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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13D
UNDER THE SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. __)1
Darling International Inc.
--------------------------------------------------------------------------------
(Name of Issuer)
Common Stock, $0.01 par value per share
--------------------------------------------------------------------------------
(Title of Class of Securities)
237266101
--------------------------------------------------------------------------------
(CUSIP Number)
Stuart J. Lissner, Managing Director
PPM America, Inc.
225 West Wacker Drive, Suite 1200
Chicago, IL 60606
Telephone: (312) 634-2501
--------------------------------------------------------------------------------
Name, Address and Telephone Number of Person Authorized to Receive Notices
and Communications)
May 13, 2002
--------------------------------------------------------------------------------
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of ss.ss. 240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check the
following box. [ ]
NOTE: Schedules filed in paper format shall include a signed original and
five copies of the schedule, including all exhibits. See ss. 240.13d-7(b) for
other parties to whom copies are to be sent.
1 The remainder of this cover page shall be filled out for a reporting person's
initial filing on this form with respect to the subject class of securities, and
for any subsequent amendment containing information which would alter
disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be deemed
to be "filed" for the purpose of Section 18 of the Securities Exchange Act of
1934 ("Act") or otherwise subject to the liabilities of that section of the Act
but shall be subject to all other provisions of the Act (however, see the
Notes).
POTENTIAL PERSONS WHO ARE TO RESPOND TO THE COLLECTION OF INFORMATION CONTAINED
IN THIS FORM ARE NOT REQUIRED TO RESPOND UNLESS THE FORM DISPLAYS A CURRENTLY
VALID OMB CONTROL NUMBER.
SEC 1746 (3-00)
SCHEDULE 13D
------------------ --------------------
CUSIP NO. 13 D PAGE 2 OF 22 PAGES
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
1 NAME OF REPORTING PERSON
I.R.S. IDENTIFICATION NO. OF ABOVE PERSON (ENTITIES ONLY)
PPM America Special Investments Fund, L.P.
--------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) |_|
(b) |X|
--------------------------------------------------------------------------------
3 SEC USE ONLY
--------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
OO
--------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEM 2(d) OR 2(e) :
--------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
--------------------------------------------------------------------------------
NUMBER OF 7 SOLE VOTING POWER
None.
SHARES
-------------------------------------------------
8 SHARED VOTING POWER
BENEFICIALLY 10,522,770 shares
-------------------------------------------------
OWNED BY 9 SOLE DISPOSITIVE POWER
None.
EACH
REPORTING PERSON
-------------------------------------------------
10 SHARED DISPOSITIVE POWER
WITH 10,522,770 shares
--------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
10,522,770 shares
--------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
[ ]
--------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
16.90%
--------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
PN
--------------------------------------------------------------------------------
Page 2 of 22
SCHEDULE 13D
------------------ --------------------
CUSIP NO. 13 D PAGE 3 OF 22 PAGES
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
1 NAME OF REPORTING PERSON
I.R.S. IDENTIFICATION NO. OF ABOVE PERSON (ENTITIES ONLY)
PPM America Fund Management GP, Inc.
--------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [ ]
(b) [X]
--------------------------------------------------------------------------------
3 SEC USE ONLY
--------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
OO
--------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEM 2(d) OR 2(e) :
--------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
--------------------------------------------------------------------------------
NUMBER OF 7 SOLE VOTING POWER
None.
SHARES
-------------------------------------------------
8 SHARED VOTING POWER
BENEFICIALLY 10,522,770 shares (1)
-------------------------------------------------
OWNED BY 9 SOLE DISPOSITIVE POWER
None.
EACH
REPORTING PERSON
-------------------------------------------------
10 SHARED DISPOSITIVE POWER
WITH 10,522,770 shares (1)
--------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
10,522,770 shares (1)
--------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
[ ]
--------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
16.90%
--------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
CO
--------------------------------------------------------------------------------
(1) All of the shares of Darling International Inc. common stock covered by this
report are owned beneficially by PPM America Special Investments Fund, L.P.
("SIF I"), and none are owned directly or indirectly by PPM America Fund
Management GP, Inc. ("SIF I GP"). SIF I GP is the general partner of SIF I. As
permitted by Rule 13d-4, the filing of this statement shall not be construed as
an admission that SIF I GP is the beneficial owner of any of the securities
covered by this statement.
Page 3 of 22
SCHEDULE 13D
------------------ --------------------
CUSIP NO. 13 D PAGE 4 OF 22 PAGES
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
1 NAME OF REPORTING PERSON
I.R.S. IDENTIFICATION NO. OF ABOVE PERSON (ENTITIES ONLY)
PPM America Special Investments CBO II, L.P.
--------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [ ]
(b) |X|
--------------------------------------------------------------------------------
3 SEC USE ONLY
--------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
OO
--------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEM 2(d) OR 2(e) :
--------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
--------------------------------------------------------------------------------
NUMBER OF 7 SOLE VOTING POWER
None.
SHARES
-------------------------------------------------
8 SHARED VOTING POWER
BENEFICIALLY 6,659,897 shares
-------------------------------------------------
OWNED BY 9 SOLE DISPOSITIVE POWER
None.
EACH
REPORTING PERSON
-------------------------------------------------
10 SHARED DISPOSITIVE POWER
WITH 6,659,897 shares
--------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
6,659,897 shares
--------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
[ ]
--------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
10.69%
--------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
PN
--------------------------------------------------------------------------------
Page 4 of 22
SCHEDULE 13D
------------------ --------------------
CUSIP NO. 13 D PAGE 5 OF 22 PAGES
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
1 NAME OF REPORTING PERSON
I.R.S. IDENTIFICATION NO. OF ABOVE PERSON (ENTITIES ONLY)
PPM America CBO II Management Company
--------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [ ]
(b) [X]
--------------------------------------------------------------------------------
3 SEC USE ONLY
--------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
OO
--------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEM 2(d) OR 2(e) :
--------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
--------------------------------------------------------------------------------
NUMBER OF 7 SOLE VOTING POWER
None.
SHARES
-------------------------------------------------
8 SHARED VOTING POWER
BENEFICIALLY 6,659,897 shares (2)
-------------------------------------------------
OWNED BY 9 SOLE DISPOSITIVE POWER
None.
