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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) October 21, 2003
PHIBRO ANIMAL HEALTH CORPORATION
(Exact name of registrant as specified in its charter)
New York 333-64641 13-1840497
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(State or other jurisdiction (Commission File (IRS Employer
of incorporation) Number) Identification Number)
One Parker Plaza
Fort Lee, New Jersey 07024
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(Address of principal executive offices) (Zip Code)
(201) 944-6020
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(Registrant's telephone number, including area code)
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ITEM 5. OTHER EVENTS AND REGULATION FD DISCLOSURE.
Phibro Animal Health Corporation (the "Company"), formerly Philipp
Brothers Chemicals, Inc., announced today (i) the successful completion of a
private offering of $105 million of units consisting of $85 million 13% senior
secured notes due 2007 of the Company and $20 million 13% senior secured notes
due 2007 of Philipp Brothers Netherlands III B.V., an indirect wholly-owned
subsidiary of the Company (the "Dutch issuer"); (ii) the repurchase of
approximately $52 million aggregate principal amount of the Company's
outstanding 9 7/8% senior subordinated notes due 2008 (the "Existing Notes")
with proceeds of the units; (iii) the satisfaction of its domestic senior
working capital credit facility with PNC Bank, as agent; (iv) the satisfaction
of its indebtedness to Pfizer Inc.; and (v) the replacement by the Company
of its existing domestic senior working capital credit facility with a new
domestic senior working capital credit facility with Wells Fargo Foothill, Inc.
PRIVATE OFFERING AND USE OF PROCEEDS
On October 21, 2003, the Company successfully completed a private
offering of $105 million aggregate principal amount of units consisting of $85
million 13% senior secured notes due 2007 of the Company and $20 million 13%
senior secured notes due 2007 of the Dutch issuer. Such units and underlying
senior secured notes were issued in a private placement pursuant to Rule 144A
and Regulation S under the Securities Act of 1933, as amended (the "Securities
Act"), with Jefferies & Company, Inc. acting as initial purchaser.
The net proceeds after deducting fees and expenses related to the
offering were approximately $94.6 million. Proceeds from the sale of the units
and underlying senior secured notes were used to:
. fund the purchase by the Company of approximately $52 million
aggregate principal amount of Existing Notes, at a price equal to
60% of the principal amount thereof, plus accrued and unpaid
interest, pursuant to privately negotiated transactions;
. repay the Company's existing domestic working capital credit facility
with PNC Bank, as agent;
. make a payment to Pfizer Inc. of approximately $28.5 million, plus
accrued interest on its existing promissory note due 2004 to
satisfy (i) approximately $20.1 million aggregate principal amount
of such promissory note; (ii) approximately $12.8 million of
accounts payable (as of June 30, 2003); (iii) approximately $9.2
million of accrued expenses (as of June 30, 2003); and (iv) the
Company's future contingent obligations under the Pfizer agreements;
and
. pay related fees and expenses.
REPLACEMENT CREDIT FACILITY
On October 21, 2003, the Company also entered into a new replacement
domestic senior working capital credit facility with Wells Fargo Foothill,
Inc., providing for a working capital line plus a letter of credit facility.
Prior to the satisfaction of certain due diligence requirements of Wells Fargo
Foothill, Inc., the aggregate amount of borrowings under such working capital
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and letter of credit facilities may not exceed $15 million. Upon satisfaction
of such requirements, the aggregate amount of borrowings under the working
capital facility may not exceed $15 million plus a letter of credit facility.
Borrowings under the replacement domestic senior credit facility are
subject to a borrowing base formula based on percentages of eligible domestic
receivables and domestic inventory. Under the replacement credit facility, the
Company may choose between two interest rate options: (i) the bank's or
agent's published base rate as defined plus 0.50% and (ii) the LIBOR rate as
defined plus 2.75%. Indebtedness under the replacement credit facility is
secured by a first priority lien on substantially all of the Company's assets
and assets of substantially all of the Company's domestic subsidiaries. The
Company is required to pay an unused line fee of 0.375% on the unused portion
of the replacement credit facility, a monthly servicing fee and standard letter
of credit fees to issuing banks. Borrowings under the replacement credit
facility are available until, and are repayable no later than, October 31,
2007.
