UNITED STATES
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
May 30, 1997 (May 16, 1997)
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Date of Report (Date of earliest event reported)
PANAMSAT CORPORATION
PANAMSAT INTERNATIONAL SYSTEMS, INC.
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(Exact name of registrant as specified in its charter)
Delaware 0-22531 95-4607698
Delaware 0-26712 06-1407851
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(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
One Pickwick Plaza, Greenwich, Connecticut 06830
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (203) 622-6664
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INFORMATION TO BE INCLUDED IN THE REPORT
Item 1. Changes in Control of the Registrant.
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On May 16, 1997, Hughes Communications, Inc. ("HCI") and PanAmSat
International Systems, Inc. (formerly known as PanAmSat Corporation, "Old
PanAmSat") combined their satellite operations pursuant to an Agreement and Plan
of Reorganization, dated as of September 20, 1996, as amended as of April 4,
1997 (the "Reorganization Agreement"), between HCI and certain of its
subsidiaries and Old PanAmSat (the "Merger"). The Merger was consummated through
the merger of a wholly owned subsidiary of a newly formed holding company (such
holding company, "New PanAmSat"), with and into Old PanAmSat and a contribution
of the satellite services business of HCI to New PanAmSat, with the result that
Old PanAmSat became a wholly owned subsidiary of New PanAmSat and New PanAmSat
became the owner and operator of the HCI satellite services business. Following
the Merger, Old PanAmSat was renamed PanAmSat International Systems, Inc. and
New PanAmSat was renamed PanAmSat Corporation. Upon consummation of the Merger,
each direct or indirect holder of each outstanding share of stock, par value
$0.01 per share, of Old PanAmSat received, at such holder's election (the
"Elections"), (i) one share of common stock, par value $0.01 per share of New
PanAmSat ("New PanAmSat Common Stock"), (ii) $15 in cash plus one-half share of
New PanAmSat Common Stock or (iii) $30 in cash, subject to proration. As a
result of the Elections and in accordance with the Reorganization Agreement and
the Stock Contribution and Exchange Agreement dated as of September 20, 1996
(the "Univisa Contribution Agreement") among Grupo Televisa, S.A. a Mexican
corporation ("Televisa"), Satellite Company, LLC, a Nevada limited liability
company ("S Company"), New PanAmSat and HCI, Elections to receive $30 in cash
were prorated, resulting in each such Election receiving approximately $16.38 in
cash and 0.45 shares of New PanAmSat Common Stock in exchange for each share of
common stock of Old PanAmSat.
In exchange for the contribution of the existing satellite services
business of HCI and certain of its subsidiaries, HCI received 106,622,807 shares
of New PanAmSat Common Stock, an amount equal to 71.5% of New PanAmSat's issued
and outstanding Common Stock. Prior to the Merger, Old PanAmSat had been
controlled by the former holders of Old PanAmSat's Class A Common Stock, subject
to certain veto rights of the former holder of Old PanAmSat's Class B Common
Stock. For a discussion of arrangements and understandings among members of the
former controlling stockholders of Old PanAmSat and the new controlling
stockholder of New PanAmSat with respect to the election of directors and other
matters, reference is made to the Amended and Restated Stockholder Agreement,
dated as of May 16, 1997, by and among Magellan International, Inc., HCI, S
Company and the former holders of Class A Common Stock of Old PanAmSat, which is
filed herewith and is incorporated herein by reference.
Pursuant to an Assurance Agreement dated September 20, 1996, among
Hughes Electronics, a Delaware Corporation ("HE"), Old PanAmSat, New PanAmSat
and S Company, HE agreed to lend up to $1.725 billion to New PanAmSat on the
closing date of the Merger. HE borrowed from General Motors the funds necessary
to provide the new financing and such funds were loaned to New PanAmSat by an
affiliate of HE, Hughes Network Systems Inc., pursuant to a loan agreement (the
"Loan Agreement"). The Loan Agreement provides for a three year term loan
bearing interest at a rate of 2% above the London Interbank Offering Rate (which
interest rate is subject to renegotiation if New PanAmSat attains an investment
grade credit rating or Old PanAmSat ceases to be subject to restrictions (a) on
making restricted payments and (b) on pledging its assets contained in the
indentures governing Old PanAmSat's existing indebtedness and the certificate of
designation for Old PanAmSat's Preferred Stock). New PanAmSat is required to pay
seven quarterly installments of $50 million each commencing August 1, 1998, with
the balance of the loans payable on May 1, 2000. Under the Loan Agreement, New
PanAmSat is required to make certain prepayments of principal upon the
occurrence of certain events, including (i) the issuance of equity, (ii) the
issuance or incurrence of debt evidenced as a new borrowing in excess of
$5,000,000, (iii) the sale of assets with a fair market value in excess of
$10,000,000 of New PanAmSat or its material subsidiaries, if the proceeds
therefrom are not reinvested in New PanAmSat or its material subsidiaries within
180 days and (iv) the receipt of insurance proceeds in excess of $5,000,000, if
such proceeds are not reinvested in New PanAmSat or its material subsidiaries.