EACH
REPORTING PERSON
-------------------------------------------------
10 SHARED DISPOSITIVE POWER
WITH 6,659,897 shares (2)
--------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
6,659,897 shares (2)
--------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
[ ]
--------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
10.69%
--------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
PN
--------------------------------------------------------------------------------
(2) All of the shares of Darling International Inc. common stock covered by this
report are owned beneficially by PPM America Special Investments CBO II, L.P.
("CBO II"), and none are owned directly or indirectly by PPM America CBO II
Management Company ("CBO II GP"). CBO II GP is the general partner of CBO II. As
permitted by Rule 13d-4, the filing of this statement shall not be construed as
an admission that CBO II GP is the beneficial owner of any of the securities
covered by this statement.
Page 5 of 22
SCHEDULE 13D
------------------ --------------------
CUSIP NO. 13 D PAGE 6 OF 22 PAGES
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
1 NAME OF REPORTING PERSON
I.R.S. IDENTIFICATION NO. OF ABOVE PERSON (ENTITIES ONLY)
PPM MGP (Bermuda), Ltd.
--------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [ ]
(b) [X]
--------------------------------------------------------------------------------
3 SEC USE ONLY
--------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
OO
--------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEM 2(d) OR 2(e) :
--------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Bermuda
--------------------------------------------------------------------------------
NUMBER OF 7 SOLE VOTING POWER
None.
SHARES
-------------------------------------------------
8 SHARED VOTING POWER
BENEFICIALLY 7,379,837 shares (3)
-------------------------------------------------
OWNED BY 9 SOLE DISPOSITIVE POWER
None.
EACH
REPORTING PERSON
-------------------------------------------------
10 SHARED DISPOSITIVE POWER
WITH 7,379,837 shares (3)
--------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
7,379,837 shares (3)
--------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
[ ]
--------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
11.85%
--------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
CO
--------------------------------------------------------------------------------
(3) 719,940 shares of Darling International Inc. common stock covered by this
report are registered in the name of Daple S.A., a company incorporated with
limited liability under the laws of Luxembourg ("Daple"). PPM America, Inc. and
PPM MGP (Bermuda), Ltd. are the beneficial owners of such securities for
purposes of Rule 13D due to the fact that Daple has delegated all of its power
to vote and to acquire and dispose of such securities to PPM America, Inc.
pursuant to an Investment Advisory Agreement and to PPM MGP (Bermuda), Ltd.
pursuant to a Special Investment Management Agreement. 6,659,897 shares of
Darling International Inc. common stock covered by this report are owned
beneficially by CBO II, and none of such securities are owned directly or
indirectly by PPM MGP (Bermuda), Ltd. PPM MGP (Bermuda), Ltd. is the managing
general partner of CBO II GP. As permitted by Rule 13d-4, the filing of this
statement shall not be construed as an admission that PPM MGP (Bermuda), Ltd. is
the beneficial owner of any of the securities owned beneficially by CBO II.
Page 6 of 22
SCHEDULE 13D
------------------ --------------------
CUSIP NO. 13 D PAGE 7 OF 22 PAGES
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
1 NAME OF REPORTING PERSON
I.R.S. IDENTIFICATION NO. OF ABOVE PERSON (ENTITIES ONLY)
PPM America, Inc.
--------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [ ]
(b) [X]
--------------------------------------------------------------------------------
3 SEC USE ONLY
--------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
OO
--------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEM 2(d) OR 2(e) :
--------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
--------------------------------------------------------------------------------
NUMBER OF 7 SOLE VOTING POWER
None.
SHARES
-------------------------------------------------
8 SHARED VOTING POWER
BENEFICIALLY 17,902,607 shares (4)
-------------------------------------------------
OWNED BY 9 SOLE DISPOSITIVE POWER
None.
EACH
REPORTING PERSON
-------------------------------------------------
WITH 17,902,607 shares (4)
--------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
17,902,607 shares (4)
--------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
[ ]
--------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
28.75%
--------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
CO
--------------------------------------------------------------------------------
(4) 17,182,667 of the shares of Darling International Inc. common stock covered
by this report are owned beneficially by SIF I and CBO II, and none of such
securities are owned directly or indirectly by PPM America, Inc. PPM America,
Inc. is the investment manager/adviser of each of SIF I and CBO II. As
permitted by Rule 13d-4, the filing of this statement shall not be construed as
an admission that PPM America, Inc. is the beneficial owner of any of the
securities owned beneficially by SIF I and CBO II. 719,940 of the shares of
Darling International Inc. common stock covered by this report are registered in
the name of Daple. PPM America, Inc. and PPM MGP (Bermuda), Ltd. are the
beneficial owners of such securities for purposes of Rule 13D due to the fact
that Daple has delegated all of its power to vote and to acquire and dispose of
such securities to PPM America, Inc. pursuant to an Investment Advisory
Agreement and to PPM MGP (Bermuda), Ltd. pursuant to a Special Investment
Management Agreement.
Page 7 of 22
SCHEDULE 13D
------------------ --------------------
CUSIP NO. 13 D PAGE 8 OF 22 PAGES
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
1 NAME OF REPORTING PERSON
I.R.S. IDENTIFICATION NO. OF ABOVE PERSON (ENTITIES ONLY)
PPM Holdings, Inc.
--------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [ ]
(b) [X]
--------------------------------------------------------------------------------
3 SEC USE ONLY
--------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
OO
--------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEM 2(d) OR 2(e) :
--------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
--------------------------------------------------------------------------------
NUMBER OF 7 SOLE VOTING POWER
None.
SHARES
-------------------------------------------------
8 SHARED VOTING POWER
BENEFICIALLY 17,902,607 shares (5)
-------------------------------------------------
OWNED BY 9 SOLE DISPOSITIVE POWER
None.
EACH
REPORTING PERSON
-------------------------------------------------
WITH 17,902,607 shares (5)
--------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
17,902,607 shares (5)
--------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
|_|
--------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
28.75%
--------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
CO
--------------------------------------------------------------------------------
(5) All of the shares of Darling International Inc. common stock covered by this
report are owned beneficially by SIF I, CBO II or PPM America, Inc. and PPM MGP
(Bermuda), Ltd. Each of PPM America, Inc., PPM MGP (Bermuda), Ltd., SIF I GP and
CBO II GP are subsidiaries of PPM Holdings, Inc. As permitted by Rule 13d-4,
the filing of this statement shall not be construed as an admission
that PPM Holdings, Inc. is the beneficial owner of any of the securities covered
by this statement.
*SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7
(INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION.
Page 8 of 22
Item 1. SECURITY AND ISSUER.
This statement relates to the common stock (the "Common Stock"), $0.01
par value per share, of Darling International Inc., a Delaware corporation
("Darling"). Darling's principal executive offices are located at 251 O'Connor
Ridge Blvd., Suite 300, Irving, Texas 75038.
Item 2. IDENTITY AND BACKGROUND.
(1) PPM America Special Investments Fund, L.P. ("SIF I")
(2) PPM America Fund Management GP, Inc. ("SIF I GP")
(3) PPM America Special Investments CBO II, L.P. ("CBO II")
(4) PPM America CBO II Management Company ("CBO II GP")
(5) PPM MGP (Bermuda), Ltd. ("PPM Bermuda")
(6) PPM America, Inc. ("PPM America")
(7) PPM Holdings, Inc. ("Holdings")
Collectively referred to hereinafter as the "Reporting Persons."
Each of SIF I, SIF I GP, CBO II, CBO II GP, PPM America and Holdings is
organized under the laws of the State of Delaware. PPM Bermuda is organized
under the laws of Bermuda. SIF I and CBO II are investment funds. SIF I GP
serves as the managing general partner of SIF I. CBO II GP serves as the general
partner of CBO II. PPM Bermuda is the managing general partner of CBO II GP. PPM
America serves as investment manager/adviser to each of SIF I and CBO II. PPM
America also serves as investment adviser to Daple S.A., a company incorporated
with limited liability under the laws of Luxembourg ("Daple") and PPM Bermuda
serves as special investment manager to Daple. PPM America and PPM Bermuda are
the beneficial owners of securities held by Daple for purposes of Rule 13D due
to the fact that Daple has delegated to them all of its power to vote and to
acquire and dispose of securities. The principal business of PPM America is
performing investment advisory services for clients. The principal business of
Holdings is acting as a holding company for ownership interests in a variety of
entities engaged in, among other things, the investment advisory services
businesses.
The address for SIF I, SIF I GP, CBO II, and CBO II GP is:
225 West Wacker Drive
Suite 975
Chicago, Illinois 60606
The address for PPM America and Holdings is:
225 West Wacker Drive
Suite 1200
Chicago, Illinois 60606
Page 9 of 22
The address for PPM Bermuda is:
Clarendon House
2 Church Street
Hamilton HM 11
Bermuda
The directors and officers of SIF I GP are as follows:
DIRECTORS: OFFICERS:
Leandra R. Knes Leandra R. Knes (President)
Bruce Gorchow Mark Mandich (Executive V.P.)
Mark B. Mandich Lori C. Seegers (Secretary)
Charles Macaluso Mark B. Mandich (Treasurer)
Michael Salvati Stuart J. Lissner (Assistant Secretary)
Grant Davidson (2nd Assistant Secretary)
Michael Salvati (3rd Assistant Secretary)
Brian Schinderle (Senior Vice President)
Kenneth Schlemmel (Senior Vice President)
Stuart J. Lissner (Vice President)
Grant Davidson is a citizen of the United Kingdom and a United States resident.
All of the other directors and officers of SIF I GP are United States citizens.
The officers and directors of PPM Bermuda are as follows:
DIRECTORS: OFFICERS:
Leandra R. Knes Leandra R. Knes (President)
Bruce Gorchow Mark B. Mandich (Executive V.P.)
Mark B. Mandich Michael Ashford (Secretary)
Charles Macaluso Mark B. Mandich (Treasurer)
James Macdonald Stuart J. Lissner (Assistant Secretary)
John Collis Lori C. Seegers (Assistant Secretary)
Donald Maclolm Brian Schinderle (Senior Vice President)
Brian Schinderle (Alternate) Kenneth Schlemmel (Senior Vice President)
Kenneth Schlemmel (Alternate) Stuart J. Lissner (Vice President)
Charles Collis (Alternate)
Page 10 of 22
All of the directors and officers of PPM Bermuda other than Messrs. Macdonald,
John Collis, Malcolm and Ashford are United States citizens. Messrs. Macdonald,
John Collis, Malcolm and Ashford are citizens of Bermuda.
The special general partner of CBO II GP is PPM America Executive Employee II,
L.L.C. ("PPM AEE"). The manager of PPM AEE is Holdings.
The directors and officers of PPM America are as follows:
DIRECTORS: OFFICERS:
Leandra R. Knes Leandra R. Knes (President and Chief Executive
Officer)
Mark B. Mandich Mark B. Mandich (Chief Operating Officer,
Executive V.P. and Treasurer)
Bruce Gorchow Lori C. Seegers (Senior Vice President, General
Counsel and Secretary)
Grant Davidson (Assistant Secretary)
Wes Wetherell (Assistant Secretary)
Rich Brody (Executive Vice President)
Michael DiRe (Executive Vice President)
Bruce Gorchow (Executive Vice President)
Brion Johnson (Executive Vice President)
Robert Flowers (Executive Vice President)
Jim Young (Executive Vice President)
David Zachar (Executive Vice President)
Brian Schinderle (Senior Vice President)
Ken Schlemmel (Senior Vice President)
Joel Klein (Senior Vice President)
Grant Davidson is a citizen of the United Kingdom and a United States resident.
All of the other directors and officers of PPM America are United States
citizens.
Page 11 of 22
The directors and officers of Holdings are as follows:
DIRECTORS: OFFICERS:
Leandra R. Knes Leandra R. Knes (President and Chief Executive
Officer)
Mark B. Mandich Mark B. Mandich (Chief Operating Officer and
Executive Vice President)
Bruce Gorchow Lori C. Seegers (Secretary, Senior Vice President
and General Counsel)
Grant Davidson (Assistant Secretary)
Wes Wetherell (Assistant Secretary)
Grant Davidson is a citizen of the United Kingdom and a United States resident.
All of the other directors and officers of Holdings are United States citizens.
No disclosure under Item 2(d) or 2(e) is required with respect to any of the
above-named persons.
