kii8k032009.htm
UNITED
STATES
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 the earliest event reported)
March
20, 2009
Kronos
International, Inc.
(Exact
name of registrant as specified in its charter)
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Delaware
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333-100047
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22-2949593
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(State
or other jurisdiction of incorporation)
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(Commission
File
Number)
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(IRS
Employer
Identification
No.)
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5430
LBJ Freeway, Suite 1700, Dallas, Texas
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75240-2697
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(Address
of principal executive offices)
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(Zip
Code)
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Registrant’s
telephone number, including area code
(972)
233-1700
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(Former
name or former address, if changed since last report.)
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Check the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions (see General Instruction A.2):
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o
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Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
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¨
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Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
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Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
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¨
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Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
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As
previously disclosed, certain operating subsidiaries of the registrant, namely
Kronos Titan GmbH, Kronos Europe S.A./N.V., Kronos Titan AS, Kronos Norge AS,
Titania AS and Kronos Denmark ApS (collectively, the “Borrowers”), are parties to a
Facility Agreement dated June 25, 2002, as most recently amended on May 26,
2008, with Deutsche Bank AG, as mandated lead arranger, Deutsche Bank Luxembourg
S.A., as agent, and the lenders (collectively, the “Lenders”) participating in
the facility (the “Amended
Revolving Credit Facility”). The Amended Revolving Credit
Facility matures on May 26, 2011. Borrowings under the Amended
Revolving Credit Facility bear interest at the applicable interbank market rate
plus 1.75%. The Amended Revolving Credit Facility is collateralized
by the accounts receivable and the inventories of the Borrowers and a limited
pledge of all of the other assets of Kronos Europe S.A./N.V. The
Amended Revolving Credit Facility contains representations, warranties and
covenants customary in lending transactions of this type. The
foregoing summary of the Amended Revolving Credit Facility is qualified in its
entirety to the actual terms of the Amended Revolving Credit Facility in
Schedule 2 to Exhibit 10.1 to the Current Report on Form 8-K the registrant
filed with the U.S. Securities and Exchange Commission (the “SEC”) on May 29, 2008, which
terms are incorporated herein by this reference.
On March
20, 2009, the Lenders waived compliance with the required financial ratio of the
Borrowers’ net secured debt to earnings before income taxes, interest and
depreciation, as defined in the Amended Revolving Credit Facility (the “Debt Ratio”), for the
12-month period ending March 31, 2009. Among other things, the waiver
moved the next required Debt Ratio measurement period to the 12-month period
ending April 30, 2009. The Borrowers did not pay any fee to the
Lenders to obtain the waiver.
As
disclosed in the registrant’s Annual Report on Form 10-K for the year ended
December 31, 2008 the registrant filed with the SEC effective March 12, 2009
(the “2008 Form 10-K”),
the Borrowers have begun discussions with the Lenders to amend the terms of the
Amended Revolving Credit Facility to eliminate, among other things, the
requirements that the Borrowers maintain certain financial ratios, including the
Debt Ratio. While the registrant believes it is possible that an
amendment may be obtained, there is no assurance that such amendment will be
obtained, or if obtained that the requirement to maintain certain financial
ratios the registrant would like to eliminate would be
eliminated. Any such amendment, or future waiver if such an amendment
cannot be obtained, could increase the Borrowers’ future borrowing costs, either
from a requirement that the Borrowers pay a higher rate of interest on
outstanding borrowings or pay a fee to the Lenders as part of agreeing to such
amendment or future waiver.
In the
event the Borrowers are not successful in obtaining the amendment or a future
waiver of the Amended Revolving Credit Facility to eliminate the requirement to
maintain the Debt Ratio financial covenant, the Borrowers would seek to
refinance such facility with a new group of lenders with terms that would not
include the Debt Ratio financial covenant or, if required, the Borrowers will
use their existing liquidity resources (which could include funds provided by
affiliates of the Borrowers). While there is no assurance that the
Borrowers would be able to refinance the Amended Revolving Credit Facility with
a new group of lenders, the registrant believes these other sources of liquidity
available to the Borrowers would allow them to refinance the Amended Revolving
Credit Facility. If required, the registrant believes by undertaking
one or more of these steps the Borrowers will be successful in maintaining
sufficient liquidity to meet the registrant’s future obligations including
operations, capital expenditures and debt service for the next 12
months.
This
current report includes forward-looking statements within the meaning of the
Private Securities Litigation Reform Act of 1995, including, but not limited to,
statements concerning the registrant’s ability to obtain future amendments to,
waivers to certain requirements of, or refinancing of the Amended Revolving
Credit Facility. Any statement in this report that is not a statement
of historical fact may be deemed to be a forward-looking
statement. Although the registrant believes the expectations
reflected in such forward-looking statements are reasonable, it cannot give
assurances that these expectations will prove to be correct. Such
statements by their nature involve substantial risks and uncertainties that
could significantly impact expected results. It is not possible to
identify all of the risks and uncertainties the registrant faces that could
cause actual results to differ materially from those described in this
report. These risks and uncertainties include without limitation, the
future conditions in the credit markets, the results of negotiations with the
Lenders, the future liquidity of the registrant and its affiliates and the
significant risk factors set forth in the 2008 Form 10-K. Should one
or more of these risks materialize (or the consequences of such a development
worsen), or should the underlying assumptions prove incorrect, actual results
could differ materially from those expected. The registrant disclaims
any intention or obligation to update or revise any forward-looking statements
whether as a result of changes in information, future events or
otherwise.
Item
9.01 Financial
Statements and Exhibits.
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(d)
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Exhibits
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10.1
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Third
Amendment Agreement Relating to a Facility Agreement dated June 25, 2002
executed as of May 26, 2008 by and among Deutsche Bank AG, as mandated
lead arranger, Deutsche Bank Luxembourg S.A., as agent, the participating
lenders, Kronos Titan GmbH, Kronos Europe S.A./N.V, Kronos Titan AS,
Kronos Norge AS, Titania AS and Kronos Denmark ApS — including Schedule 2:
Euro 80,000,000 Facility Agreement dated June 25, 2002, as amended by
an Amendment Agreement dated September 3, 2004, a Second Amendment
Agreement dated June 14 , 2005 and a Third Amendment Agreement dated May
26, 2008 among Kronos Titan GmbH & Co. OHG, Kronos Europe S.A./N.V.,
Kronos Titan AS and Titania AS, as Borrowers, Kronos Titan GmbH & Co.
OHG, Kronos Europe S.A./N.V. and Kronos Norge AS, as guarantors, Kronos
Denmark APS, as security provider, Deutsche Bank AG, as mandated lead
arranger, Deutsche Bank Luxembourg S.A., as agent and security agent, and
KBC Bank NV, as fronting bank, and others (incorporated by reference to
Exhibit 10.1 to the Current Report in Form 8-K that Kronos International,
Inc. (Commission File No. 333-100047) filed with the U.S. Securities and
Exchange Commission on May 29,
2008).
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SIGNATURE
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.
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Kronos
International, Inc.
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(Registrant)
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By: /s/ John A. St. Wrba
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Date: March
26, 2008
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John
A. St. Wrba
Vice
President and Treasurer
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