SCHEDULE 14C
(RULE 14C-101)
INFORMATION REQUIRED IN INFORMATION STATEMENT
SCHEDULE 14C INFORMATION
INFORMATION STATEMENT PURSUANT TO SECTION 14(c) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Check the appropriate box:
/X/ Preliminary Information Statement
/ / Confidential, for use of the Commission only
/ / Definitive Information Statement (as permitted by Rule 14c-5(d)(2)).
ALLIS-CHALMERS CORPORATION
(Name of Registrant as Specified in Its Charter)
PAYMENT OF FILING FEE (CHECK THE APPROPRIATE BOX):
/X/ No fee required
/ / Fee computed on table below per Exchange Act Rules 14c-5(g) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed pursuant to
Exchange Act Rule 0-11 (Set forth the amount on which the filing fee is
calculated and state how it was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the form or schedule and the date of its filing.
(1) Amount previously paid:
(2) Form, schedule or registration statement no.:
(3) Filing party:
(4) Date filed:
ALLIS-CHALMERS CORPORATION
NOTICE OF CONSENT IN LIEU OF SPECIAL MEETING OF STOCKHOLDERS
TO THE STOCKHOLDERS:
Notice is hereby given to you as stockholders of record of Allis-Chalmers
Corporation (the "Company") as of June 21, 2004 that a Written Consent in Lieu
of a Special Meeting of Stockholders has been executed with an effective date of
July 15, 2004 (the "Written Consent"). As explained in the enclosed Information
Statement, holders of more than 80% of the Company's common stock have executed
the Written Consent, which authorizes the Company to effect a private placement
of its common stock in an amount up to $15 million.
The Board of Directors believes it would not be in the best interest of the
Company and its stockholders to incur the costs of holding a meeting or of
soliciting proxies or consents from additional stockholders in connection with
the action. Based on the foregoing, our Board of Directors has determined not to
call a Special Meeting of Stockholders.
Stockholders of record of the Company's common stock at the close of business on
June 21, 2004 have received this Notice of Consent in Lieu of Special Meeting of
Stockholders.
BY ORDER OF OUR BOARD OF DIRECTORS
MUNAWAR H. HIDAYATALLAH,
CHAIRMAN OF THE BOARD OF DIRECTORS AND
CHIEF EXECUTIVE OFFICER
June 24, 2004
ALLIS-CHALMERS CORPORATION
7660 WOODWAY, SUITE 200
HOUSTON, TEXAS 77063
INFORMATION STATEMENT
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GENERAL INFORMATION
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YOUR VOTE IS NOT REQUIRED
WE ARE NOT ASKING YOU FOR A PROXY AND
YOU ARE REQUESTED NOT TO SEND US A PROXY
Allis-Chalmers Corporation, a Delaware corporation (the "Company"), furnishes
this Information Statement to the holders of record of the Company's common
stock, par value $0.01 per share on June 21, 2004 (the "Record Date"). As of the
Record Date, there were approximately 6,278,756 shares of common stock
outstanding. Each share of common stock is entitled to one vote per share on the
approval of the issuance of common stock in a proposed private placement of
common stock. This Information Statement is being mailed to stockholders on or
about June 24, 2004.
Holders of more than 80% of the outstanding common stock have executed a Written
Consent in Lieu of Special Meeting (the "Written Consent"), with an effective
date of July 15, 2004, approving the issuance of common stock in a proposed
private placement of common stock. No other action was authorized by the Written
Consent. This Information Statement is being provided pursuant to the
requirements of Rule 14c-2 promulgated under Section 13 of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), to inform holders of the
Company's common stock who are entitled to vote on, authorize or consent to the
matters authorized by the Written Consent. This Information Statement also
constitutes notice of the actions to be approved pursuant to the Written Consent
for purposes of Section 228(c) of the Delaware General Corporation Law.