PPM America and PPM Bermuda are each 100% owned by Holdings. Holdings' sole
stockholder is Brooke Holdings, Inc., a Delaware corporation, which is itself
wholly owned by Holborn Delaware Partnership ("Holborn"). The partners of
Holborn are Prudential One Limited ("POL") (80% Partnership Interest),
Prudential Two Limited (10% Partnership Interest) and Prudential Three Limited
(10% Partnership Interest). The sole stockholder of POL is Prudential
Corporation Holdings Limited ("Prudential Holdings"). Prudential plc, a UK
public limited company ("Prudential"), is the sole shareholder of Prudential
Holdings and the ultimate parent of PPM America.
The principal business of Prudential is acting as a holding company for
ownership interests in a variety of entities engaged in financial services,
which includes certain distinct specialized business units that are
independently operated, including that of Holdings and its subsidiaries.
Prudential, for purposes of the federal securities laws, ultimately controls
Holdings and its subsidiaries. Prudential, its executive officers and directors,
and its direct and indirect subsidiaries (including all of its business units
except that consisting of Holdings and its subsidiaries), may beneficially own
securities of Darling International, Inc., although PPM America has made
reasonable inquiry which has indicated no such ownership of such securities.
With respect to the securities of some issuers, PPM America serves as investment
adviser to certain Prudential subsidiaries, and in such cases, PPM America
includes such Prudential subsidiaries' beneficial ownership of such securities
with its own when required to report pursuant to Section 13 of the Securities
Exchange Act of 1934, as amended. Where PPM America does not advise a Prudential
subsidiary with respect to securities of an issuer, as is the case with the
securities of Darling International, Inc., Holdings and its subsidiaries
disclaim beneficial ownership of such securities, if any, beneficially owned by
Prudential, its executive officers and directors, and those direct and indirect
subsidiaries of Prudential as to which PPM America does not provide advice
(including all of Prudential's other business units except that consisting of
Holdings, its subsidiaries and those Prudential subsidiaries advised by PPM
America) in reliance on Exchange Act Release No. 34-39538 (January 12, 1998) due
to the separate management and independent operation of the reporting persons.
Page 12 of 22
Item 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
As more fully described in Item 4 below, SIF I, CBO II and Daple were
lenders under that certain Amended and Restated Credit Agreement (the "Existing
Credit Agreement"), dated as of January 22, 1999, among Darling International
Inc. ("Darling"), BankBoston, N.A., Comerica Bank, Credit Lyonnais New York
Branch, and Wells Fargo Bank (Texas), National Association as Co-agents, and
other lenders from time to time party thereto (the "Lenders"), pursuant to which
SIF I, CBO II and Daple were the holders of notes representing commitments in an
aggregate principal amount of $28,500,758.15, $18,038,228.41 and $1,949,945.44,
respectively (the "Commitments"). Pursuant to the Recapitalization Agreement (as
defined below), the aggregate principal amount of loans outstanding under each
of SIF I, CBO II and Daple's Commitments (the "Loans") were exchanged for
10,522,770, 6,659,897 and 719,940 shares respectively of Darling Common Stock
(which collectively represents 28.75% of the outstanding Common Stock), 22,531,
14,259 and 1,541 shares respectively of Darling Series A Preferred Stock, and
term and revolving loan commitments under the New Credit Agreement (as defined
below) in an aggregate principal amount respectively of $17,652,446,
$11,172,294 and $1,207,733. All of the funds required for the initial
purchase of the Loans were obtained from general funds available to SIF I, CBO
II and Daple for investment purposes.
Item 4. PURPOSE OF TRANSACTION.
BACKGROUND
On June 30, 2001, the Existing Credit Agreement matured, at which time
Darling defaulted on its obligation to pay approximately $125.5 million of
principal and interest to the Lenders. On June 29, 2001, the Lenders under the
Existing Credit Agreement entered into a forbearance agreement (the "Forbearance
Agreement") with Darling in which the Lenders agreed not to enforce their
remedies and to continue to continue to make revolving loans to Darling. During
the period from June 2001 until March 2002, the lenders under the Existing
Credit Agreement entered into several amendments to the Forbearance Agreement.
On March 15, 2002, the Lenders entered into a Recapitalization
Agreement (the "Recapitalization Agreement") with Darling which set forth,
together with certain subsequent amendments thereto, the terms and conditions of
the recapitalization of Darling (the "Recapitalization"). Pursuant to the
Recapitalization Agreement, on May 13, 2002 (the "Consummation Date"), (i) the
Lenders amended and restated the Existing Credit Agreement (as so amended and
restated, the "New Credit Agreement") to provide for a $68.25 million term loan
and a revolving credit facility of $10.1 million for working capital loans and
letters of credit, which revolving credit facility may be increased by up to $8
million with a corresponding decrease in the term loan by an equivalent amount
under certain circumstances, (ii) Darling amended its certificate of
incorporation in order to increase the number of authorized shares of its Common
Stock from 25 million to 100 million and to grant to the Lenders preemptive
rights to purchase Common Stock issued in the future, (iii) Darling issued
approximately 46.7 million shares of Common Stock and approximately 100,000
shares of a newly created 6% cumulative redeemable Series A Preferred Stock with
a liquidation preference of $100 per share in exchange for the cancellation of
an aggregate of approximately $66.3 million of indebtedness owed by Darling
under the Existing Credit Agreement, and (iv) five directors (three of whom were
Page 13 of 22
designated by the Lenders)1 began serving terms until the 2003 annual meeting of
Darling shareholders.
THE COMMON STOCK
Pursuant to the Recapitalization Agreement, Darling issued to the
Lenders approximately 46.7 million shares of Common Stock, with the exact number
having been determined such that the Lenders collectively own 75% of the issued
and outstanding Common Stock as of the Consummation Date. The remaining
authorized but unissued shares of Common Stock, along with other currently
existing authorized and unissued shares of Common Stock, will be available for
any future private or public offerings to raise capital, potential acquisitions,
issuance upon exercise of the stock options granted under stock option plans,
conversion of convertible preferred stock, if and when issued, and other
legitimate corporate purposes. The issuance of the Common Stock to the Lenders
could effectively deter a third party from making an offer to acquire Darling.
The Common Stock issued to the Lenders has been listed on the American Stock
Exchange.
