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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 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): June 13, 1997
TRANSTEXAS GAS CORPORATION
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(Exact name of registrant as specified in its charter)
DELAWARE
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(State or other jurisdiction of incorporation)
1-12204 76-0401023
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(Commission File Number) (I.R.S. Employer
Identification No.)
1300 North Sam Houston Parkway East, Suite 310
Houston, Texas 77032
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(Address of principal executive offices, including zip code)
(281) 987-8600
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(Registrant's telephone number, including area code)
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ITEM 1. CHANGES IN CONTROL OF REGISTRANT.
Not applicable.
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS.
Not applicable.
ITEM 3. BANKRUPTCY OR RECEIVERSHIP.
Not applicable.
ITEM 4. CHANGES IN REGISTRANT'S CERTIFYING ACCOUNTANT.
Not applicable.
ITEM 5. OTHER EVENTS.
LOBO SALE. On May 29, 1997, TransTexas Gas Corporation
("TransTexas") entered into and consummated a stock purchase
agreement with an unaffiliated buyer (the "Lobo Sale
Agreement"), with an effective date of March 1, 1997, to
effect the sale (the "Lobo Sale") of the stock of TransTexas
Transmission Corporation ("TTC"), its subsidiary that owned
substantially all of TransTexas' Lobo Trend producing
properties and related pipeline transmission system, for a
sales price of approximately $1.1 billion, subject to
adjustments as provided for in the Lobo Sale Agreement.
Purchase price adjustments were made for, among other things:
the value of certain NGLs and stored hydrocarbons; the value
of gas in TTC's pipeline; prepaid expenses relating to
post-effective date operations; post-closing expenses related
to pre-closing operations; the value of oil and gas produced
and sold between the effective date of the Lobo Sale Agreement
and closing (approximately $44 million); property defects;
and estimated costs associated with liabilities incurred
before closing. Purchase price adjustments made at the
closing of the Lobo Sale are subject to a review,
reconciliation and resolution process, which is expected to be
completed within 105 days following the closing. With
proceeds from the Lobo Sale, TransTexas repaid certain
indebtedness and other obligations, including production
payments, in an aggregate amount of approximately $84 million.
The remaining net proceeds have been or will be used for the
repurchase or redemption of the Senior Secured Notes and for
general corporate purposes.
TEC NOTES OFFERING. On June 13, 1997, TransAmerican Energy
Corporation ("TEC"), completed a private offering (the "TEC
Notes Offering") of $475 million aggregate principal amount of
11 1/2% Senior Secured Notes due 2002 (the "TEC Senior Secured
Notes") and $1.13 billion aggregate principal amount of 13%
Senior Secured Discount Notes due 2002 (the "TEC Senior
Secured Discount Notes" and, together with the TEC Senior
Secured Notes, the "TEC Notes") for net proceeds of
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approximately $1.3 billion. The TEC Notes are senior
obligations of TEC, secured by a lien on substantially all of
its existing and future assets, including the intercompany
loans described below. In conjunction with the TEC Notes
Offering, TransTexas has completed or intends to complete the
following transactions (collectively, the "Transactions"): (a)
borrowing $450 million pursuant to an intercompany loan from
TEC; (b) a tender offer and consent solicitation (the "Tender
Offer") for TransTexas' $800 million aggregate principal
amount of 11 1/2% Senior Secured Notes due 2002 (the "Senior
Secured Notes"), (c) an offer (the "Subordinated Notes
Exchange Offer") to exchange approximately $115.8 million
aggregate principal amount of new notes that pay interest in
cash at the rate of 13 3/4% per annum for TransTexas' $189
million aggregate principal amount of 13 1/4% Senior
Subordinated Notes due 2003 (the "Subordinated Notes"); and
(d) a dividend on, or share repurchase program for, shares of
TransTexas' common stock (the "Stock Repurchase Program") in
an aggregate amount of approximately $400 million.
