UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-K
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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
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Commission File No. 33-31810
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POLARIS AIRCRAFT INCOME FUND VI,
A California Limited Partnership
State of Organization: California
IRS Employer Identification No. 94-3102632
201 Mission Street, 27th Floor, San Francisco, California 94105
Telephone - (415) 284-7400
This document consists of 6 pages.
Item 2.
On May 28, 1997, Polaris Investment Management Corporation (the "General
Partner" or "PIMC"), on behalf of Polaris Aircraft Income Fund VI (the
"Partnership"), executed definitive documentation for the purchase of all of the
Partnership's 2 remaining aircraft (the "Aircraft") by Triton Aviation Services
VI LLC, a special purpose company (the "Purchaser"). The final closings for the
purchase of 1 of the 2 Aircraft had occurred as of June 6, 1997. The Purchaser
is managed by Triton Aviation Services, Ltd. ("Triton Aviation"), a privately
held aircraft leasing company which was formed in 1996 by Triton Investments,
Ltd., a company which has been in the marine cargo container leasing business
for 17 years and is diversifying its portfolio by leasing commercial aircraft.
Each Aircraft was sold subject to the existing leases.
The General Partner's Decision To Approve The Transaction
In determining whether the transaction was in the best interests of the
Partnership and its unitholders, the General Partner evaluated, among other
things, the risks and significant expenses associated with continuing to own and
remarket the Aircraft (one of which was subject to a lease that was nearing
expiration). The General Partner determined that such a strategy could require
the Partnership to expend a significant portion of its cash reserves for
remarketing and that there was a substantial risk that this strategy could
result in the Partnership having to reduce or even suspend future cash
distributions to limited partners. The General Partner concluded that the
opportunity to sell both the Aircraft at an attractive price would be beneficial
in the present market where demand for Stage II aircraft is relatively strong
rather than attempting to sell the aircraft over the coming years when the
demand for such Aircraft might be weaker. During the months of intense
negotiations, GE Capital Aviation Services, Inc. ("GECAS"), which provides
aircraft marketing and management services to the General Partner, sought to
obtain the best price and terms available for these Stage II aircraft given the
aircraft market and the conditions and types of planes owned by the Partnership.
Both the General Partner and GECAS approved the sale terms of the Aircraft (as
described below) as being in the best interest of the Partnership and its
unitholders because both believe that this transaction will optimize the
potential cash distributions to be paid to limited partners. To ensure that no
better offer could be obtained, the terms of the transaction negotiated by GECAS
included a "market-out" provision that permitted the Partnership to elect to
accept an offer for all (but no less than all) of the assets to be sold by it to
the Purchaser on terms which it deemed more favorable, with the ability of the
Purchaser to match the offer or decline to match the offer and be entitled to be
compensated in an amount equal to 1 1/2% of the Purchaser's proposed purchase
price.
On April 7, 1997, the General Partner received and on May 14, 1997 elected to
accept a competing offer (the "Competing Offer") from a third party to purchase
the Partnership's two aircraft for $7,115,600 in cash, subject to a number of
contingencies. On May 21, 1997, the Purchaser was notified of the Competing
Offer, and the Purchaser subsequently matched the Competing Offer.
As a result of the sale of the Aircraft, the General Partner will be winding up
the Partnership's operations and the Partnership may be in a position to
dissolve before December 31, 1997.
The Terms of the Transaction
The total purchase price (the "Purchase Price") to the Purchaser is $7,115,600
all of which is allocable to the Aircraft. The Purchaser is not receiving any of
the Partnership's cash reserves, estimated to be approximately $900,000 after
the anticipated July cash distribution is made to limited partners. The
Purchaser paid into an escrow account the Purchase Price of $7,115,600 in cash
at the closing. As described below, this transaction will enable the Partnership
to distribute to limited partners the cash payment received on the sale of the
Aircraft and permit the Partnership to distribute to limited partners a
substantial portion of cash reserves which have been held by the Partnership.