THE SERIES A PREFERRED STOCK
Pursuant to the Recapitalization Agreement, Darling issued
approximately 100,000 shares of Series A Preferred Stock to the Lenders. The
Series A Stock ranks senior (with respect to liquidation payments) to the Common
Stock and any preferred stock issued by Darling in the future. Upon any
liquidation, dissolution or winding up of Darling, each holder of Series A
Preferred Stock will be entitled to be paid, before any distribution or payment
is made to the holders of Common Stock, the sum of original issue price of $100
per share plus accumulated dividends and accrued and unpaid dividends not yet
accumulated. Darling is prohibited from issuing any other preferred stock with a
liquidation preference equal to or greater than the Series A Preferred Stock.
Dividends on the Series A Preferred Stock will accumulate at a rate of
6% per annum, will be cumulative from the issue date, whether or not declared,
will accrue semi-annually and may be either paid in cash or accumulated, at
Darling's election. If accumulated, the dividends will be added to the original
issue price, and dividends will thereafter accrue on the original issue price as
so adjusted. The New Credit Agreement prohibits Darling from paying dividends in
cash so long as any indebtedness or commitments remain outstanding under the
revolving or term loans.
The Series A Preferred Stock is not convertible into Common Stock.
The Series A Preferred Stock is mandatorily redeemable upon the
earliest to occur of: (i) a change of control, (ii) a sale of all or
substantially all consolidated assets, (iii) a dissolution or liquidation, or
(iv) the fifth anniversary of the Consummation Date, to the extent of legally
available funds, at a redemption price equal to the aggregate original issue
price of the shares to be redeemed, plus accumulated dividends and accrued and
unpaid dividends not yet accumulated
--------
1 The directors are O. Thomas Albrecht, Charles Macaluso, Richard A. Peterson,
Denis J. Taura and Fredric J. Klink. Messrs. Albrecht, Macaluso and Peterson
were designated by the Lenders.
Page 14 of 22
to the date of redemption. For purposes of the mandatory redemption provisions
of the Series A Preferred Stock, a change of control shall be deemed to occur
when: (i) any "person" (as such term is used in Section 13(d) of the Securities
Exchange Act of 1934, as amended), other than the Lenders and their respective
affiliates, individually or as a group, becomes a "beneficial owner" (as such
term is defined in Rule 13d-3 and Rule 13d-5 under the Exchange Act), directly
or indirectly, of more than 50% of the total voting power of the outstanding
capital stock of Darling, (ii) the first day on which a majority of the members
of the Board of Directors are not "continuing directors" (defined as any member
who (x) was a member of the Board of Directors on the date of issuance of the
Series A Preferred Stock, (y) was nominated for election by the Lenders in
accordance with the Recapitalization Agreement, or (z) was nominated or elected
by a majority of the continuing directors who were members at the time of such
nomination or election), or (iii) Darling consolidates with, or merges with or
into, any person or entity or any person or entity consolidates with, or merges
with or into, Darling, pursuant to a transaction in which any Darling
outstanding voting capital stock is converted into or exchanged for cash,
securities or other property. The mandatory redemption provisions relating to a
change of control could deter a third party from making an offer to acquire
Darling and could otherwise prevent changes in control or management.
Subject to the prior payment in full of all indebtedness under the
revolving and term loans under the New Credit Agreement, Darling may redeem
shares of Series A Preferred Stock in multiples of not less than $1 million at
any time, upon 30 days notice, at a redemption price equal to the sum of the
aggregate original issue price of the shares to be redeemed, plus accumulated
dividends and accrued and unpaid dividends not yet accumulated to the date of
redemption. If less than all shares of Series A Preferred Stock are to be
redeemed, they are required to be redeemed pro-rata based on the number of
shares of Series A Preferred Stock owned.
Except as required by the Delaware General Corporation Law, the Series
A Preferred Stock is non-voting.
So long as the Series A Preferred Stock remains outstanding, Darling
will not be permitted to take any of the following actions without the prior
written consent of the holders of 66 2/3% of the then outstanding Series A
Preferred Stock, voting separately as a class: (i) creating or issuing any class
or series of equity security of Darling that is senior or pari passu in priority
to the Series A Preferred Stock with respect to dividends, redemption,
liquidation, winding up or dissolution of Darling; (ii) modifying any securities
junior to the Series A Preferred Stock so as to become senior or pari passu in
priority to the Series A Preferred Stock with respect to dividends, redemption,
liquidation, winding up or dissolution of Darling; (iii) declaring, paying or
making any dividends or other distributions on any securities junior to the
Series A Preferred Stock (other than dividends declared in connection with any
stock splits, stock dividends, share combinations, share exchanges or other
recapitalizations in which such dividends are made in the form of securities
junior to the Series A Preferred Stock); (iv) directly or indirectly redeeming,
retiring, repurchasing or otherwise acquiring any shares of Series A Preferred
Stock (except to the extent allowed or required by a mandatory or optional
redemption as described above) or any securities junior to the Series A
Preferred Stock (or authorizing or allowing any of Darling's subsidiaries to do
so); (v) increasing the number of shares constituting the Series A Preferred
Stock from the number of shares established by the certificate of
Page 15 of 22
designation or taking any action that adversely alters or changes the rights,
preferences, or privileges of the Series A Preferred Stock; and (vi) creating or
issuing any class or series of equity security of Darling (x) that is subject to
mandatory redemption, in whole or in part, by Darling while any shares of Series
A Preferred Stock are outstanding (whether or not such redemption is contingent
on the occurrence of any event or circumstance) or (y) the terms of which
provide for protective covenants or provisions more restrictive or onerous upon
Darling than the covenants and provisions established in favor of the Series A
Preferred Stock.
PREEMPTIVE RIGHTS
The amendments to Darling's certificate of incorporation provide
preemptive rights to the Lenders as set forth in paragraphs (1) through (6)
below.
