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)
April
29, 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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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.
As
previously disclosed in the registrant’s Current Report on Form 8-K filed with
the SEC on March 26, 2009, 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, such
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 this waiver.
On April
29, 2009, a majority of the Lenders waived compliance with the Debt Ratio (and
on April 30, 2009 all of the Lenders waived such compliance) for the 12-month
period ending April 30, 2009. Among other things, this waiver moved
the next required Debt Ratio measurement period to the 12-month period ending
June 15, 2009. The Borrowers did not pay any fee to the Lenders to
obtain this second waiver.
As
disclosed in the registrant’s Annual Report on Form 10-K for the year ended
December 31, 2008 that the registrant filed with the SEC effective March 12,
2009 (the “2008 Form
10-K”), the Borrowers are in discussions with the Lenders to amend the
terms of the Amended Revolving Credit Facility to eliminate, among other things,
the requirement that the Borrowers comply with the Debt Ratio until at least
March 31, 2010. While the registrant believes it is possible that the
Borrowers can obtain such an amendment to eliminate compliance with the Debt
Ratio though at least March 31, 2010, there is no assurance that such amendment
will be obtained or if obtained that the requirement to maintain the Debt Ratio
would be eliminated (or waived, in the event the Lenders would only agree to a
waiver and not an amendment to eliminate the Debt Ratio covenant itself) through
at least March 31, 2010. Any such amendment or waiver that the
Borrowers might obtain could increase their future borrowing costs, either from
a requirement that they pay a higher rate of interest on outstanding borrowings
and/or pay a fee to the Lenders as part of agreeing to such amendment or
waiver.
In the
event the Borrowers are not successful in obtaining the amendment or waiver of
the Amended Revolving Credit Facility to eliminate the requirement to comply
with the Debt Ratio financial covenant until at least March 31, 2010, 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: May
4, 2009
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John
A. St. Wrba
Vice
President and Assistant
Treasurer
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