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The Partnership intends to make this distribution as part of its July 1997
quarterly distribution to limited partners.
Polaris Aircraft Income Fund II, Polaris Aircraft Income Fund III, Polaris
Aircraft Income Fund IV and Polaris Aircraft Income Fund V have also sold
certain aircraft assets to separate special purpose companies under common
management with the Purchaser.
The Purchaser purchased the Aircraft effective as of April 1, 1997
notwithstanding the actual closing dates. The utilization of an effective date
facilitated the determination of rent and other allocations between the parties.
The Purchaser has the right to receive all income and proceeds, including rents
and receivables, from the Aircraft accruing from and after April 1, 1997 and
will pay interest at the rate of 5.3% from April 1, 1997 on the purchase price
amount to the date of payment.
Neither PIMC nor GECAS will receive a sales commission in connection with the
transaction. Neither PIMC nor GECAS or any of its affiliates holds any interest
in Triton Aviation or any of Triton Aviation's affiliates. John Flynn, the
current President of Triton Aviation, was a Polaris executive until May 1996 and
has over 15 years experience in the commercial aviation industry. At the time
Mr. Flynn was employed at PIMC, he had no affiliation with Triton Aviation or
its affiliates.
With respect to the 1 Aircraft that has not yet been transferred to the
Purchaser as of June 6, 1997, the Partnership has agreed to obtain the
Purchaser's consent before undertaking any significant action, such as making a
material modification or waiving a default under a lease.
Anticipated July Cash Distribution
The Partnership anticipates making a cash distribution to the limited partners
of approximately $8,764,023 ($126.25 per limited partnership unit) by July 30,
1997. Such distribution would be comprised of (i) the cash payment received from
the sale of the Aircraft, less estimated transaction expenses (representing
approximately $95.00 per limited partnership unit); and (ii) the portion of the
Partnership's cash reserves which the General Partner determined was available
for distribution (representing approximately $31.25 per limited partnership
unit). The foregoing anticipated distribution is based on the assumptions that
the closings for all the Aircraft being sold to the Purchaser occur prior to
July 1, 1997, the Partnership timely receives all payments due from the
Purchaser and the Partnership incurs estimated operating and administrative
expenses (including expenses in connection with the transaction) of
approximately $53,000 for the quarter ended June 30, 1997. The Partnership's
estimated cash distributions to limited partners constitutes forward looking
information based upon the above assumptions that may, for any number of
reasons, not occur. Accordingly, there can be no assurance that the Partnership
will make a cash distribution in the amount anticipated.
Estimated Cash Reserves
The Partnership estimates its cash reserves will be approximately $900,000
($12.32 per limited partnership unit) after the cash distribution to limited
partners anticipated to be made in July 1997. PIMC has determined that the
Partnership maintain these cash reserves as a prudent measure to insure that the
Partnership has available funds for other contingencies including expenses of
the Partnership in connection with winding up its affairs.
Upon determination and payment of remaining operating and administrative
expenses of the Partnership after June 30, 1997 and expenses associated with the
winding up of the Partnership, which cannot be estimated at this time, a final
distribution of the remaining cash reserves, if any, will be distributed to the
partners. The General Partner anticipates that such payment of expenses and cash
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distributions to partners will be completed by December 31, 1997, although there
can be no assurance that the Partnership will be able to wind up its operations
by December 31, 1997.
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Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.
a) Financial Statements. None
b) Pro Forma Information. None
c) Exhibits.
2.1 Purchase, Assignment and Assumption Agreement
2.2 Escrow Agreement
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SIGNATURE
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.
POLARIS AIRCRAFT INCOME FUND VI
(Registrant)
By: Polaris Investment
Management Corporation,
General Partner
June 6, 1997 By: /S/Marc A. Meiches
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Marc A. Meiches
Chief Financial Officer
(principal financial officer and
principal accounting officer of
Polaris Investment Management
Corporation, General Partner of
the Registrant)
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