BALL Corp — Capital/Financing Update 1996

Oct 16, 1996

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 October 1, 1996 (Date of earliest event reported) BALL CORPORATION (Exact name of Registrant as specified in its charter) Indiana 1-7349 35-0160610 (State of (Commission File No.) (IRS Employer Incorporation) Identification No.) 345 South High Street Muncie, Indiana 47307 (Address of principal executive offices, including zip code) (317) 747-6100 (Registrant's telephone number, including area code) ITEM 2. DISPOSITION OF ASSETS On October 1, 1996, BG Holdings I, Inc., BG Holdings II, Inc. (each indirect wholly owned subsidiaries of Ball Corporation ("Ball") and collectively referred to herein as the "Ball Subsidiaries"), Saint-Gobain Corporation and its wholly-owned subsidiary, Saint-Gobain Holdings I Corp (the "Saint-Gobain Subsidiary") and Ball-Foster Glass Container Co., L.L.C. ("Ball-Foster") entered into a Purchase Agreement (the "Purchase Agreement") pursuant to which each Ball Subsidiary sold its 21% Ordinary Interest (42% in the aggregate) in Ball-Foster to the Saint-Gobain Subsidiary for an aggregate purchase price of $190 million in cash. Capitalized terms not otherwise defined herein are used as defined in the Purchase Agreement. The Purchase Price for the transaction was determined as a result of arms length negotiations between the parties. Prior to the closing of the transactions contemplated by the Purchase Agreement, the Saint-Gobain Subsidiary owned a 58% Ordinary Interest in Ball-Foster. As a result of the transaction, Ball and its affiliates have no further equity interest in Ball-Foster. Ball-Foster was formed by affiliates of Ball and Saint-Gobain on September 15, 1995, at which time Ball-Foster acquired the glass container manufacturing business (the "Ball Glass Business") owned by certain Ball affiliates. Ball continues to provide certain services to Ball-Foster for which Ball receives a fee. In addition, in connection with the closing under the Purchase Agreement described above, the final post- closing purchase price adjustment due in connection with the sale of the Ball Glass Business to Ball-Foster was determined, resulting in a payment of an additional $11 million to an affiliate of Ball. ITEM 5. OTHER EVENTS. On October 7, 1996, Ball Corporation ("Ball") announced that it plans to exit the aerosol can manufacturing business by selling its Cincinnati manufacturing plant and certain other assets to BWAY Corporation of Atlanta for an aggregate purchase price of $36 million. The transaction is expected to close in the fourth quarter, contingent upon required regulatory filings. A copy of the press release that was issued by Ball relating to such agreement and certain other matters is attached hereto as an Exhibit and incorporated herein by reference. ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL IN- FORMATION AND EXHIBITS. (b) Unaudited Pro Forma Financial Information The following unaudited pro forma condensed consolidated statements of income (loss) of Ball Corporation and Subsidiaries ("the Company") for the year ended December 31, 1995 and for the six-month period ended June 30, 1996 and the condensed consolidated balance sheet as of June 30, 1996 give effect to the following two transactions: (1) the sale of substantially all of the assets of Ball Glass Container Corporation ("Ball Glass") a wholly-owned subsidiary of the Company on September 15, 1995 to Ball-Foster Glass Container Co., L.L.C. ("Ball-Foster"), a joint venture limited liability company of which the Company acquired a 42% interest (the "1995 Transactions"); (2) the sale of the Company's 42% interest in Ball-Foster to Compagnie de Saint-Gobain on October 1, 1996, (the "1996 Transaction"). The pro forma statements are prepared as if the aforementioned transactions had occurred January 1, 1995 for the statements of income (loss) and at June 30, 1996 for the balance sheet. Proceeds of the 1995 Transactions were $141.9 million and proceeds of the 1996 Transaction include $190.0 million of cash from the sale of the Company's 42% interest in Ball-Foster, $11.0 million in settlement of the purchase price adjustment for the September 15, 1995 sale of Ball Glass to Ball-Foster and $8.4 million received as cash distributions from Ball-Foster under the limited liability company agreement. The unaudited pro forma condensed consolidated statements of income (loss) are not necessarily indicative of the results which would have been obtained had the transactions occurred at January 1, 1995, nor are they necessarily indicative of future results. The unaudited pro forma condensed consolidated balance sheet is not necessarily indicative of the actual application of the proceeds had the transactions occurred at June 30, 1996. The pro forma financial information should be read in conjunction with: the accompanying notes to unaudited pro forma condensed consolidated statements of income (loss); the accompanying notes to unaudited pro forma condensed consolidated balance sheet; the Company's Annual Report on Form 10-K for the year ended December 31, 1995 and Company's Quarterly Reports on Form 10-Q for the quarters ended March 31, 1996 and June 30, 1996.

Ball Corporation and Subsidiaries NOTES TO PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF INCOME (LOSS) (Unaudited) (a) To reverse the results of Ball Glass included in the consolidated results for the period from January 1, 1995 through September 15, 1995 (date of sale of Ball Glass to Ball-Foster). Interest expense has not been adjusted since interest-bearing indebtedness related to Ball Glass was retained by the Company. (b) To exclude the nonrecurring loss recognized upon disposition of Ball Glass in September 1995. (c) To reverse the Company's 42% equity interest in Ball-Foster's earnings/loss for the periods of September 15, 1995 through December 31, 1995, and January 1, 1996 through June 30, 1996. (d) To reflect certain allocated corporate overhead costs which were not eliminated as a consequence of the sale of Ball Glass. (e) Reflects the application of the $141.9 million proceeds received from the 1995 Transactions, and the $209.4 million proceeds received from the 1996 Transaction, to reduce the Company's indebtedness. Interest expense was reduced at weighted average interest rates of 4.9% in 1995 and 4.6% in 1996. (f) To reflect the income tax effects of the pro forma adjustments at statutory rates.

Ball Corporation and Subsidiaries NOTES TO PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET (Unaudited) (a) To reflect the sale of the Company's 42% equity interest in Ball-Foster. The $10.0 million addition to shareholders' equity represents the Company's preliminary estimate of the after-tax gain to be recognized from the sale. (b) Reflects the application of the net cash proceeds from the 1996 Transaction to reduce indebtedness at June 30, 1996. (c) Exhibits: Exhibit 2: Purchase Agreement, dated as of September 13, 1996, by and among BG Holdings I, Inc., BG Holdings II, Inc., Saint-Gobain Corporation, and Ball-Foster Glass Container Co., L.L.C.. Exhibit 99.1: Ball Corporation Press Release, issued September 16, 1996. Exhibit 99.2: Ball Corporation Press Release, issued October 7, 1996. 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. By:/s/ Donald C. Lewis ------------------------------- Name: Donald C. Lewis Title: General Counsel and Assistant Corporate Secretary Date: October 16, 1996 EXHIBIT INDEX - ------------- Exhibit Description - ------- ----------- 2 Purchase Agreement, dated as of September 13, 1996, by and among BG Holdings I, Inc., BG Holdings II, Inc., Saint-Gobain Corporation, and Ball-Foster Glass Container Co., L.L.C.. 99.1 Press release issued September 16, 1996. 99.2 Press release issued October 7, 1996.