(1) If Darling issues any additional shares of Common Stock following
the Consummation Date, except as provided in paragraphs (4) and (5) below, each
Lender will have the right, but not the obligation, to purchase additional
shares of Common Stock up to an amount sufficient to permit such Lender to
maintain its percentage equity interest in Darling (based on the Common Share
Ratio (as defined below) held by such Lender) at the level existing immediately
prior to the issuance of the additional shares of Common Stock. If Darling
desires to issue additional shares of Common Stock, it must first give notice
thereof to each Lender stating the number of additional shares of Common Stock
proposed to be issued and the total consideration to be received upon issuance
of the additional shares of Common Stock. Within 30 days after the receipt of
such notice, each Lender may elect to exercise its preemptive rights by giving
Darling written notice to that effect. Failure to give such notice within that
30-day period or failure to pay at the required time the purchase price for any
additional shares of Common Stock as to which a right to purchase shall have
been exercised will constitute a waiver of the preemptive rights as to the
particular issuance of additional shares of Common Stock specified in the
notice. "Common Share Ratio" means, at any time of determination with respect to
each Lender whose percentage or ratio is to be calculated, a ratio or percentage
consisting of a numerator equal to all shares of Common Stock held by such
Lender and a denominator equal to all issued and outstanding Common Stock.
(2) The per share purchase price to be paid by each Lender upon
exercise of the preemptive rights described in paragraph (1) will be equal to
the per share consideration (net of underwriting discounts or commissions if
such Lender is not a participant in the offering) at which the additional shares
of Common Stock are offered or proposed to be offered by Darling to another
party. The total consideration for which additional shares of Common Stock are
offered or proposed to be offered will be determined as follows: (i) in case of
the proposed issuance of additional shares of Common Stock for cash, the
consideration to be received by Darling will be the amount of cash (net of
underwriting discounts or commissions if such Lender is not a participant in the
offering) for which the additional shares of Common Stock are proposed to be
issued, and (ii) in case of the proposed issuance of additional shares of Common
Stock in whole or in part for consideration other than cash, the value of the
consideration to be received by Darling other than cash (net of underwriting
discounts or commissions if such Lender is not a participant in the offering)
will be the fair market value of that consideration as determined by Darling's
Board of Directors.
Page 16 of 22
(3) If and whenever Darling issues any securities convertible into or
exchangeable or exercisable for additional shares of Common Stock or rights or
options to subscribe for or to purchase additional shares of Common Stock after
the Closing Date, except as provided in paragraph (5), each Lender will have the
right, but not the obligation, to purchase convertible securities, rights or
options of like kind up to an amount which when converted, exchanged or
exercised would be sufficient to permit such Lender to maintain its percentage
equity interest in Darling (based on the Common Share Ratio of such Lender) at
the level existing immediately prior to the issuance of the convertible
securities, rights or options. If Darling desires to issue convertible
securities, rights or options, we will first give notice thereof to each Lender
describing the convertible securities, rights or options proposed to be issued
(including the number of additional shares of Common Stock issuable upon
conversion, exchange or exercise of such convertible securities, rights or
options) and stating the total consideration to be received by Darling upon such
issuance and upon conversion, exchange or exercise. Within 30 days after the
receipt of such notice, each Lender may elect to exercise its preemptive rights
by giving written notice to Darling to that effect. Failure to give such notice
within that 30-day period or failure to pay at the required time the purchase
price for any convertible securities, rights or options as to which a right to
purchase shall have been exercised will constitute a waiver of the rights
granted as to the particular issuance of convertible securities, rights or
options specified in Darling's notice to such Lender.
(4) The purchase price to be paid by each Lender upon exercise of its
rights described in paragraph (3) will be in proportion to the consideration
proposed to be received by Darling (net of underwriting discounts or commissions
if such Lender is not a participant in the offering) upon the original issuance
to another party of convertible securities, rights or options. The amount of
consideration to be received by Darling upon the original issuance of such
convertible securities, rights or options will be determined in the manner
described in paragraph (2) above. With respect to securities convertible into or
exchangeable or exercisable for additional shares of Common Stock or rights or
options to subscribe for or purchase additional shares Common Stock, the rights
of each Lender (to the extent exercised) will apply only to the issuance of such
convertible securities, rights, or options, and Lenders will have no rights with
respect to Darling's issuance of additional shares of Common Stock upon
conversion, exchange or exercise of such convertible securities, rights or
options. If a Lender does not exercise its right to acquire such convertible
securities, rights or options, such Lender shall have the rights described in
paragraph (1) above upon conversion, exchange or exercise of such convertible
securities, rights or options.
(5) The provisions described in paragraphs (1) and (3) above will not
apply to: (i) shares of Common Stock issued as a stock dividend to holders of
Common Stock or upon any subdivision or combination of shares of Common Stock,
(ii) 3,028,065 options granted by Darling to acquire its Common Stock existing
as of the Consummation Date, (iii) options, awards, grants and other stock
rights hereafter granted to Darling's or its subsidiaries' employees, officers,
directors or consultants and approved by Darling's Board of Directors, or (iv)
shares of Common Stock issued pursuant to the options and other rights described
in clauses (ii) and (iii) above.
(6) Unless otherwise agreed by the parties, the purchase price to be
paid by the Lenders upon exercise of their preemptive rights will be paid upon
terms which are the same as
Page 17 of 22
those being offered by third party purchasers, unless those terms provide for
payment in a manner which could not be duplicated by a Lender, such as the
transfer of specific property to Darling, in which event payment by the Lender
will be in cash in an amount equal to the fair market value of such specific
property.
The preemptive rights described above will be assignable to any
transferee of the Common Stock issued to the Lenders, except: (i) transferees
who acquire such shares as purchasers in a sale made under a registration
statement that has been filed and gone effective pursuant to the Registration
Rights Agreement (as defined below), (ii) transferees who acquire their shares
in a transfer made under Rule 144 of the Securities Act or any successor rules,
and (iii) subsequent transferees of shares sold or transferred to a transferee
described in clauses (i) and (ii) of this paragraph.
REGISTRATION RIGHTS
Darling has entered into a Registration Rights Agreement (the
"Registration Rights Agreement"), with the Lenders that, among other things
obligates Darling to file within 10 days of the Consummation Date a registration
statement on Form S-1 (or any other appropriate form) covering the offer and
sale of the shares of Common Stock and Series A Preferred Stock held by the
Lenders and their permitted assignees on a delayed and continuous basis pursuant
to Rule 415 under the Securities Act. In addition, the Registration Rights
Agreement generally requires Darling to use its reasonable best efforts to have
the shelf registration declared effective no later than 60 days after the
Consummation Date and to keep the shelf registration continuously effective,
supplemented and amended, as required by the Securities Act, for a period of 5
years (subject to certain exceptions set forth in the Registration Rights
Agreement) following the date on which the shelf registration is declared
effective in order to permit the prospectus forming a part thereof to be usable
under the Securities Act by the Lenders and their permitted assignees from the
date the shelf registration is declared effective by the SEC.