The indebtedness outstanding under the replacement domestic senior
credit facility will be guaranteed by substantially all of the Company's
domestic subsidiaries.
A copy of the press release announcing the successful completion of the
private offering is attached to this Report as Exhibit 99.1. A copy of the
indenture pursuant to which the $105 million of units and related senior
secured notes were issued is attached to this Report as Exhibit 99.2.
Nothing in this Report shall constitute an offer to purchase or sell,
or a solicitation of an offer to purchase or sell, any securities of the
Company or any of its subsidiaries.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(c) Exhibits
99.1 Press Release, dated October 31, 2003
99.2 Indenture, dated as of October 21, 2003, by and among
Phibro Animal Health Corporation and Philipp Brothers Netherlands III B.V., as
Issuers, the Guarantors named therein, and HSBC Bank USA, as Trustee and
Collateral Agent
* * * * *
This Report includes statements that constitute forward-looking
statements within the meaning of Section 27A of the Securities Act and Section
21E of the Securities Exchange Act of 1934, as amended. These statements are
subject to risks and uncertainties. Forward-looking statements include
information concerning possible or assumed future results of operations of the
Company and its affiliates. These statements may relate to, but are not
limited to, information and assumptions about capital and other expenditures,
dividends, financing plans, capital structure, cash flow, pending legal and
regulatory proceedings and claims, including environmental matters, future
economic performance, operating income, cost savings, management's plans, goals
and objectives for future operations and growth. These forward-looking
statements generally are accompanied by words such as "intend," "anticipate,"
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"believe," "estimate," "expect," "should" or similar expressions. It should be
understood that these forward-looking statements are necessarily estimates
reflecting the best judgment of the Company's senior management, not guarantees
of future performance. They are subject to a number of assumptions, risks and
uncertainties that could cause actual results to differ materially from those
expressed or implied in the forward-looking statements. Important assumptions
relating to the forward-looking statements include, among others, assumptions
regarding demand for the Company's products, the expansion of product offerings
geographically or through new applications, the timing and cost of planned
capital expenditures, competitive conditions and general economic conditions.
These assumptions could prove inaccurate. Forward-looking statements also
involve risks and uncertainties, which could cause actual results that differ
materially from those contained in any forward-looking statement. Many of
these factors are beyond the Company's ability to control or predict. Such
factors include, but are not limited to, the following: the Company's
substantial leverage and potential inability to service its debt; the Company's
dependence on distributions from its subsidiaries; risks associated with the
Company's international operations and significant foreign assets; the
Company's dependence on its Israeli operations; competition in each of the
Company's markets; potential environmental liability; potential legislation
affecting the use of medicated feed additives; extensive regulation by numerous
government authorities in the United States and other countries; the Company's
reliance on the continued operation and sufficiency of its manufacturing
facilities; the Company's reliance upon unpatented trade secrets; the risks of
legal proceedings and general litigation expenses; potential operating hazards
and uninsured risks; the risk of work stoppages; the Company's dependence on
key personnel; and other factors discussed in the Company's filings with the
U.S. Securities and Exchange Commission.
Undue reliance should not be placed on forward-looking statements,
which speak only as of the date of this Report.
All subsequent written and oral forward-looking statements attributable
to the Company or any person acting on its behalf are expressly qualified in
their entirety by the cautionary statements contained or referred to in this
Report and any other cautionary statements that may accompany such
forward-looking statements. The Company does not undertake any obligation to
release publicly any revisions to these forward-looking statements to reflect
events or circumstances after the date of this document or to reflect the
occurrence of unanticipated events, unless the securities laws require the
Company to do so.
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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.
PHIBRO ANIMAL HEALTH CORPORATION
Dated: October 31, 2003 By: /s/ Jack C. Bendheim
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Jack C. Bendheim,
Chairman of the Board and President
By: /s/ Gerald K. Carlson
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Gerald K. Carlson,
Chief Executive Officer
By: /s/ Richard G. Johnson
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Richard G. Johnson,
Chief Financial Officer
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EXHIBIT INDEX
Exhibit No. Description
99.1 Press Release, dated October 31, 2003
99.2 Indenture, dated as of October 21, 2003, by and among
Phibro Animal Health Corporation and Philipp Brothers
Netherlands III B.V., as Issuers, the Guarantors named therein,
and HSBC Bank USA, as Trustee and Collateral Agent
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