Because holders of more than 80% of the Company's outstanding common stock have
executed the Written Consent, no vote or consent of any other stockholder is
being, or will be, solicited in connection with the authorization of the matters
set forth in the Written Consent. Under Delaware law and our Certificate of
Incorporation, the votes represented by the holders signing the Written Consent
are sufficient in number to authorize the matters set forth in the Written
Consent, without the vote or consent of any other stockholder of the Company.
Delaware statutes provide that any action that is required to be taken, or that
may be taken, at any annual or special meeting of stockholders of a Delaware
corporation may be taken, without a meeting, without prior notice and without a
vote, if a written consent, setting forth the action taken, is signed by the
holders of outstanding capital stock having not less than the minimum number of
votes necessary to authorize such action.
Based on the foregoing, our Board of Directors has determined not to call a
special meeting of stockholders to consider the matters approved by the Written
Consent. Our Board of Directors believes it would not be in the best interests
of the Company and its stockholders to incur the costs of holding a meeting or
of soliciting proxies or consents from additional stockholders in connection
with these actions.
We have provided brokers, dealers, banks, voting trustees and their nominees, at
our expense, with additional copies of this Information Statement so that such
record holders can supply this Information Statement to beneficial owners as the
Record Date. We will bear all expenses incurred in connection with the
distribution of this Information Statement. We will reimburse brokers or other
nominees for expenses they incur in forwarding this material to beneficial
owners.
PROPOSAL: APPROVAL OF
PRIVATE PLACEMENT OF COMMON STOCK
Our Board of Directors has determined that it is in the best interests of the
Company and our stockholders to raise up to $15 million through a private
placement (the "Private Placement") of shares of our common stock. On June __,
2004, the Company's common stock was listed on the American Stock Exchange
("AMEX"). Amex Company Guide Section 713 requires that the Company obtain
stockholder approval of any transaction involving the issuance of shares
constituting 20% or more of the presently issued and outstanding shares of
common stock if such shares are sold in a private transaction for less than the
greater of book or market value of the common stock. Because the Private
Placement may require approval under AMEX Company Guide Section 713, the Company
sought and obtained the written consent of its largest shareholders to the terms
of the transaction. While the terms of the Private Placement have not been
determined, holders of more than 80% of the outstanding common stock have
executed the Written Consent, which authorizes the issuance of common stock on
the terms described below.
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TERMS OF THE WRITTEN CONSENT. The Written Consent allows the Board of Directors
of the Company to determine the terms of the Private Placement, provided that:
o The total amount raised shall not exceed $15 million
o The securities offered shall consist solely of common stock
o The transaction shall be exempt from registration under the Securities
Act of 1933, as amended, pursuant to Regulation D of the Securities and
Exchange Commission
o The minimum offering price per share shall be at least $3.25 per share
o The number of shares to be issued shall not exceed 4,615,385 shares
o The Private Placement shall be consummated no later than 90 days
following the effective date of the Written Consent.
While the terms and conditions of the Private Placement have not been negotiated
nor buyers identified, it is anticipated that the Private Placement will be
structured as what is known as a "private investment in public equity" or "PIPE"
offering, in which the Company will issue shares pursuant to an exemption from
the Securities Act of 1933, and will agree to register the common stock under
the Securities Act of 1933 to allow investors to resell the common stock in
public markets. It is expected the Company will pay a commission of 7% of the
gross offering price to broker-dealers who act as placement agents for the
Company. The minimum offering price per share and other requirements have been
approved by stockholders in accordance with the policies of the American Stock
Exchange and the Company believes that the actual price at which the common
stock will be sold will be in excess of $3.25 per share (though there can be no
assurance of such fact). As of June 21, 2004, the last sale price of the common
stock on the American Stock Exchange was $___. As of March 31, 2004, the book
value of the common stock was $1.35 (after giving effect to a one to five
reverse stock split effected on June 10, 2004).
