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): April 1, 1999
EQUIVEST FINANCE, INC.
(Exact name of registrant as specified in its charter)
Delaware 333-29015 59-2346270
(State or other (Commission (I.R.S. Employer
jurisdiction File Number) Identification No.)
of incorporation)
100 NORTHFIELD STREET
GREENWICH, CONNECTICUT 06830
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (315) 422-9088
INFORMATION TO BE INCLUDED IN REPORT
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
PRESS RELEASE
Equivest Finance, Inc.
Equivest Announces Completion
of Resort Acquisitions
Greenwich, Connecticut, April 1, 1999. Equivest Finance, Inc. (NASD:EQUI)
announced today that it has completed its previously announced acquisition of
six timeshare vacation resorts, one resort development site, management
contracts and consumer notes receivable from Kosmas Group International, Inc.
("KGI").
Bluebeard's Castle, Bluebeard's Beach Club and Resort and the Elysian
Beach Hotel and Resort, three of the resorts acquired by Equivest, are located
in St. Thomas, U.S.V. I. These three properties currently include 311 units,
with the ability to construct significant additional units. In addition,
Equivest has acquired the Avenue Plaza Hotel and Resort in New Orleans,
Louisiana, which currently has 265 units. The Avenue Plaza is located on St.
Charles Avenue in the Garden District of New Orleans. The Coconut Malorie Hotel
and Resort in Ocean City, Maryland has 85 units in an all-suite configuration,
and is located directly on the intra-coastal waterway. Finally, the Ocean Gate
Resort in St. Augustine, Florida, includes 24 two-and three-bedroom units on a
beachfront property. Equivest also purchased rights to acquire two tracts of
additional contiguous land that will enable it to construct an additional 60
units in St. Augustine. The Company also acquired land on Pennsylvania Avenue in
Washington, D.C. on which it intends to construct a new timeshare resort of
approximately 65 units, using existing permits and plans.
The newly acquired resorts had total sales of vacation ownership intervals
exceeding $20 million in 1998. The assets acquired in the transaction have a
book value exceeding $70 million. This includes more than 20,000 vacation
ownership intervals in current inventory with a total gross sales value at
current prices of more than $180 million, and more than $16 million in consumer
notes receivable. Approximately $4 million of these consumer notes had
previously been financed by Equivest's subsidiary Resort Funding, Inc.
Including the newly-acquired resorts, Equivest and its subsidiaries now
own or operate 14 timeshare resorts on the East and Gulf coasts of the United
States and in the Caribbean. The Company has total assets of more than $250
million, with a consumer base of more than 40,000 families, including borrowers
from Resort Funding, Inc.
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As previously disclosed, the Company's acquisition involved cash
consideration of $4 million, less certain adjustments, and the assumption of
approximately $45 million in debt or other liabilities relating to the acquired
resorts. In addition, the Company agreed to purchase the interest of a third
party with prior outstanding debt relating to the St. Thomas properties,
together with additional inventory in one of the St. Thomas resorts, for $2
million in cash and 490,000 shares of Equivest stock. Equivest will also issue
an additional 250,000 shares of its common stock to KGI if Equivest has at least
$6 million in net income from the acquired properties during the twelve months
ending March 31, 2000. KGI and Equivest have agreed to indemnify each other with
respect to certain liabilities.
The Company will seek to retain all existing employees at the acquired
resorts except for a small number of former senior managers at the St. Thomas
resorts. The Company also expects to make significant capital improvements at
these resorts, including additional amenities and upgraded facilities.
Richard C. Breeden, Equivest's Chairman, President and Chief Executive
Officer, stated, "We are delighted to complete this major transaction, which
more than doubles the size of our resort development business. We have added
very strong senior managers to the company, and we are very pleased to have
added a strong group of employees at each location. We expect the five new
oceanfront properties will prove very attractive to our existing customers at
our New England resorts, as well as to new purchasers at each location. Our
urban locations in New Orleans and, when completed, the heart of Washington,
D.C. should also provide our owners with exciting new vacation opportunities."
Certain statements in this press release are forward-looking. These may be
identified by the use of forward-looking words or phrases such as "believe,"
"expect," "anticipate," "should," "planned," "estimated," and "potential." These
forward-looking statements are based on the Company's current expectations. The
Private Securities Litigation Reform Act of 1995 provides a "safe harbor" for
such forward-looking statements. In order to comply with the terms of the safe
harbor, the Company notes that a variety of factors could cause actual results
and experience to differ materially from the anticipated results or other
expectations expressed in such forward-looking statements. The risks and
uncertainties that may affect the operations, performance, development, and
results of the Company's businesses include a downturn in the real estate cycle,
lack of available qualified prospects to tour the Company's resorts, competition
from other developers, lack of appropriate sites for future developments,
failure to complete construction in a timely and cost-efficient manner, or other
factors which result in lower sales of vacation ownership interests, possible
financial difficulties of one or more of the developers with whom the Company
does business, including the risk of carrying non-performing assets or losses if
defaulted loans prove to have insufficient collateral backing, fluctuations in
interest rates, prepayments by consumers of indebtedness, inability of
developers to honor replacement obligations for defaulted consumer notes, and
competition from organizations with greater financial resources.
CONTACT: Sandy Caswell, Regan Communications, (617)742-8180.
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Item 6. Resignation of Registrant's Directors
Not Applicable.
Item 7. Financial Statements and Exhibits
Not Applicable.
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.
EQUIVEST FINANCE, INC.
Date: April 2, 1999 By: /s/ Gerald L. Klaben, Jr.
-------------------------------
Name: Gerald L. Klaben, Jr.
Title: Senior Vice President/CFO
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