INTERCOMPANY LOANS TO TRANSTEXAS AND TARC. With the proceeds
of the TEC Notes Offering, TEC made intercompany loans to
TransTexas (the "TransTexas Intercompany Loan") and
TransAmerican Refining Corporation ("TARC") (the "TARC
Intercompany Loan"). The TransTexas Intercompany Loan is in
the principal amount of $450 million and (i) bears interest at
a rate of 10 7/8% per annum, payable semi- annually in cash in
arrears and (ii) is secured initially by a security interest
in substantially all of the assets of TransTexas including
the TransTexas Disbursement Account (described below), but
excluding inventory, receivables and equipment. The TARC
Intercompany Loan is in the original amount of $676 million,
and (i) accretes principal at 16% per annum, compounded
semi-annually, until June 15, 1999, to a final accreted value
of $920 million, and thereafter pays interest semi-annually in
cash in arrears on the accreted value thereof, at a rate of
16% per annum, and (ii) is secured initially by a security
interest in substantially all of TARC's assets other than
inventory, receivables and equipment. The Intercompany Loans
will mature on June 1, 2002. The Intercompany Loan Agreements
contain certain restrictive covenants, including, among
others, limitations on incurring additional debt, asset sales,
dividends and transactions with affiliates. Upon the
occurrence of a Change of Control (as defined), TEC will be
required to make an offer to purchase all of the outstanding
TEC Notes at a price equal to 101% of the principal amount
thereof, together with accrued and unpaid interest, if any,
or, in the case of any such offer to purchase the TEC Senior
Secured Discount Notes prior to June 15, 1999, at a price
equal to 101% of the accreted value thereof, in each case, to
and including the date of purchase. Pursuant to the terms of
the Intercompany Loans, TEC may require TransTexas and TARC to
pay a pro rata share of the purchase price paid by TEC.
SENIOR SECURED NOTES TENDER OFFER. On June 13, 1997,
TransTexas completed a tender offer for its Senior Secured
Notes for 111 1/2% of their principal amount
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(plus accrued and unpaid interest). Approximately $785.4
million principal amount of Senior Secured Notes were tendered
and accepted by TransTexas. On June 30, 1997, TransTexas
redeemed the Senior Secured Notes remaining outstanding
pursuant to the terms of the Senior Secured Notes Indenture.
SUBORDINATED NOTES EXCHANGE OFFER. On June 19, 1997,
TransTexas completed an exchange offer, pursuant to which it
exchanged approximately $115.8 million aggregate principal
amount of its 13 3/4% Senior Subordinated Notes due 2001 (the
"Subordinated Exchange Notes") for all of the Subordinated
Notes. The indenture governing the Subordinated Exchange
Notes includes certain restrictive covenants, including, among
others, limitations on incurring additional debt, asset sales,
dividends and transactions with affiliates.
As a result of the Lobo Sale, the Tender Offer and the
Exchange Offer, TransTexas expects to record a pretax gain of
approximately $600 million and a pretax extraordinary charge
of approximately $120 million during the quarter ending July
31, 1997.
STOCK REPURCHASE PROGRAM. TransTexas has implemented a stock
repurchase program pursuant to which it plans to repurchase
common stock from its public stockholders and from its
affiliates, including TEC and TARC. It is anticipated that
TransTexas will acquire four times the number of shares from
its affiliated stockholders than it acquires from its public
stockholders. Shares may be purchased through open market
purchases, negotiated transactions or tender offers, or
combination of the above. It is anticipated that the price
paid to affiliated stockholders will equal the weighted
average price paid to purchase shares from the public
stockholders. Approximately $400 million from the proceeds of
the TransTexas Intercompany Loan was deposited in a
disbursement account to fund the stock repurchase program.
Funds from the disbursement account may also be used to pay
dividends on TransTexas common stock. As of July 31, 1997,
TransTexas had purchased approximately $49.6 million in value
of common stock from the public.
