-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, U3jSNq+jJWo+zDOK0E1dzbGRisVkiblEx8GbaNTL0BNEKeD5SFUTrmtNx2CEh8aj OuV6+B6Cwn5cWm1t7L39TA== 0000950116-97-002343.txt : 19971224 0000950116-97-002343.hdr.sgml : 19971224 ACCESSION NUMBER: 0000950116-97-002343 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19971218 ITEM INFORMATION: ITEM INFORMATION: FILED AS OF DATE: 19971223 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: GEOTEK COMMUNICATIONS INC CENTRAL INDEX KEY: 0000844843 STANDARD INDUSTRIAL CLASSIFICATION: RADIO & TV BROADCASTING & COMMUNICATIONS EQUIPMENT [3663] IRS NUMBER: 222358635 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: SEC FILE NUMBER: 001-11620 FILM NUMBER: 97742858 BUSINESS ADDRESS: STREET 1: 20 CRAIG RD CITY: MONTVALE STATE: NJ ZIP: 07645 BUSINESS PHONE: 2019309305 MAIL ADDRESS: STREET 1: 20 CRAIG ROAD CITY: MONTVALE STATE: NJ ZIP: 07465 FORMER COMPANY: FORMER CONFORMED NAME: GEOTEK INDUSTRIES INC DATE OF NAME CHANGE: 19920703 8-K 1 FORM 8-K 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) December 18, 1997 ----------------- GEOTEK COMMUNICATIONS, INC. -------------------------------------------------- (Exact name of registrant as specified in charter) Delaware 0-17581 22-2358635 ---------------------- ------------------------ --------------------- (State or other juris- (Commission File Number) (IRS Employer Identi- diction of incorporation) fication No.) 102 Chestnut Ridge Road, Montvale, New Jersey 07645 - --------------------------------------------- ---------- (Address of principle executive offices) (Zip Code) Registrant's telephone number, including area code 201-930-9305 ------------ N/A -------------------------------------------------------------- (Former name or former address, if changed since last report.) Item 5. Other Events On December 18, 1997, the holders of a majority in aggregate principal amount of Geotek Communications, Inc.'s (the "Company") 15% Senior Secured Discount Notes due 2005 (the "Secured Notes") agreed to consent to the amendment of certain provisions of the Indenture, dated as of June 30, 1995, between the Company and IBJ Schroder Bank & Trust Company, as trustee for the holders of the Senior Notes (the "Indenture"), governing the Secured Notes. The principal purposes of the amendments are to (i) effect the reallocation of 900 MHz specialized mobile radio licenses (the "900 MHz SMR Licenses") among the subsidiaries of the Company, all of whose outstanding capital stock (the "Pledged Companies") is or will be pledged to IBJ Schroder Bank & Trust Company, as collateral agent for the holders of the Secured Notes (the "Collateral Agent"), or whose outstanding capital stock is pledged (the "HNS Pledged Companies") to Hughes Network Systems, Inc. ("HNS") to secure certain loan facilities given by HNS to Geotek Financing Corporation, the Company's subsidiary ("GFC"), and certain of the Company's other subsidiaries, (ii) provide additional collateral security for the Secured Notes, (iii) permit the Company to incur additional indebtedness for working capital needs and general corporate purposes, (iv) permit the Company and its subsidiaries to secure certain indebtedness by granting additional liens on assets that are not collateral for the Secured Notes, (v) permit the Company to use a portion of the proceeds from certain asset dispositions for working capital needs and general corporate purposes, and (vi) permit the Company to transfer certain licenses from the Pledged Companies to other subsidiaries of the Company if the Company achieves specified subscriber levels. Under the amendments, the Company will be permitted to incur up to $20,000,000 of secured debt (increased from $10,000,000) and up to $70,000,000 of unsecured debt for general corporate purposes. The amount of unsecured debt permitted will be based on the amount of equity proceeds received by the Company after November 1, 1997: the Company will be permitted to incur unsecured indebtedness equal to (i) two times the net cash proceeds received from the issuance and sale of the Company's capital stock up to $40,000,000 of unsecured indebtedness plus (ii) the net cash proceeds received from the issuance and sale of the Company's capital stock up to $30,000,000 of unsecured indebtedness. In addition, the Company will be permitted (i) to incur additional unsecured indebtedness or (ii) to use the proceeds from asset sales outside the ordinary course of business (including the recent sale of the Company's interest in Bogen Communications International, Inc. but excluding the sales of the Company's interests in National Band Three Limited ("NB3") and Terrafon Bundelfunk GmbH & Co. KG and Terrafon Geschaftsfuhrungs Gesellschaft mbH (collectively, "Terrafon")) for working capital needs and general corporate purposes, up to an aggregate of $40,000,000. The Company will also be permitted to use up to 40% of the net cash proceeds