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) SEPTEMBER 10, 1999
GeoLogistics CORPORATION
- --------------------------------------------------------------------------------
(Exact Name of Registrant as Specified in Charter)
DELAWARE 333-42607 22-3438013
- --------------------------------------------------------------------------------
(State or Other Jurisdiction (Commission File Number) (IRS Employer
of Incorporation) Identification No.)
13952 DENVER WEST PARKWAY, GOLDEN, COLORADO 80401
- --------------------------------------------------------------------------------
(Address of principal executive offices and Zip Code)
Registrant's telephone number, including area code: (303) 704-4400
N/A
- --------------------------------------------------------------------------------
(Former Name or Former Address, if Changed Since Last Report)
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS.
On September 10, 1999, GeoLogistics Corporation, a Delaware
corporation (the "Company"), and its wholly-owned subsidiary, GeoLogistics
Americas, Inc., a Delaware corporation ("Americas"), sold all of the assets
of the business of GeoLogistics Air Services, Inc. (the "GLAS Business") to
FDX Logistics, Inc. (formerly as FDX Global Logistics, Inc.), a Delaware
corporation (the "Purchaser"), pursuant to an Asset Purchase Agreement, dated
as of August 6, 1999 (the "Purchase Agreement"), by and among the Company,
Americas, GeoLogistics Air Services, Inc. ("GLAS"), a Delaware corporation,
FDX Corporation, a Delaware corporation, and the Purchaser. Pursuant to the
terms of the Purchase Agreement, Purchaser transferred all of its right to
receive and take title to the assets of the GLAS Business (the "Assets") to
its wholly-owned direct subsidiary, Caribbean Transportation Services, Inc.
Pursuant to the Purchase Agreement, the Company sold substantially all of the
Assets for aggregate cash consideration of $115,768,361. The Assets consisted
primarily of customer lists, business records, warehouse and computer
equipment, intellectual property, contract rights under service agreements
for freight handling and cargo-aircraft transportation, facility leases,
licenses, cash and trade accounts receivables relating to the provision of
airfreight services between the United States, on the one hand, and Puerto
Rico and the Dominican Republic, on the other. The consideration for the sale
of assets was determined by arm's length negotiations among the parties.
There is no material relationship between the Company and its affiliates,
officers and directors (or any associate of any such officers or directors),
on the one hand, and the Purchaser and its affiliates, officers and
directors, on the other. The proceeds of the disposition of the GLAS Assets
will be applied by the Company to fund the $10,000,000 escrow account
contemplated by the Purchase Agreement, pay fees and expenses associated with
the transaction and reduce revolving debt that was secured by the GLAS Assets.
The Purchase Agreement is attached hereto as Exhibit 10.1 and is
incorporated herein by reference.
ITEM 5. OTHER EVENTS.
In connection with the application of the proceeds of the disposition of
the GLAS Business by the Company, the Company and certain of its subsidiaries
entered into Amendment No. 4 (the "Amendment") to its Amended and Restated
Loan Agreement dated as of October 28, 1997 (as previously amended by
Amendment No. 1 dated December 12, 1997, Amendment No. 2 dated as of July 10,
1998, and Amendment No. 3 dated as of February 26, 1999, the "Loan
Agreement"). Pursuant to the terms of the Amendment, (a) the domestic
commitment under the Loan Agreement was reduced from $100,000,000 to
$50,500,000 and the UK commitment under the Loan Agreement was reduced from
$30,000,000 to $20,000,000, provided that the aggregate obligations
outstanding under the domestic commitment and the UK commitment will not
exceed $50,500,000 at any time, (b) the supplemental commitment under the
Loan Agreement was reduced from $30,500,000 to $15,000,000, (c) (1) the
definition of Domestic Borrowing Base was amended to provide that the
domestic borrowing base, and as a result the maximum amount that the Company
may borrow under the domestic portion of the Loan Agreement, will be equal to
the sum of (A) 50% of the eligible receivables of Americas and its restricted
subsidiaries, (B) 65% of other domestic eligible receivables and (C) 100% of
the sponsor
collateral then effective instead of 85% of the Company's domestic
