will be accounted
for as capital leases and will initially require annual lease payments of
approximately $2,600,000. These lease payments will be reduced as the
individual service station/convenience stores are purchased pursuant to the
options. The amount paid for the options, described here and below, will be
applied to the acquisition of the last service station/convenience stores
purchased pursuant to such options. The terms and conditions of the
acquisition were determined as a result of arms'-length negotiations.
The service station/convenience stores acquired are retail outlets
that sell various grades of gasoline, diesel fuel and merchandise to the
general public and are located in New Mexico, Arizona, Colorado and Utah,
in or adjacent to the Company's primary market area. GFC intends to use
substantially all of the assets acquired in a manner consistent with their
previous operation. A small number of the acquired service
station/convenience stores have been targeted for disposal and will be sold
for use other than as retail service station/convenience stores.
GFC also entered into a consignment agreement with Thriftway Marketing
Corp. to supply finished product to sixteen service station/convenience
stores operated by Thriftway which are located on the Navajo, Ute and Zuni
Indian Reservations. Under this agreement, GFC will receive the profits
from the finished product sales and will pay Thriftway annual consignment
fees. GFC has options to purchase these service station/convenience stores.
The Company has also entered into long-term supply arrangements with
Thriftway to provide gasoline and diesel fuel to other service stations in
the area that will continue to be operated by Thriftway.
In addition, GFC has one-year options to purchase forty-five
additional units from Thriftway that are located in Wyoming, Texas and
Montana.
GFC will pay additional monies for finished product, merchandise and
supply inventories associated with the units acquired. The amount to be
paid will approximate the sellers cost of such inventories.
The purchase was funded under the Company's Credit Agreement dated
October 4, 1995, as amended, (the "Agreement") with a number of banks as
follows: Bank of America National Trust and Savings Association, as Agent;
Bank of America Illinois, as issuing Bank and as a Bank; First National
Bank of Chicago (successor to NBD Bank, by assignment), as a Bank; and
Union Bank of California, N.A. (formerly known as Union Bank), as a Bank.
This Agreement was amended effective May 23, 1997 to increase the borrowing
commitment under the unsecured capital expenditure facility portion of the
Agreement to $70,000,000 from $30,000,000 and to extend the due date to May
23, 2000 from October 4, 1998, for both the unsecured capital expenditure
facility and the unsecured working capital facility. The proceeds of the
capital expenditure facility can be used for the following: (a) to purchase
the assets of the above described acquisition and for the purchase of the
common stock of Phoenix Fuel Co., Inc., (b) to repurchase shares of the
Company's common stock, and (c) for acquisitions, capital expenditures and
general corporate purposes, but not for working capital expenditures. On
May 23, 1999 the borrowing commitment under the capital expenditure facility
is required to be reduced by $20,000,000. Funds under the working capital
facility portion of the Agreement are available to provide working capital
and letters of credit in the ordinary course of business. Certain covenants
and restrictions contained in the original Credit Agreement were also
modified. The interest rate on these unsecured facilities is tied to various
short-term indices and the associated interest rate margin has been revised
downward. The interest rate at May 31, 1997 was approximately 6.5%.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(a) Financial Statements of Business Acquired.
No financial statements will be filed under this Item 7(a)
pursuant to Rule 3-05 of Regulation S-X because none of the materiality
tests exceeded the 20% level.
(b) Pro Forma Financial Information.
No pro forma financial statements will be filed under this Item
7(b) pursuant to Rule 11-01(c) of Regulation S-X.
(c) Exhibits.
The Exhibits listed on the accompanying Index to Exhibits
immediately following the signature page are filed as a part of, or
incorporated by reference into, this report.
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.
GIANT INDUSTRIES, INC.
/s/ A. WAYNE DAVENPORT
-------------------------------------------
A. Wayne Davenport
Vice President and Chief Financial Officer
(Principal Financial and Accounting Officer)
Date: June 11, 1997
GIANT INDUSTRIES, INC.
CURRENT REPORT ON FORM 8-K
MAY 28, 1997
INDEX TO EXHIBITS
EXHIBIT NO. DESCRIPTION
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2.1*/** Definitive Agreement, dated April 18, 1997, by and
between Giant Four Corners, Inc., as "Buyer", and
Thriftway Marketing Corp. and Clayton Investment
Company, collectively , as "Seller".
4.1 Credit Agreement, dated October 4, 1995, among Giant
Industries, Inc., as Borrower, Giant Industries
Arizona, Inc., Ciniza Production Company, San Juan
Refining Company, Giant Exploration & Production
Company, and Giant Four Corners, Inc., as
Guarantors, and Bank of America National Trust and
Savings Association, as Agent, Bank of America
Illinois, as a Bank and Letter of Credit Issuing
Bank and the Other Financial Institutions Parties
hereto. Incorporated by reference to Exhibit 4.1 to
the Company's Report on Form 8-K for the period
October 4, 1995, File No. 1-10398.
4.2* First Amendment, dated May 15, 1996, to Credit
Agreement, dated October 4, 1995, among Giant
Industries, Inc., as Borrower, Giant Industries
Arizona, Inc., Giant Exploration & Production
Company, Giant Four Corners, Inc., San Juan Refining
Company and Ciniza Production Company, as
Guarantors, and Bank of America National Trust and
Savings Association, as Agent, Bank of America
Illinois, as issuing Bank and as a Bank, NBD Bank as
a Bank, and Union Bank, as a Bank.
4.3* Second Amendment, dated May 23, 1997, to Credit
Agreement, dated October 4, 1995, among Giant
Industries, Inc., as Borrower, Giant Industries
Arizona, Inc., Giant Exploration & Production
Company, San Juan Refining Company, Giant Four
Corners, Inc. and Ciniza Production Company, as
Guarantors, and Bank of America National Trust and
Savings Association, as Agent, Bank of America
Illinois, as issuing Bank and as a Bank, First
National Bank of Chicago (successor to NBD Bank, by
assignment), as a Bank, and Union Bank of
California, N.A. (formerly known as Union Bank), as
a Bank.
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* - Filed herewith.
** - Certain exhibits and schedules listed in the Definitive
Agreement are not filed herewith. Copies of the omitted
schedules will be furnished supplementally to the
Commission upon request.