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): November 22, 2002
A.M. CASTLE & CO.
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(Exact Name of Registrant as Specified in Its Charter)
Maryland 1-5415 36-0879160
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(State or Other Jurisdiction (Commission File Number) (IRS Employer
of Incorporation) Identification No.)
3400 North Wolf Road, Franklin Park, Illinois 60131
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(Address of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number, Including Area Code: (847) 455-7111
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Not Applicable
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(Former Name or Former Address, if Changed Since Last Report)
Item 5. Other Events.
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On November 22, 2002, the Company completed its previously announced
sale of 12,000 shares of its newly created Series A Cumulative Convertible
Preferred Stock (the "Series A Preferred") for an aggregate purchase price of
$12,000,000. Contemporaneously with the sale of the Series A Preferred, the
Company also completed the renegotiations of its loan covenants with its major
long-term lenders and its three bank lenders.
The Company sold the Series A Preferred in a private placement to a
number of current shareholders, who, in the aggregate, owned approximately 40%
of the Company's common stock (the "Common Stock") prior to the transaction. The
sale increased their aggregate holdings of Common Stock (on an as-converted
basis) and voting power initially by approximately 5%. The Series A Preferred
Stock has an initial conversion price of $6.69 per share of Common Stock. The
Series A Preferred is entitled to a quarterly dividend equal to the greater of
8% per annum or the total dividends declared and paid on the Common Stock on an
as-converted basis each year. For the other terms of the Series A Preferred, see
Exhibit 3, filed herewith. In connection with the sale of the Series A
Preferred, the Company entered into the Series A Cumulative Convertible
Preferred Stock Purchase Agreement (filed herewith as Exhibit 10.1) and a
Registration Rights Agreement (filed herewith as Exhibit 10.2).
In conjunction with the sale of the Series A Preferred, the Company
renegotiated its loan covenants (the "Debt Amendments") with its senior note
holders (who hold approximately $96,000,000 aggregate principal amount of senior
notes) and its two lender banks in the US (the senior note holders and lender
banks being referred to collectively as the "Lenders"). The Debt Amendments
expand certain financial covenants in order to provide greater financial and
operating flexibility. In exchange for the Debt Amendments, the interest rate or
other fees payable by the Company on the various senior debt instruments to the
Lenders (the "Senior Debt") will increase, raising, at the current debt level,
the Company's annual interest expense by approximately $2.1 million. Upon the
Company's debt attaining investment grade status, the interest expense will
decrease by approximately $1.6 million. As part of the Debt Amendments, certain
of the Company's subsidiaries entered into guarantees with respect to the Senior
Debt and, in addition, the Company and certain of its subsidiaries will grant
the Lenders security interests in substantially all of their respective assets.
As part of the negotiations, A. M. Castle & Co. (Canada), Inc. ("Castle Canada")
also amended its credit agreement with its Canadian bank lender and will grant
the bank a security interest in substantially all of its assets. Neither the
Company or any other subsidiary has guaranteed the debt of Castle Canada, nor
has Castle Canada guaranteed the debt of the Company or other subsidiary. Copies
of the agreements, as amended, between the Company and its senior note holders
are filed as exhibits hereto.
Further, the Company has signed a commitment letter for a $60 million
receivable securitization financing facility to replace its existing facility,
which expires in March 2003.
Item 7. Exhibits.
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(c) Exhibits:
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The exhibits accompanying this report are listed in the accompanying
Exhibit Index.
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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.
A.M. CASTLE & CO.
By: /s/ Edward F. Culliton
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Edward F. Culliton
Vice President and
Chief Financial Officer
Date: December 2, 2002
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EXHIBIT INDEX
The following exhibits are filed herewith:
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Exhibit No. Exhibit
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3 Articles Supplementary to the Company's Articles
of Incorporation creating the Company's Series A
Cumulative Convertible Preferred Stock, filed
November 22, 2002 with the State Department of
Assessments and Taxation of Maryland
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4.1 Note Agreement dated as of April 1, 1996 between
the Company and Nationwide Life Insurance Company
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4.2 First Amendment and Waiver to Note Agreement dated
as of December 1, 1998, to April 1, 1996 Note
Agreement
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4.3 Second Amendment dated as of November 22, 2002,
to April 1, 1996 Note Agreement
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4.4 Note Agreement dated as of May 15, 1997 among the
Company, Massachusetts Mutual Life Insurance
Company and United of Omaha Life Insurance Company
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4.5 First Amendment and Waiver to Note Agreement dated
as of December 1, 1998, to May 15, 1997 Note
Agreement
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4.6 Second Amendment dated as of November 22, 2002, to
Note Agreement dated as of May 15, 1997
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4.7 Note Agreement dated as of March 1, 1998 among the
Company, Allstate Life Insurance Company, The
Northwestern Mutual Life Insurance Company,
Massachusetts Mutual Life Insurance Company,
Mutual of Omaha Insurance Company and United of
Omaha Life Insurance Company
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4.8 First Amendment and Waiver to Note Agreement dated
as of December 1, 1998, to Note Agreement dated as
of March 1, 1998
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4.9 Second Amendment dated as of November 22, 2002, to
Note Agreement dated as of March 1, 1998
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10.1 Series A Cumulative Convertible Preferred Stock
Purchase Agreement, dated as of November 22, 2002
among the Company, the investors named therein
(the "Investors") and W.B. & Co, for itself, and
as nominee and agent of the Investors
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10.2 Registration Rights Agreement, dated as of
November 22, 2002 among the Company, the investors
named therein (the "Investors") and W.B. & Co, for
itself, and as nominee and agent of the Investors
relating to the Company's Series A Cumulative
Convertible Preferred Stock
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