TRANSTEXAS DISBURSEMENT ACCOUNT. Pursuant to a disbursement
agreement (the "Disbursement Agreement") among TransTexas,
TEC, the TEC Indenture Trustee, and Firstar Bank of Minnesota,
N.A. as disbursement agent, approximately $400 million of the
proceeds of the TransTexas Intercompany Loan was placed in an
account (the "Disbursement Account") to be held and invested
by the disbursement agent until disbursed. Funds in the
Disbursement Account will be disbursed to TransTexas as needed
to fund the stock repurchase program. TransTexas may at any
time request disbursement of interest earned on the funds in
the Disbursement Account.
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ITEM 6. RESIGNATIONS OF REGISTRANT'S DIRECTORS.
Not applicable.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(a) Financial Statements of Businesses Acquired:
Not applicable.
(b) Pro forma financial information:
The pro forma financial information is incorporated
herein by reference to pages PF-1 through PF-7 of the
Registration Statement of the Company on Form S-4
(333-33803).
(c) Exhibits:
The following exhibits are filed as a part of this report:
4.1 Second Supplemental Indenture dated June 13, 1997
between the Company, as issuer, and Firstar Bank of
Minnesota, N.A., as trustee.
4.2 Indenture dated June 13, 1997 governing the Company's
Senior Subordinated Notes due 2001 between the
Company, as issuer and Bank One, NA, as trustee (filed
as Exhibit 4.1 to the Company's registration
statement on Form S-4 (333-33803), and incorporated
herein by reference thereto).
4.3 Registration Rights Agreement dated June 13, 1997
between the Company and the holders of the Company's
Senior Subordinated Notes due 2001 (filed as Exhibit
4.2 to the Company's registration statement on Form S-4
(333-33803), and incorporated herein by reference
thereto).
4.4 Loan Agreement dated June 13, 1997 between the Company
and TEC.
4.5 Security and Pledge Agreement dated June 13, 1997 by
the Company in favor of TEC.
4.6 Disbursement Agreement dated June 13, 1997 among the
Company, TEC and Firstar Bank of Minnesota, as
disbursement agent and trustee.
99.1 Pro Forma Condensed Consolidated Financial Information
of TransTexas Gas Corporation. (Filed as a part of the
Company's registration statement on Form S-4
(333-33803), and incorporated herein by reference
thereto).
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ITEM 8. CHANGE IN FISCAL YEAR.
Not applicable.
ITEM 9. SALES OF EQUITY SECURITIES PURSUANT TO REGULATION S.
Not applicable.
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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.
TRANSTEXAS GAS CORPORATION
By: /s/ ED DONAHUE
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Name: Ed Donahue
Title: Vice President and Chief Financial
Officer
Dated: August 15, 1997
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INDEX TO EXHIBITS
EXHIBIT
NUMBER DESCRIPTION
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4.1 Second Supplemental Indenture dated June 13, 1997
between the Company, as issuer, and Firstar Bank of
Minnesota, N.A., as trustee.
4.2 Indenture dated June 13, 1997 governing the Company's
Senior Subordinated Notes due 2001 between the
Company, as issuer and Bank One, NA, as trustee (filed
as Exhibit 4.1 to the Company's registration
statement on Form S-4 (333-33803), and incorporated
herein by reference thereto).
4.3 Registration Rights Agreement dated June 13, 1997
between the Company and the holders of the Company's
Senior Subordinated Notes due 2001 (filed as Exhibit
4.2 to the Company's registration statement on Form S-4
(333-33803), and incorporated herein by reference
thereto).
4.4 Loan Agreement dated June 13, 1997 between the Company
and TEC.
4.5 Security and Pledge Agreement dated June 13, 1997 by
the Company in favor of TEC.
4.6 Disbursement Agreement dated June 13, 1997 among the
Company, TEC and Firstar Bank of Minnesota, as
disbursement agent and trustee.
99.1 Pro Forma Condensed Consolidated Financial Information
of TransTexas Gas Corporation. (Filed as a part of the
Company's registration statement on Form S-4
(333-33803), and incorporated herein by reference
thereto).