There can be no assurance that the Company will complete the Private Placement,
or if any such transaction is completed, it will be in the form, amount or
timing that is currently contemplated. However, any offering which requires
stockholder approval pursuant to Section 713 of the AMEX Company Guide must be
on terms consistent with the Written Consent -- otherwise, additional
Stockholder approval will be required.
USE OF PROCEEDS. The Company will use the net proceeds of the offering to reduce
debt, for acquisitions, and for general corporate purposes. While the Company is
in discussions with potential acquisition candidates, as of this date, the
Company has not entered into any agreement or made any firm offers with respect
to any acquisition candidate.
ANTICIPATED EFFECT OF THE ISSUANCE OF COMMON STOCK IN THE PRIVATE PLACEMENT. The
issuance of additional shares of common stock in the Private Placement will
dilute all existing holders of our common stock. The number of shares to be
issued pursuant to the Written Consent will depend upon the sales price. If the
Company were to sell common stock with an aggregate offering price of $15
million at $3.25 per share, 4,615,385 shares would be issued. The following
table demonstrates the dilution of the Company's shares resulting from such an
offering.
DILUTIVE EFFECT ON VOTING POWER
Shares of common stock outstanding as of June 21, 2004 6,278,756
Shares of common stock issued in Private Placement 4,615,385
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Pro-Forma shares of common stock outstanding after Private Placement 10,894,141
EFFECT ON MARKET PRICE. The Company anticipates that it will register under the
Securities Act of 1933 the resale of the shares issued in the private placement,
making them eligible for sale in the public markets. The Company anticipates
that broader ownership of the common stock will have a positive effect on the
market price of that Common Stock. However, this may not be the case and the
availability of these shares for sale on the public markets could depress the
market price of the common stock.
DESCRIPTION OF COMMON STOCK. We are authorized to issue up to 20 million shares
of common stock, par value $0.01. As of June 21, 2004, there were approximately
6,278,756 shares of common stock outstanding. Stockholders of common stock are
entitled to one vote per share on all matters to be voted upon by stockholders
and have no preemptive, subscription or conversion rights.
NO APPRAISAL / DISSENTER'S RIGHTS. Under the Delaware General Corporation Law,
our stockholders are not entitled to dissenters' rights with respect to this
proposal and we will not independently provide our stockholders with any such
right.
REGISTRATION UNDER SECURITIES ACT OF 1933. This Information Statement shall not
be deemed to be an offer of any securities. The common stock to be issued in the
Private Placement has not been registered under the Securities Act of 1933 and
may not be offered or sold in the United States absent registration or an
applicable exemption from registration requirements.
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SECURITY OWNERSHIP
OF
CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information known to us with respect to
the beneficial ownership of our common stock as of June 21, 2004, calculated in
accordance with the rules of the Securities and Exchange Commission, by (i) all
persons known to beneficially own five percent or more of the our common stock,
(ii) each director, and (iii) all current directors and executive officers as a
group. IT SHOULD BE NOTED THAT, IN ACCORDANCE WITH THE RULES OF THE SECURITIES
AND EXCHANGE COMMISSION, THE NUMBER AND PERCENTAGE OF SHARES INDICATED AS
BENEFICIALLY OWNED IN COLUMNS (A) AND (B) THE TABLE BELOW INCLUDES SHARES THAT
MAY BE OBTAINED UPON THE EXERCISE OF OUTSTANDING WARRANTS AND OPTIONS OWNED BY
THE PERSONS SET FORTH BELOW AND THUS EXCEEDS THE NUMBER OF SHARES CURRENTLY
OUTSTANDING. THE NUMBER AND PERCENTAGE OF SHARES SHOWN IN COLUMNS (C) AND (D)
SHOW THE NUMBER AND PERCENTAGE OF SHARES THAT WOULD BE BENEFICIALLY OWNED IF ALL
OUTSTANDING WARRANTS AND OPTIONS WERE EXERCISED, IN WHICH CASE THE COMPANY WOULD
HAVE OUTSTANDING 9,939,954 SHARES OF COMMON STOCK.
