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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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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 19, 2001 (March 17, 2001)
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PHYCOR, INC.
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(Exact name of registrant as specified in its charter)
Tennessee 0-19786 62-13344801
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(State or Other (Commission File (I.R.S. Employer
Jurisdiction of Number) Identification
Incorporation) Number)
30 Burton Hills Boulevard
Suite 400
Nashville, Tennessee 37215
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(Address of principal executive offices) (Zip Code)
(615) 665-9066
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(Registrant's telephone number, including area code)
Not applicable
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(Former name or former address, if changed since last report)
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ITEM 5. OTHER EVENTS
PhyCor, Inc. (the "Company") has entered into limited forbearance
agreements with noteholders representing 57% in the aggregate principal amount
of the Company's outstanding 4.5% Convertible Subordinated Debentures Due 2003,
with a principal amount outstanding of $196.5 million (the "Notes"). As
previously announced, the Company failed to make the February 15, 2001 interest
payment on the Notes. As of March 17, 2001, the Company's failure to make the
interest payment caused an event of default ("Event of Default") under the
terms of the Indenture related to the Notes. Pursuant to the forbearance
agreements, the holders have agreed not to take action under the Notes until
March 31, 2001, subject to automatic 10 business day extensions. The Company has
initiated discussions with an informal committee of holders of the Notes
regarding a possible restructuring.
In addition, under the Company's Fourth Amended and Restated
Revolving Credit Agreement dated as of August 25, 2000, as amended (the "Credit
Facility"), this Event of Default under the Notes permits the Majority Banks (as
defined in the Credit Facility) to require the Company to collateralize with
cash all outstanding letters of credit. Currently $6.1 million would be required
to satisfy this obligation. The Company anticipates obtaining a waiver from the
Majority Banks. Finally, if the Notes were to be accelerated, an event of
default would occur under the Company's Zero Coupon Convertible Subordinated
Notes Due 2014 with a present value of approximately $109 million (the "Warburg
Notes"), held by affiliates of Warburg, Pincus & Co. ("Warburg, Pincus"). The
Company has obtained a waiver and forbearance agreement through June 30, 2001
from Warburg, Pincus relating to the possible default under the Warburg Notes,
subject to earlier termination in certain circumstances.
There can be no assurance that the Company will obtain a continuation
of the forbearance agreements or the waivers from the holders of the Notes, the
Majority Banks or Warburg, Pincus. Failure to obtain a continuation of the
agreements or waivers could have a material adverse effect on the Company.
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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.
PHYCOR, INC.
By: /s/ Tarpley B. Jones
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Tarpley B. Jones
Executive Vice President and
Chief Financial Officer
Date: March 19, 2001
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