Pursuant to the Registration Rights Agreement, Darling has also granted
to the Lenders and their permitted assignees certain demand and piggy-back
registration rights that will commence after the expiration of the five-year
term for effectiveness of the shelf registration.
Darling has agreed to pay all registration expenses in connection with
any registration required by the Registration Rights Agreement. Darling has also
agreed that it will not after the Consummation Date enter into any agreement
with respect to its securities which is inconsistent with the rights granted to
the Lenders and their permitted assignees under the Registration Rights
Agreement, including, without limitation, entering into any agreement which
would permit the registration of any securities to the exclusion of any portion
of the Common Stock and Series A Preferred Stock to be issued to the Lenders in
connection with the Recapitalization, unless such exclusion is first waived in
writing by the holders of more than 50% of such Common Stock and Series A
Preferred Stock then outstanding. Without limiting the generality of the
foregoing, any registration rights granted by Darling after the Consummation
Date will be required to be subordinate to the registration rights granted under
the Registration Rights Agreement, and Darling will be required to obtain the
written agreement of each person or entity to whom such other registration
rights may be granted or may become available to such effect.
Page 18 of 22
THE NEW CREDIT AGREEMENT
The New Credit Agreement provides for a total of $10.1 million of
borrowing capacity under a revolving credit facility (which may be increased by
up to $8 million with a corresponding decrease in the Term Loan by an equivalent
amount under certain circumstances) and $68.25 million of borrowings through a
Term Loan and allows Darling to continue to have its existing letters of credit
outstanding until their expiration date. In connection with the
Recapitalization, the outstanding principal of the loans in excess of $68.25
million under Darling's existing credit facility will be cancelled. In
consideration for such cancellation, Darling will issue to the Lenders
approximately 46.7 million shares of Common Stock and up to 110,000 shares of
Series A Preferred Stock.
Pursuant to the new amended and restated credit agreement, and in
connection with the Recapitalization, the Lenders have made available to Darling
under the New Credit Agreement, a revolving credit facility for loans and
letters of credit in the amount $7.75 million, subject to increase by a maximum
of $8.0 million under certain circumstances. If the revolver is so increased,
the term loan will be decreased by an equal amount. The revolver, together with
all accrued and unpaid interest thereon, will mature on the fifth anniversary of
the Consummation Date. The revolver may not be cancelled or terminated by
Darling unless the term loan has been or will be contemporaneously repaid in
full.
The revolver will share a first priority lien with the term loan on
substantially all of Darling's assets (subject only to certain permitted liens);
provided, however, that all obligations and indebtedness under the revolver will
be repaid prior to those under the term loan in the application of any payments
received after the occurrence and during the continuance of an event of default
under the New Credit Agreement.
Interest will accrue on the revolver at Darling's election at either
(i) 30, 60, or 90 day LIBOR plus 5.0% per annum, payable on the last day of each
such LIBOR interest period, or (ii) Credit Lyonnais New York Branch's Prime Rate
plus two percent 2.0% per annum, floating with an unused commitment fee of 0.50%
per annum and a facility fee of 1.50% per annum, with such prime rate interest,
unused commitment fees and facility fees being payable quarterly on the last day
of the third full calendar month occurring after the Consummation Date and the
last day of each third month thereafter and on the maturity date.
Letter of credit fees payable to the Lenders will be 3% per annum on
the face amount of each letter of credit outstanding, payable on quarterly
payment dates in arrears plus a 0.125% per annum "fronting fee" paid to Credit
Lyonnais New York Branch as Agent (for its own account) as issuer of such letter
of credit.
Borrowings under the revolver will not be convertible into Darling
capital stock.
Pursuant to the New Credit Agreement and the other recapitalization
agreements, certain advances made by the Lenders to Darling under the Existing
Credit Agreement were renewed, modified and extended as a term loan in the
principal amount of $68.25 million (after application of $750,000 of existing
cash collateral to repay loans under the Existing Credit Agreement).
The term loan, together with all accrued and unpaid interest thereon,
will mature on the
Page 19 of 22
fifth anniversary of the Consummation Date.
The term loan was fully drawn at closing, with the principal balance
thereof being repaid in installments due quarterly on the last day of each third
full calendar month occurring after the Consummation Date: (i) $300,000 will be
due on each of the first eight quarterly payment dates, and (ii) $1,200,000 will
be due on each quarterly payment date thereafter, with a final payment in the
amount of the entire remaining principal balance and all accrued and unpaid
interest thereon being due and payable on the maturity date. In addition, to the
regularly scheduled principal and interest payments, Darling will make
additional payments on the term loan to the extent of (i) 25% for 2002, (ii) 35%
for 2003, and (iii) 50% for each year thereafter of excess cash flow (defined
generally as EBITDA, less scheduled principal and interest payments on the
Revolver and the Term Loan and permitted capital leases, plus or minus as
applicable, any changes in adjusted working capital, less cash taxes paid, less
any required payments made under non-compete agreements, less permitted capital
expenditures up to $10,800,000 for 2002 (increasing by 5% per year thereafter)),
which shall be calculated and due annually, such payments to be applied in
inverse order of maturity.
The term loan will share a first priority lien with the revolver on
substantially all of Darling's assets (with the exception that all obligations
and indebtedness under the revolver will be repaid prior to those under the term
loan in the application of any payments received after the occurrence and during
the continuance of an event of default under the New Credit Agreement).
The term loan will bear interest at Darling's election at either (i)
30, 60, or 90 day LIBOR plus 5.0% per annum, payable on the last day of each
such LIBOR interest period, or (ii) the Credit Lyonnais New York Branch's prime
rate plus 2.0% per annum, floating, payable quarterly and on the maturity date.
Borrowings under the term loan will not be convertible into Darling
capital stock.
Except as set forth in this Item 4, the Reporting Persons have no plans
or proposals that relate to or would result in any of the matters set forth in
clauses (a) through (j) of Item 4 of Schedule 13D.
Item 5. INTEREST IN SECURITIES OF THE ISSUER.