(A) (B) (C) (D)
Number Percentage
of Shares of Shares
Number of Owned Owned
Shares Beneficial on a on a
Beneficially Ownership Fully-Diluted Fully-Diluted
Name Owned Percentage Basis Basis
---------------------------- -------------------- ------------------ ------------------- ----------------
Energy Spectrum (1) 7,600,874 86.4% 8,064,074 88.0%
Munawar H. Hidayatallah (2) 7,600,874 86.4% 8,064,074 88.0%
Colebrooke Investments, Inc. (3) 615,000 9.8% 615,000 5.4%
Robert E. Nederlander (4) 7,600,874 86.4% 8,064,074 88.0%
Leonard Toboroff (5) 7,600,874 86.4% 8,064,074 88.0%
Saeed Sheikh (6) 7,600,874 86.4% 8,064,074 88.0%
James W. Spann (1) 7,600,874 86.4% 8,064,074 88.0%
Christina Woods (1) 7,600,874 86.4% 8,064,074 88.0%
Thomas O. Whitener, Jr. (1) 7,600,874 86.4% 8,064,074 88.0%
David Groshoff (7) 121,020 1.9% 121,020 1.0%
Jens H. Mortensen, Jr. (8) 7,600,874 86.4% 8,064,074 88.0%
Chris Engel (9) 7,600,874 86.4% 8,064,074 88.0%
Donald Engel (10) 7,600,874 86.4% 8,064,074 88.0%
Engel Defined Benefit Plan (11) 7,600,874 86.4% 8,064,074 88.0%
John E. McConnaughy, Jr. 0 * 0 *
David Wilde (12) 33,333 * 100,000 *
Todd C. Seward (13) 10,000 * 30,000 *
Executive Officers as a
group (4 persons) (14) 7,644,207 86.8% 8,194,074 89.5%
All directors and executive
officers as a group (12
persons) (15) 7,765,819 88.3% 8,315,094 90.7%
* less than one percent
(1) Energy Spectrum includes Energy Spectrum Partners LP, a Delaware limited
partnership, the principal business of which is investments, Energy Spectrum
Capital LP ("Energy Spectrum Capital"), a Delaware limited partnership, the
principal business of which is serving as the general partner of Energy Spectrum
Partners LP, Energy Spectrum LLC ("Energy Spectrum LLC") a Texas limited
liability company, the principal business of which is serving as the general
partner of Energy Spectrum Capital, and Sydney L. Tassin, James W. Spann, James
P. Benson, Leland B. White and Thomas O. Whitener, Jr., executives and
principals of the foregoing persons. The principal business address of each of
the foregoing persons is 5956 Sherry Lane, Suite 900, Dallas, Texas 75225.
Messrs. Tassin, Spann, Benson, White and Whitener are the members and managers
of Energy Spectrum LLC, and Messrs. Tassin (President), Whitener (Chief
Operating Officer) and Spann (Chief Investment Officer) are executive officers
of Energy Spectrum LLC. Messrs. Whitener and Spann are principals of Energy
Spectrum Partners LP's affiliates and the other persons listed above are also
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deemed to beneficially own the securities held of record by Energy Spectrum
Partners LP. Energy Spectrum Partners LP is the record owner of 3,036,062 shares
of our common stock, warrants to purchase 262,500 shares of common stock, and an
option to purchase 6,000 shares of common stock. Energy Spectrum is also deemed
to own 5,492,849 shares of common stock that are owned by (or that may be
obtained within 60 days upon the exercise of options and warrants held by) the
other parties to the Stockholders Agreement described below. Under the rules of
the Securities and Exchange Commission, all parties to the Stockholders
Agreement are deemed to be a group and each party is deemed to beneficially own
all common stock beneficially owned by each member of the group.