The Loan Agreement contains covenants that prohibit or limit, among other
things, pledges of
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New PanAmSat's assets and the incurrence of certain indebtedness and requires
that New PanAmSat and its subsidiaries maintain a certain consolidated net
worth. New PanAmSat's obligations under the Loan Agreement are guaranteed by
Hughes Communications Services, Inc., Hughes Communications Japan, Inc., and
Hughes Communications Carrier Services, Inc., subsidiaries of New PanAmSat. All
obligations of New PanAmSat and its subsidiaries under the Loan Agreement are
subject to restrictions imposed on them under the indentures governing Old
PanAmSat's existing indebtedness and the certificate of designation for Old
PanAmSat's preferred stock; additionally, neither New PanAmSat nor any of its
subsidiaries are prohibited under the Loan Agreement from taking any action
thereunder which it is permitted to take under such indentures or certificate of
designation.
Immediately prior to the Merger, in a separate but related transaction
(the "Univisa Contribution") and pursuant to the Univisa Contribution Agreement,
New PanAmSat acquired from S Company all of the capital stock of PanAmSat
International Holdings, Inc. (formerly known as Univisa, Inc.), a Delaware
corporation, which is the indirect holder of all of the outstanding Old PanAmSat
Class B Common Stock. As consideration for the Univisa Contribution, S Company
received for its shares of Old PanAmSat Class B Common Stock, $611,501,153 in
cash and 6,239,594 shares of New PanAmSat Common Stock, following the Share
Repurchase and the DTH Sale (as defined below). Concurrently with the Merger and
immediately following the Univisa Contribution, 7.5 million shares of New
PanAmSat Common Stock received by S Company in connection with the Univisa
Contribution were repurchased by New PanAmSat for $225 million (the "Share
Repurchase"). Following the Share Repurchase, DTH, LLC, a Delaware limited
liability company and designee of Televisa, purchased for $225 million all of
Old PanAmSat's rights to purchase from Televisa equity interests in certain
joint ventures to be formed to offer direct-to-home services in Latin America
and the Iberian Peninsula, pursuant to the DTH Option Purchase Agreement dated
as of September 20, 1996 between Old PanAmSat, Televisa and S Company (the "DTH
Sale").
The total amount of funds paid by New PanAmSat as consideration in the
Merger and the Univisa Contribution Agreement was approximately $1.725 billion,
including (i) approximately $1.5 billion paid to the former holders of Old
PanAmSat's Class A Common Stock, Old PanAmSat's Ordinary Common Stock and
options to acquire Old PanAmSat's Ordinary Common Stock and the former
beneficial holder of Old PanAmSat's Class B Common Stock, and (ii) $225 million,
to fund the Share Repurchase.
Item 2. Acquisition or Disposition of Assets.
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As disclosed above, New PanAmSat acquired Old PanAmSat as a result of
the Merger. See Item 1.
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Item 7. Financial Statements and Exhibits.
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(a) Financial Statements of Business Acquired.
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The Financial statements of PanAmSat International Systems,
Inc. required by this Item 7(a) are incorporated herein by
reference to (i) the audited financial statements of PanAmSat
International Systems, Inc. ("PISI") as of December 31, 1994,
1995 and 1996 contained in pages FIN-1 through FIN-19 of
PISI's Proxy Statement filed with the Securities and Exchange
Commission on April 18, 1997, under the name PanAmSat
Corporation; and (ii) the unaudited financial statements of
PISI contained in the Quarterly Report filed by PISI
electronically on Form 10-Q/A for the quarter ended March 31,
1997, with the Securities and Exchange Commission under the
name PanAmSat Corporation on May 9, 1997.
(b) Pro Forma Financial Information.
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It is impracticable for PanAmSat Corporation to provide the
required pro forma financial information at this time.
PanAmSat Corporation will file the required pro forma
financial information as an amendment to this Form 8-K as soon
as practicable, and no later than 60 days after the due date
of this Form 8-K.
(c) Exhibits.