from the sales of the Company's interests in NB3 and Terrafon for working capital needs and general corporate purposes. The Company will be required to use at least 40% of the net cash proceeds from the NB3 and Terrafon sales to purchase assets for use in the Company's GEONET systems in Boston, New York, Philadelphia and Washington D.C. (except that the Company may use up to $10,000,000 of such proceeds to purchase assets for use in the GEONET systems outside such northeast region markets) and at -2- least 20% of such proceeds to make a tender offer to the holders of the Secured Notes, on a pro rata basis according to the accreted value of the Secured Notes, within 30 days after the consummation of such sales. The amendments also include provisions for the reallocation of the Company's 900 MHz SMR Licenses among the Pledged Companies, the HNS Pledged Companies, and other subsidiaries of the Company (the "License Reallocation"). HNS has consented to the License Reallocation. Certain of the 900 MHz SMR Licenses held by the Pledged Companies will be subject to release if the Company (i) has at least 100,000 subscribers in the aggregate or (ii) has at least 50,000 subscribers in the aggregate and GFC provides the Collateral Agent with a third priority pledge of the stock of the HNS Pledged Companies, while others will be subject to release if (i) the Company has at least 30,000 subscribers in the aggregate, (ii) after the release, the released licenses will be used to secure (whether by pledge of the capital stock of the holder of the released licenses or a pledge of the released licenses) indebtedness permitted under the Indenture and (iii) the Company provides the Collateral Agent with a second priority lien on the capital stock of the holder of the released licenses or on the released licenses themselves. In conjunction with the amendments, the Company and its operating subsidiary, Geotek USA, Inc., will grant a security interest in network equipment and related assets used in the Boston, New York, Philadelphia and Washington D.C. markets to the Collateral Agent. Effectiveness of the amendments is subject to satisfaction of certain closing conditions, including the delivery of customary certificates of officers of the Company and opinions of counsel. In addition, certain provisions of the amendments will not become effective until certain regulatory approvals for the License Reallocation are received. In conjunction with the consent to the amendments by the holders of a majority in aggregate principal amount of the Senior Notes, HNS and S-C Rig Investments III, L.P. ("S-C Rig") have agreed to the amendment of their respective loan facilities to incorporate the Indenture as amended into the default provisions of such loan facilities. In addition, the Company has agreed with S-C Rig that the Company will not, without S-C Rig's consent, grant a security interest in network infrastructure used in the Dallas, Houston, Miami, Orlando, Phoenix, San Antonio or Tampa markets except for certain liens permitted under the Indenture. However, S-C Rig will not unreasonably withhold its consent to the Company's grant of liens on such assets in the Miami, Orlando and Tampa markets in connection with certain debt financing that may be received within the next six months. Item 7. Financial Statements, Pro Forma Financial Information and Exhibits (C) Exhibits 99 Press Release of Geotek Communications, Inc. dated December 19, 1997. -3- 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. GEOTEK COMMUNICATIONS, INC. Date: December 22, 1997 By: /s/ Robert Vecsler ----------------- -------------------------------- Name: Robert Vecsler Title: Secretary and General Counsel -4- EX-99 2 EXHIBIT 99 EXHIBIT 99 Contact: Randy Miller/Elysa Gonzalez Corporate/Investor Communications 201-930-9305 GEOTEK RESTRUCTURES TO FOCUS ON U.S. GROWTH -- Sale of European Assets for $85MM, Credit Amendment and Corporate Restructuring Enhances Opportunities for Long-Term Growth-- Montvale, New Jersey, December 19, 1997 -- Geotek Communications, Inc. (Nasdaq: GOTK) announced today that it is restructuring corporate assets, credit agreements and its management structure to better focus on delivering mobile business solutions to its U.S. subscriber base. Geotek said it has reached agreements to sell its European analog assets to Montreal-based Telesystem International Wireless Inc. for approximately $85 million in cash. It simultaneously announced the successful completion of agreements with senior note holders providing broader latitude to use funds from the sale of assets for working capital. In conjunction with these agreements the company announced a corporate restructuring designed to focus its sales, marketing and product development functions on serving the needs of the company's growing U.S. customer base. Geotek's European network businesses consist of National Band Three Limited, an analog wireless