(2) Mr. Hidayatallah is the record owner of 875,000 shares of our common stock
and options to purchase 400,000 shares of common stock, of which options to
purchase 133,333 shares are exercisable within 60 days following the date of
this report. In addition, Mr. Hidayatallah is deemed to beneficially own
7,789,078 shares of common stock that are owned by (or may be obtained within 60
days upon the exercise of options and warrants held by) the other parties to the
Stockholders Agreement described below. Mr. Hidayatallah's address is 7660
Woodway, Suite 200, Houston, Texas 77064.
(3) Colebrooke Investments, Inc. is a limited company organized under the laws
of Guernsey, whose address is LaPlaiderie House, St. Peter Port, Guernsey
GY13DQ. No natural person controls Colebrooke, and none of our officers or
directors has a financial interest in Colebrooke. The owner of all of
Colebrooke's shares is Jupiter Trust, a Guernsey trust. The corporate trustee of
Jupiter Trust is the Ansbacher Trust Company ("Ansbacher"), a Guernsey trust in
which action is taken upon majority vote of such trust's three directors,
Messrs. Robert Bannister and Phillip Retz and Ms. Rachel Whatley. Such directors
have absolute discretion to take action and make investment decisions on behalf
of Ansbacher and can be deemed to control Ansbacher, which has sole voting and
dispository power over the shares of Colebrooke. There are no individual
directors of Colebrooke; the corporate director for Colebrooke is Plaiderie
Corporate Directors One Limited, a Guernsey Company ("Plaiderie"). Plaiderie is
wholly-owned by Ansbacher Guernsey Limited ("Ansbacher Limited"), a controlled
registered bank in Guernsey. The ultimate parent of Ansbacher Limited is First
Rand Limited ("First Rand"), a publicly-owned company listed on the Johannesburg
Stock Exchange. First Rand can be deemed to control Plaiderie.
(4) Includes (a) 276,529 shares of common stock owned directly by Mr.
Nederlander or by RER Corp., which is wholly owned by Mr. Nederlander, (b)
currently exercisable options and warrants to purchase 268,066 shares of common
stock owned directly by Mr. Nederlander or RER Corp., and (c) 8,251,816 shares
of common stock that are owned by (or may be obtained within 60 days upon the
exercise of options and warrants held by) the other parties to the Stockholders
Agreement described below. Mr. Nederlander's address is 1450 Broadway, Suite
2001, New York, NY 10018.
(5) Includes (a) 226,928 shares of common stock owned directly by Mr. Toboroff,
(b) currently exercisable options and warrants to purchase 369,067 shares of
common stock owned directly by Mr. Toboroff, and (c) 8,201,416 shares of common
stock that are owned by (or may be obtained within 60 days upon the exercise of
options and warrants held by) the other parties to the Stockholders Agreement
described below. Mr. Toboroff's address is 1450 Broadway, Suite 2001, New York,
NY 10018.
(6) Includes (a) 202,000 shares of common stock owned by Mr. Sheikh, (b)
currently exercisable options to purchase 2,000 shares of common stock held by
Mr. Sheikh, and (c) 8,593,411 shares of common stock that are owned by (or may
be obtained within 60 days upon the exercise of options and warrants held by)
the other parties to the Stockholders Agreement described below. Mr. Sheikh's
address is 1050 17th Street, N.W., Suite 450, Washington DC 20036.
(7) Includes 2,000 shares of common stock and currently exercisable options to
purchase 2,000 shares of common stock owned by Mr. Groshoff and 117,020 shares
of common stock as to which Mr. Groshoff has the authority to vote and to direct
the disposition on behalf of the Pension Benefit Guaranty Corporation. Mr.
Groshoff's address is 8044 Montgomery Rd., Suite 480, Cincinnati OH 45236.
(8) Includes (a) 265,591 shares of common stock owned of record by Mr.