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2.1 Agreement and Plan of Reorganization dated as of
September 20, 1996, by and among Hughes
Communications, Inc., Hughes Communications Galaxy,
Inc., Hughes Communications Satellite Services, Inc.,
Hughes Communications Services, Inc., Hughes
Communications Carrier Services, Inc., Hughes
Communications Japan, Inc., Magellan International,
Inc., and PanAmSat Corporation.*
2.2 Amendment to Agreement and Plan of Reorganization
dated as of April 4, 1997, by and among Hughes
Communications, Inc., Hughes Communications Galaxy,
Inc., Hughes Communications Satellite Services, Inc.,
Hughes Communications Services, Inc., Hughes
Communications Carrier Services, Inc., Hughes
Communications Japan, Inc., Magellan International,
Inc. and PanAmSat Corporation.*
2.3 Stock Contribution and Exchange Agreement, dated
September 20, 1996, among Grupo Televisa, S.A.,
Satellite Company, LLC, the Magellan International,
Inc. and Hughes Communications Inc.*
2.4 Assurance Agreement, dated September 20, 1996,
between Hughes Electronics Corporation, PanAmSat
Corporation, Satellite Company, LLC and Magellan
International, Inc.*
4.1 Amended and Restated Stockholder Agreement, dated as
of May 16, 1997, by and among Magellan International,
Inc., Hughes Communications, Inc., Satellite Company,
LLC and the former holders of Class A Common Stock of
PanAmSat International Systems, Inc.**
4.2 Amended and Restated Registration Rights Agreement,
dated as of May 16, 1997, by and among Magellan
International, Inc., Hughes Communications, Inc.,
Hughes Communications Galaxy, Inc., Hughes
Communications Satellite Services, Inc., Satellite
Company, LLC and the former holders of Class A Common
Stock of PanAmSat International Systems, Inc.**
4.3 Loan Agreement, dated May 15 1997, between Hughes
Network Systems, Inc. and Magellan International,
Inc.**
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10 DTH Option Purchase Agreement, dated September 20,
1996, between PanAmSat Corporation, Grupo Televisa,
S.A. and Satellite Company, LLC.***
20 Press Release of PanAmSat Corporation dated May 16,
1997.**
23 Consent of Arthur Andersen LLP.**
99(a) Audited Financial Statements of PanAmSat
International Systems, Inc. set forth in Magellan
International, Inc.'s Form S-4 Registration Statement
for the years ended December 31, 1994, 1995 and
1996.*
99(b) Unaudited Financial Statement of PanAmSat
International Systems, Inc. set forth in PanAmSat
Corporation's Quarterly Report on Form 10-Q/A for the
quarter ended March 31, 1997.****
*Filed with the Securities and Exchange Commission as an exhibit to
Magellan International, Inc.'s Form S-4 Registration Statement (No.
333-25293) on April 16, 1997 and incorporated herein by reference.
**Filed herewith.
***Filed with the Securities and Exchange Commission as an exhibit to
PanAmSat Corporation's Form 10-Q for the quarter ended September
30, 1996 and incorporated herein by reference.
****Filed with the Securities and Exchange Commission as the financial
statement for PanAmSat Corporation's Form 10-Q/A for the quarter
ended March 31, 1997, and incorporated herein by reference.
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SIGNATURES
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Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, each of PanAmSat International Systems, Inc. and PanAmSat Corporation
have duly caused this report to be signed on its behalf by the undersigned
hereunto duly authorized.
PANAMSAT INTERNATIONAL SYSTEMS, INC.
By: /s/ James W. Cuminale
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Name: James W. Cuminale
Title: Senior Vice President and
General Counsel
PANAMSAT CORPORATION
By: /s/ James W. Cuminale
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Name: James W. Cuminale
Title: Senior Vice President and
General Counsel
Date: May 30, 1997
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EXHIBIT INDEX
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Exhibit
No.
