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): September 18, 2001
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: (203) 618-0065
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 ANNOUNCES COMPLETION OF $37 MILLION CONSTRUCTION LOAN FINANCING
TO ELIMINATE DEBT HELD BY CS FIRST BOSTON - -
TRANSACTION REDUCES DEBT BY $2.7 MILLION
Greenwich, Connecticut. September 18, 2001. Equivest Finance, Inc.
(NASDAQSC: EQUI) today announced that it has completed a $37 million
construction loan financing extended by CapitalSource Finance LLC of Washington,
D.C. The new loan facility was used to repay all outstanding indebtedness held
by CS First Boston LLC. This represents payoff of the remaining CS First Boston
debt approximately five months before its maturity date on February 16, 2002,
and completes repayment of more than $150 million of CSFB debt by the Company
during the past two years. As a result of this transaction, net indebtedness of
the Company was reduced by approximately $2.7 million.
The overall facility includes separate refinanced loans on several
different Equivest properties, including its resorts in St. Thomas, USVI, New
Orleans, LA and Ocean City, MD. Each of these new loans from CapitalSource are
subject to repayment through release fees on sales of vacation ownership
intervals, or "VOIs", as is traditional in lending involving vacation ownership
or timeshare resorts. Unlike the CSFB debt, which had a final maturity of
February 2002, the new CapitalSource loans with an approximate balance of $25.0
million mature in August 2005, while loans with an aggregate balance of $7.3
million mature in August 2004.
The CapitalSource indebtedness carries a higher coupon interest rate
than the prior short term CSFB debt, though the Company will receive a 5%
discount from the face amount of the former CSFB debt upon full repayment to
CapitalSource of each individual loan, so long as no defaults occur thereunder.
This future principal reduction of $1.75 million, if it is realized, will be in
addition to the initial net $2.7 million debt reduction.
In addition, as part of the transaction CapitalSource obtained all
warrants of the Company previously held by CSFB. Of these, CapitalSource has
agreed to transfer to the Company for cancellation 200,000 warrants at a price
of $2.02. In addition, CapitalSource has also agreed to transfer to the Company
for cancellation 200,000 warrants at a price of $2.52, and 180,000 warrants at a
price of $8.00 upon completion of certain conditions the Company expects to
occur.
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Richard C. Breeden, Chairman, President and Chief Executive Officer
of Equivest noted that "With this new financing, we have opened up an important
new relationship with a major new lender, replaced short term with medium term
maturities, obtained the right to recover a substantial number of warrants
previously outstanding and obtained the ability to repay the former CSFB debt at
a 5% discount. Taken together, the new facility is an important milestone in the
Company's continuing strengthening of its balance sheet. With this transaction
we have eliminated the bulk of our entire short term debt other than normal
payables."
Since January 1, 2001, the Company has reduced net indebtedness by
more than $37 million, including the $2.7 million of debt extinguished as part
of this transaction but not including the future $1.7 million principal
repayment discount. Thus, approximately 13% of the Company's total debt has been
eliminated since January 1, 2001. The Company expects further reductions of net
indebtedness to occur during the balance of 2001.
Equivest operates hotels and vacation ownership resorts at 29
locations along the eastern and Gulf coasts of the United States and in St.
Thomas, USVI, with more than 83,500 owners of vacation interests in its
properties. Equivest also operates a specialty finance company providing
financing for consumer purchases of vacation intervals in its own resorts and
those of independent developers.
Certain statements in this press release are forward-looking. They
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 or
indebtedness, inability of developers to honor replacement obligations for
defaulted consumer notes, and competition from organizations with greater
financial resources.
For Information Contact:
Gerald L. Klaben, Jr., Chief Financial Officer (203) 618-0065
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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: September 25, 2001 By: /S/GERALD L. KLABEN, JR.
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Name: GERALD L. KLABEN, JR.
Title: SENIOR VICE PRESIDENT & CFO
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