receivables and (2) the definition of UK Borrowing Base was amended to
provide that the UK borrowing base, and as a result the maximum amount that
the Company may borrow under the UK portion of the Loan Agreement, will be
equal to 65% of the UK eligible receivables instead of 80% of the UK eligible
receivables and (d) the maturity date under the Loan Agreement was shortened
to March 31, 2000, upon which date all of the obligations under the Loan
Agreement will be due and payable in full. In addition, the Amendment
included the following changes, among others: (a) the base rate margin was
increased to 2% per annum, (b) the Eurodollar rate margin was increased to
3.50% per annum, (c) a Change of Control Event (as defined in the Amendment)
will constitute an event of default under the Loan Agreement, (d) the letter
of credit sublimit was reduced from $60,000,000 to $30,000,000, (e) the
Company and the other borrowers under the Loan Agreement must repay the
outstanding obligations under the Loan Agreement upon the disposition,
subject to certain qualifications, of (1) the capital stock of any borrower
under the Loan Agreement or any of its active subsidiaries, (2) substantially
all of the assets of a division of the Company or any of its active
subsidiaries or (3) the sale of an individual asset having a value in excess
of $5,000,000, (f) the Company's debt restrictions were amended to add an
additional category of permitted debt consisting of no more than $19,500,000
of "supplemental loans" (or other loans made by the Company's shareholders
outside of the Loan Agreement) that are subordinated to other debt under the
Loan Agreement and unsecured, (g) the covenant relating to EBITDA of the
Company was amended to provide that EBITDA for the three month period ended
December 31, 1999 will not be less than a deficit of $500,000 and (h) the
interest charge coverage ratio covenant was deleted.
The Amendment is attached hereto as Exhibit 10.2 and is
incorporated herein by reference.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS
(a) Financial Statements of Business Acquired: Not applicable.
(b) Pro Forma Financial Statements: The Registrant will file the
required financial statements and pro forma financial information in accordance
with Regulation S-X by an amendment to this Form 8-K not later than 60 days from
the date this Form 8-K is required to be filed.
(c) Exhibits: The following documents are filed as exhibits to this
report:
EXHIBIT NO. DESCRIPTION
10.1 Asset Purchase Agreement dated as of August
6, 1999 among GeoLogistics Air Services,
Inc., GeoLogistics Americas, Inc., and
GeoLogistics Corporation, and FDX Logistics,
Inc. (formerly FDX Global Logistics, Inc.)
and FDX Corporation.
10.2 Amendment No. 4, dated as of September 10,
1999, to the Amended and Restated Loan
Agreement dated as of October 28, 1997 (as
previously
amended by an Amendment No. 1 dated December
12, 1997, an Amendment No. 2 dated as of
July 10, 1998, and an Amendment No. 3 dated
as of February 26, 1999, the "Loan
Agreement"), among GeoLogistics Corporation,
GeoLogistics Services, Inc., GeoLogistics
Americas, Inc., The Bekins Company, ILLCAN,
Inc., ILLSCOT, Inc., GeoLogistics Limited,
and ING (U.S.) Capital Corporation (now
known as ING (U.S.) Capital LLC and referred
to as "ING Capital"), and ING Bank, N.V.
(London, England Branch).
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.
GEOLOGISTICS CORPORATION
Date: September 17, 1999 By: /s/ Ronald Jackson
--------------------------------
Ronald Jackson
Vice President and General Counsel
EXHIBIT INDEX
EXHIBIT
10.1 Asset Purchase Agreement dated as of August 6,
1999 among GeoLogistics Air Services, Inc.,
GeoLogistics Americas, Inc., and GeoLogistics
Corporation, and FDX Logistics, Inc. (formerly
FDX Global Logistics, Inc.) and FDX Corporation.
10.2 Amendment No. 4, dated as of September 10,
1999, to the Amended and Restated Loan
Agreement dated as of October 28, 1997 (as
previously amended by an Amendment No. 1 dated
December 12, 1997, an Amendment No. 2 dated as
of July 10, 1998, and an Amendment No. 3 dated
as of February 26, 1999, the "Loan Agreement"),
among GeoLogistics Corporation, GeoLogistics
Services, Inc., GeoLogistics Americas, Inc.,
The Bekins Company, ILLCAN, Inc., ILLSCOT,
Inc., GeoLogistics Limited, and ING (U.S.)
Capital Corporation (now known as ING (U.S.)
Capital LLC and referred to as "ING Capital"),
and ING Bank, N.V. (London, England Branch).