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2.1 Agreement and Plan of Reorganization dated as of September 20,
1996, by and among Hughes Communications, Inc., Hughes
Communications Galaxy, Inc., Hughes Communications Satellite
Services, Inc., Hughes Communications Services, Inc., Hughes
Communications Carrier Services, Inc., Hughes Communications
Japan, Inc., Magellan International, Inc. and PanAmSat
Corporation.*
2.2 Amendment to Agreement and Plan of Reorganization dated as of
April 4, 1997, by and among Hughes Communications, Inc.,
Hughes Communications Galaxy, Inc., Hughes Communications
Satellite Services, Inc., Hughes Communications Services,
Inc., Hughes Communications Carrier Services, Inc., Hughes
Communications Japan, Inc., Magellan International, Inc. and
PanAmSat Corporation.*
2.3 Stock Contribution and Exchange Agreement, dated September 20,
1996, among Grupo Televisa, S.A., Satellite Company, LLC, the
Magellan International, Inc. and Hughes Communications, Inc.*
2.4 Assurance Agreement, dated September 20, 1996, between Hughes
Electronics Corporation, PanAmSat Corporation, Satellite
Company, LLC and Magellan International, Inc.*
4.1 Amended and Restated Stockholder Agreement, dated as of May
16, 1997, by and among Magellan International, Inc., Hughes
Communications, Inc., Satellite Company, LLC and the former
holders of Class A Common Stock of PanAmSat International
Systems, Inc.**
4.2 Amended and Restated Registration Rights Agreement, dated as
of May 16, 1997, by and among Magellan International, Inc.,
Hughes Communications, Inc., Hughes Communications Galaxy,
Inc., Hughes Communications Satellite Services, Inc.,
Satellite Company, LLC and the former holders of Class A
Common Stock of PanAmSat International Systems, Inc.**
4.3 Loan Agreement, dated May 15 1997, between Hughes Network
Systems, Inc. and Magellan International, Inc.**
10 DTH Option Purchase Agreement, dated September 20, 1996,
between PanAmSat Corporation, Grupo Televisa, S.A. and
Satellite Company, LLC.***
20 Press Release of PanAmSat Corporation dated May 16, 1997.**
23 Consent of Arthur Andersen LLP.**
99(a) Audited Financial Statements of PanAmSat International
Systems, Inc. set forth in Magellan International Inc.'s Form
S-4 Registration Statement for the years ended December 31,
1994, 1995 and 1996.*
99(b) Unaudited Financial Statement of PanAmSat International
Systems, Inc. set forth in PanAmSat Corporation's Quarterly
Report on Form 10-Q/A for the Quarter ended March 31, 1997.***
*Filed with the Securities and Exchange Commission as an exhibit to Magellan
International, Inc.'s Form S-4 Registration Statement (No. 333-25293) on
April 16, 1997 and incorporated herein by reference.
**Filed herewith.
***Filed with the Securities and Exchange Commission as an exhibit to PanAmSat
Corporation's Form 10-Q for the quarter ended September 30, 1996 and
incorporated herein by reference.
****Filed with the Securities and Exchange Commission as the financial
statement for PanAmSat Corporation's Form 10-Q/A for the quarter ended
March 31, 1997, and incorporated herein by reference.
Page 7 of 9
FOR IMMEDIATE RELEASE
FROM PANAMSAT
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PANAMSAT COMPLETES MERGER
WITH HUGHES COMMUNICATIONS' GALAXY
New Company is World's Preeminent Commercial Provider of Global Satellite-Based
Telecommunications Services
GREENWICH, CONN., May 16, 1997 - PanAmSat Corporation and Hughes Communications,
Inc. (HCI) announced today that the merger between PanAmSat and the Galaxy(R)
Satellite Services business of HCI has been completed. The newly created
company, called PanAmSat Corporation, began its first day of operation after
final execution of the merger earlier today.
On May 19 the new company will list its common stock on the Nasdaq national
market, initially under the ticker SPOTD. The ticker will revert to SPOT after
30 days.
"Today marks a new beginning for PanAmSat as the world's premier commercial
satellite communications company, offering tremendous growth potential for its
customers, shareholders and employees," said Frederick A. Landman, PanAmSat's
president and chief executive officer. "In every aspect of our business, we will
continue to provide our customers with the very best and most advanced satellite
broadcasting, telecommunications and Internet services available anywhere in the
world."
Charles H. Noski, chairman of the board of directors of PanAmSat and vice
chairman and chief financial officer of Hughes Electronics Corporation, said:
"This merger represents the joining of two complementary businesses into a new
powerhouse for global satellite services. As the new majority shareholder,
Hughes Electronics believes PanAmSat will be an integral part of Hughes'
forward-looking strategy in telecommunications."
PanAmSat shareholders formally approved the merger on May 8. In addition, the
stock election process achieved the following results:
- - For the standard election, PanAmSat shareholders received $15 and one-half
share of new company stock for each share of former PanAmSat stock;
- - For the stock election, PanAmSat shareholders received one share of new
company stock for each share of former PanAmSat stock;
- - For the cash election, PanAmSat shareholders received approximately $16.38
and 0.45 shares of new company stock for each share of former PanAmSat
stock.
Fractional shares of new company stock resulting from the proration will be paid
in cash.
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PanAmSat Corporation is the world's leading commercial provider of
satellite-based communications services. The Company operates a global network
of 14 state-of-the-art satellites supported by more than 400 professionals on
five continents. These resources enable PanAmSat to provide broadcast,
telecommunications and Internet access services to hundreds of customers
worldwide.
PanAmSat services include:
- - The premier cable and broadcast television satellites in the United States,
Latin America, the Indian subcontinent and Asia-Pacific;
- - Satellite platforms for direct-to-home television services in Latin America,
South Africa, the Middle East and India;
- - Live, on-the-scene transmission services for news, sports and special events
coverage worldwide;
- - Global satellite-based telecommunications and Internet access services.
PanAmSat plans to launch seven additional satellites by late 1998, including the
upcoming launch of the PAS-5 Atlantic Ocean Region satellite in July 1997. For
more information on the company and its services, visit the PanAmSat web site at
http://www.panamsat.com.
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