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
Date of Report (Date of earliest event reported)
March 22, 2000 (March 14, 2000)
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ML MACADAMIA ORCHARDS, L.P.
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(Exact name of registrant as specified in its charter)
DELAWARE 1-9145 99-0248088
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(State or other jurisdiction of (Commission (I.R.S. Employer
incorporation or organization) File Number) Identification No.)
828 FORT STREET, HONOLULU, HAWAII 96813
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(Address of Principal Executive Offices) (Zip Code)
808-532-4130
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Registrant's telephone number, including area code
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ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS.
On March 14, 2000, ML Macadamia Orchards, L.P. (the "Partnership") announced
that the Partnership agreed to purchase 142 acres of mature macadamia trees
and substantially all of the assets used in the macadamia farming business
from Ka'u Agribusiness Company, Inc., a Hawaii corporation, Ka'u Sugar,
Inc., a Hawaii corporation, Macadamia Orchards, Inc., a Hawaii corporation,
and Mauna Kea Agribusiness Company, Inc., a Hawaii corporation (collectively
referred to herein as "Seller").
The acquired assets consist primarily of farming equipment, vehicles, a
husking plant, a well, leasehold improvements, office furniture and
equipment and inventories related to macadamia farming. In addition, the
Seller will assign to the Partnership its interest in approximately 16 farm
service contracts to farm macadamia orchards owned by other growers. The
Partnership will also be purchasing from Seller approximately 142 tree acres
of mature macadamia orchards, which consist of an ownership interest in the
trees and a leasehold interest in the underlying land. The orchards are all
located in the Ka'u region on the island of Hawaii.
The purchase price for all the assets to be acquired is $9 million in cash.
The Partnership will use $5 million of its working capital for the purchase
and plans to borrow the balance of $4 million from a local lending
institution.
The entities comprising the Seller are subsidiaries or affiliates of C.
Brewer and Company, Ltd. ("CBCL"), a Hawaii company. The Partnership's
general partner, ML Resources, Inc. ("MLR" or "Managing Partner"), a Hawaii
company, is also a subsidiary of CBCL.
The Managing Partner makes all decisions relating to the management of the
Partnership, and as such, has the duty to act in good faith and to manage
the Partnership in a manner that is fair and reasonable to all unitholders.
Certain officers and directors of CBCL and/or its affiliates also act as
officers and directors of the Managing Partner and certain directors of the
Managing Partner are substantial shareholders of Buyco, Inc., the parent
company of CBCL.
A committee of the Managing Partner's Board of Directors composed of two
persons who are independent of CBCL and its affiliates (the "Conflicts
Committee") reviews, on an annual basis, or more frequently as such
committee may deem appropriate, the Managing Partner's management of the
Partnership and any conflicts of interest that may have arisen or may arise
as a result of the relationships among CBCL and its affiliates, the Managing
Partner and the Partnership.
The agreement to purchase the assets of Seller was negotiated by the
Conflicts Committee, independent of the Managing Partner's Board. Those
directors of the Managing Partner with conflicts of interest, also recused
themselves from involvement in negotiations for Seller.
Prior to the acquisition, Seller was in the business of farming macadamia
orchards mostly for other orchard owners and partly for themselves. Seller
farmed approximately 7,195
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acres of macadamia orchards, including 4,027 acres owned by the Partnership.
The Partnership will use all the assets involved in the purchase for the
same purpose.
In connection with the acquisition, the Partnership and Seller will enter
into various contracts to provide specific services to the other. The
Partnership will provide macadamia farming services to Seller for
approximately 700 acres at cost plus 15%. The Partnership will also provide
accounting services to certain subsidiaries and affiliates of Seller for
cost plus 15%. Seller will provide certain management services for
Partnership, such as executive management, legal, land management, human
relations and insurance services for approximately $100,000 per year.
ITEM 7. EXHIBITS
(c) Exhibits.
2.1 Asset Purchase Agreement dated March 14, 2000
99.1 Press Release dated March 14, 2000
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.
ML MACADAMIA ORCHARDS, L.P.
(Registrant)
By ML RESOURCES, INC.
Managing General Partner
DATED: March 22, 2000 By /s/ Gregory A. Sprecher
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GREGORY A. SPRECHER
Senior Vice President and
Chief Financial Officer
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EXHIBIT INDEX
Exhibit Page
Number Description Number
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2.1 Asset Purchase Agreement dated March 14, 2000 5-45
99.1 Press Release dated March 14, 2000 46-48
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