Mortensen, (b) 1,300,000 shares of common stock which Mr. Mortensen has the
right to obtain upon the exercise by Mr. Mortensen of his by right to convert
his interest in Jens' into shares of our common stock pursuant to an Agreement
entered into in connection with the acquisition of Jens', and (c) 5,492,849
shares of common stock that are owned by (or may be obtained within 60 days upon
the exercise of options and warrants held by) the other parties to the
Stockholders Agreement described below. Mr. Mortensen's address is 7660 Woodway,
Suite 200, Houston, Texas 77064.
(9) Includes (a) 77,461 shares of common stock owned of record by Mr. Engel, (b)
99,950 shares of common stock issuable upon the exercise of warrants held by Mr.
Engel, and (c) 7,423,463 shares of common stock that are owned by (or may be
obtained within 60 days upon the exercise of options and warrants held by) the
other parties to the Stockholders Agreement described below. Mr. Engel's address
is 1075 Park Avenue, New York, New York, 10128.
(10) Includes (a) 92,953 shares of common stock owned of record by Mr. Engel,
(b) 119,940 shares of common stock issuable upon the exercise of warrants held
by Mr. Engel, and (c) 7,389,981 shares of common stock that are owned by (or may
be obtained within 60 days upon the exercise of options and warrants held by)
the other parties to the Stockholders Agreement described below. Mr. Engel's
address is 570 Park Avenue, New York, New York, 10021.
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(11) Includes (a) 36,251 shares of common stock owned of record by the Plan, (b)
46,776 shares of common stock issuable upon the exercise of warrants held by the
Plan and (c) 7,517,847 shares of common stock that are owned by (or may be
obtained within 60 days upon the exercise of options and warrants held by) the
other parties to the Stockholders Agreement described below. The Plan's address
is 570 Park Avenue, New York, New York, 10021.
(12) Includes 33,333 shares of common stock which may be obtained upon exercise
of an option granted under the Company's 2003 Stock Incentive Plan.
(13) Includes 10,000 shares of common stock which may be obtained upon exercise
of an option granted under the Company's 2003 Stock Incentive Plan.
(14) Includes the shares beneficially owned by Messrs. Hidayatallah, Mortensen,
Wilde and Seward.
(15) Includes the shares described in Notes (1) - (2), Notes (4) - (8) and Notes
(12) - (13).
On April 2, 2004, an investor group consisting of Donald Engel, Chris Engel, the
Engel Investors Defined Benefit Plan, director Leonard Toboroff and RER Corp., a
Michigan corporation wholly owned by director Robert Nederlander (the "Investor
Group"), Energy Spectrum, and directors Jens H. Mortensen, Jr., Saeed M. Sheikh
and Munawar H. Hidayatallah entered into a stockholders agreement (the
"Stockholders Agreement") pursuant to which the parties agreed to vote for the
election to the board of directors of the Company three persons nominated by
Energy Spectrum, two persons nominated by the Investor Group and one person
nominated by Messrs. Hidayatallah, Mortensen and Sheikh. The parties to the
Stockholders Agreement collectively own approximately 81% of the outstanding
common stock, and thus have the power to elect six of our nine directors. No
directors have yet been elected pursuant to this Agreement; however, prior to
April 2, 2004, Energy Spectrum owned all of the outstanding Series A 10%
Cumulative Convertible Preferred Stock (the "Series A Preferred Stock") of the
Company and in such capacity was entitled to designate three directors to the
Company's Board. Messrs. Whitener and Spann and Ms. Woods were appointed to our
Board as designees of Energy Spectrum.
FORWARD LOOKING STATEMENTS
This document contains forward-looking statements that involve risks and
uncertainties. Future events may differ materially from the results
discussed in such forward-looking statements. Factors that might cause such
differences are identified in our Securities and Exchange Commission filings.
OTHER MATTERS
No other matters will be effected pursuant to the Written Consent.
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