network in the United Kingdom, and a 50 percent stake in Terrafon Bundelfunk GmbH & Co. KG, a similar network in Germany. The sales are subject to regulatory approvals in each country and other conditions, and are expected to close within 60 days. "Our service capabilities have improved dramatically over the past nine months, and customers with mobile networking needs are responding positively," said Yaron Eitan, Chief Executive Officer of Geotek. "The sale of our analog operations in Europe and our recent sale of Bogen Communications International provides us a total of approximately $103.5 million in additional capital without dilution. With the amended bondholder agreement, we now have the financial flexibility to use those funds to further develop and enhance our service offerings." Consistent with the decision to focus its resources on the domestic opportunity, Geotek said it is streamlining both management and staffing. It has initiated a company-wide cost reduction program and is redrawing functional boundaries to improve efficiency and focus. Management changes include elevating the head of Geotek's U.S. operations, Michael McCoy, to Executive Vice President and Chief Operating Officer of Geotek Communications. The operations, product delivery and sales functions, which previously had separate reporting lines, will all report to Mr. McCoy. In addition, a strategic marketing and product development group has been formed to operate alongside these functions; it will be led by George Calhoun, Senior Vice President, Strategic Marketing. All corporate finance and accounting functions, which were previously separated by business unit, are being consolidated under Chief Financial Officer Robert Kerstein. Robert Vecsler, General Counsel, currently responsible for legal and regulatory affairs and human resources, assumes additional duties in planning and business development as Senior Vice President, Business Affairs. Messrs. McCoy, Calhoun, Vecsler and Kerstein will all report to Mr. Eitan. "Our priority focus going forward is on growing our U.S. subscriber base," Mr. Eitan said. "Our growth rate is improving and we hope to deliver even stronger subscriber growth in the near term by enhancing the quality and range of our coverage and by completing the development of new mobile data applications." Geotek agreed to amend certain provisions in the indenture governing its 15% Senior Notes as well as its Soros Group and Hughes Network Systems ("HNS") credit facilities. The amendment will provide Geotek broader latitude in using funds raised from the sale of assets for general corporate purposes. "This amendment is integral to our current financing plans and is a major step in developing the added flexibility Geotek needs to implementing its long-term business plan." Mr. Kerstein said. Under the agreements, Geotek will be allowed to use the entire $18.5 million in proceeds from the recently announced sale of Bogen Communications International for general corporate purposes. Further, Geotek will be able to use 40 percent of the proceeds from the European network sales for general corporate purposes and 40 percent for replacement or telecommunications assets and will apply the remaining 20 percent to retire existing senior noteholders indebtedness. Under the terms of the original indenture, the use of proceeds from the sale of assets or from the incurrence of debt was restricted to the purchase of "hard" replacement or telecommunications assets. As part of this agreement the company will be allowed, under certain circumstances, to use the proceeds from the incurrence of additional debt for general corporate purposes. The agreement includes a redistribution of Geotek's 900 MHz specialized mobile radio licenses among Geotek subsidiaries pledged to the senior noteholders and HNS. As part of the agreement and license redistribution, Geotek has agreed to pledge to its senior noteholders and HNS security interests in additional 900 MHz licenses. Further, Geotek agreed to provide its senior noteholders a security interest in network equipment in its northeast markets and agreed with Soros to secure its consent prior to any grant of security in Geotek's remaining current markets. The transaction is subject to certain closing conditions including the receipt of appropriate regulatory approvals. Geotek Communications, Inc. is a provider of mobile business solutions and services. The Company targets selected transportation, distribution, field service and contacting industry segments and is currently providing wireless services to more than 10,000 users in Dallas, Houston, Galveston, San Antonio, Phoenix, Boston, New York/New Jersey, Philadelphia, Delaware, Washington, D.C., Baltimore, northern Virginia, Orlando, Central and Southern Florida. For more information on Geotek, visit our web site at www.geotek.com or call 1-888-39-FLEET. -----END PRIVACY-ENHANCED MESSAGE-----