(a)
---------------------------- --------------------------- -----------------------
Number of Shares of Common
Entity Stock Percent of Class
---------------------------- --------------------------- -----------------------
SIF I 10,522,770 16.90
---------------------------- --------------------------- -----------------------
SIF I GP 10,522,770 16.90
---------------------------- --------------------------- -----------------------
CBO II 6,659,897 10.69
---------------------------- --------------------------- -----------------------
CBO II GP 6,659,897 10.69
---------------------------- --------------------------- -----------------------
PPM Bermuda 7,379,837 11.85
---------------------------- --------------------------- -----------------------
PPM America 17,902,607 28.75
---------------------------- --------------------------- -----------------------
Holdings 17,902,607 28.75
---------------------------------------- -------------------------------------- --------------------------------------
Page 20 of 22
(b)
------------- --------------- -------------- ------------------ ----------------
Entity Sole Voting Shared Voting Sole Dispositive Shared
Power Power Power Dispositive
Power
------------- --------------- -------------- ------------------ ----------------
SIF I 0 10,522,770 0 10,522,770
------------- --------------- -------------- ------------------ ----------------
SIF I GP 0 10,522,770 0 10,522,770
------------- --------------- -------------- ------------------ ----------------
CBO II 0 6,659,897 0 6,659,897
------------- --------------- -------------- ------------------ ----------------
CBO II GP 0 6,659,897 0 6,659,897
------------- --------------- -------------- ------------------ ----------------
PPM Bermuda 0 7,379,837 0 7,379,837
------------- --------------- -------------- ------------------ ----------------
PPM America 0 17,902,607 0 17,902,607
------------- --------------- -------------- ------------------ ----------------
Holdings 0 17,902,607 0 17,902,607
------------- --------------- -------------- ------------------ ----------------
(c) To the best knowledge of the Reporting Persons, no executive
officer or director of the Reporting Persons beneficially owns any shares of
Darling Common Stock. Except as described above, there have been no transactions
in Darling Common Stock by the Reporting Persons, or, to the best knowledge of
the Reporting Persons, by any of the Reporting Persons' executive officers or
directors during the past 60 days.
(d) Not applicable.
(e) Not applicable.
Item 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDING OR RELATIONSHIPS WITH
RESPECT TO SECURITIES OF THE ISSUER.
Except as set forth in Items 3, 4, 5 and 6, neither the Reporting
Persons nor, to the best knowledge of the Reporting Persons, any of their
directors or executive officers, has any contracts, arrangements, understanding
or relationships (legal or otherwise) with any other person with respect to any
securities of Darling.
Item 7. MATERIAL TO BE FILED AS EXHIBITS.
Exhibit 1: Recapitalization Agreement, dated March 15, 2002, by and among
Darling and each of the banks or other lending institutions which is a signatory
thereto or any successor or assignee thereof (individually, a "Bank" and
collectively, the "Banks"), and Credit Lyonnais New York Branch, individually as
a Bank and as agent for itself, the other Banks and other secured parties.
(Filed as Exhibit 10.19 to Darling's Annual Report on Form 10-K for the fiscal
year ended December 31, 2001.).
Exhibit 2: First Amendment to Recapitalization Agreement, dated as of April 1,
2002, among Darling, Credit Lyonnais New York Branch, as Agent, and the other
banks party to thereto. (Filed as Annex D to Darling's Definitive Proxy
Statement dated April 29, 2002).
Page 21 of 22
Exhibit 3: Second Amendment to Recapitalization Agreement, dated as of April 29,
2002, among Darling, Credit Lyonnais New York Branch, as Agent, and the other
banks party to thereto.
Exhibit 4: Certificate of Designation, Preferences and Rights of Series A
Preferred Stock of Darling. (Filed as Annex A to Darling's Definitive Proxy
Statement dated April 29, 2002).
Exhibit 5: Certificate of Amendment of Restated Certificate of Incorporation of
Darling. (Filed as Annex B to Darling's Definitive Proxy Statement dated April
29, 2002).
Exhibit 6: Registration Rights Agreement, dated as of May 10, 2002, by and among
Darling and certain other parties identified on the signature pages thereto.
Exhibit 7: Amended and Restated Credit Agreement, dated as of May 10, 2002,
among Darling, as Borrower, Credit Lyonnais New York Branch, as Agent, and the
other lenders named therein.
Page 22 of 22
SIGNATURE
After reasonable inquiry and to the best of the undersigneds' knowledge and
belief, each of the undersigned certifies that the information set forth in this
statement is true, complete and correct.
Dated: May 22, 2002
PPM AMERICA SPECIAL INVESTMENTS PPM AMERICA SPECIAL INVESTMENTS
FUND, L.P. CBO II, L.P.
By: PPM America, Inc. By: PPM America, Inc.
As Attorney-in-Fact As Attorney-in-Fact
By:/S/ BRIAN SCHINDERLE By:/S/ BRIAN SCHINDERLE
Brian Schinderle Brian Schinderle
Senior Vice President Senior Vice President
PPM AMERICA FUND MANAGEMENT PPM AMERICA, INC.
GP, INC.
By:/S/ BRIAN SCHINDERLE By:/S/ BRIAN SCHINDERLE
Brian Schinderle Brian Schinderle
Senior Vice President Senior Vice President
PPM AMERICA CBO II MANAGEMENT PPM MGP (BERMUDA), LTD.
COMPANY
By:/S/ BRIAN SCHINDERLE
By: PPM MGP (Bermuda), Ltd. Brian Schinderle
Its: Managing General Partner Senior Vice President
By:/S/ BRIAN SCHINDERLE
Brian Schinderle
Senior Vice President
PPM HOLDINGS, INC.
By:/S/ MARK MANDICH
Mark Mandich
Chief Operating Officer and Executive Vice
President
Page S-1
The original statement shall be signed by each person on whose behalf
the statement is filed or his authorized representative. If the statement is
signed on behalf of a person by his authorized representative (other than an
executive officer or general partner of this filing person), evidence of the
representative's authority to sign on behalf of such person shall be riled with
the statement, provided, however, that a power of attorney for this purpose
which is already on file with the Commission may be incorporated by reference.
The name and any title of each person who signs the statement shall be typed or
printed beneath his signature.
Attention: Intentional misstatements or omissions of fact constitute
Federal criminal violations (See 18 U.S.C. 1001).