Attached files
file | filename |
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EX-2.1 - EX-2.1 - CRONOS GLOBAL INCOME FUND XVI LP | f59709exv2w1.htm |
EX-2.2 - EX-2.2 - CRONOS GLOBAL INCOME FUND XVI LP | f59709exv2w2.htm |
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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
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
August 1, 2011
Date of Report (Date of Earliest Event Reported)
Cronos Global Income Fund XVI, L.P.
(Exact name of registrant as specified in its charter)
California
(State or Other Jurisdiction of Incorporation)
0-27496 | 94-3230380 | |
(Commission File Number) | (IRS Employer Identification No.) |
One Front Street, Suite 925, San Francisco, California 94111
(Address of principal executive offices) (Zip Code)
(415) 677-8990
(Funds Telephone Number, Including Area Code)
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:
o Written communications pursuant to Rule 425 under the Securities Act (17 CFR § 230.425)
o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR § 240.14a-12)
o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR § 240.14d-2(b))
o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR § 240.13e-4(c))
TABLE OF CONTENTS
Item 1.01 Entry into a Material Definitive Agreement | ||||||||
Item 2.01 Completion of Acquisition or Disposition of Assets | ||||||||
Item 9.01 Financial Statements and Exhibits | ||||||||
SIGNATURES | ||||||||
EXHIBIT INDEX | ||||||||
EX-2.1 | ||||||||
EX-2.2 |
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Item 1.01 Entry into a Material Definitive Agreement.
The Registrant, Cronos Global Income Fund XVI, L.P., a California limited partnership (the
Fund), was organized on September 1, 1995 to engage in the business of owning and leasing
marine cargo containers to third-party lessees. The Fund is managed by Cronos Capital Corp., a
California corporation ( CCC), its general partner.
One of the principal investment objectives of the Fund was to lease its containers for ten to
fifteen years, and then to dispose of them and liquidate. In April 2011, the Partnership commenced
its sixteenth year of operations. Through occasional sales, retirements and casualty losses, the
Fund had sold or disposed of approximately 54% of its container fleet (measured on a TEU-basis) as
of June 30, 2011. With the reduction in the size of the Funds container fleet, the administrative
expenses incurred by the Fund, as a percent of its gross revenues, have increased. For this
reason, and consistent with the Funds investment objectives, CCC, as the general partner,
concluded that it would be in the best interest of the Fund and its limited partners to sell its
remaining containers in bulk.
CCC distributed a request for proposal ( RFP) on May 31, 2011 to third parties
seeking their interest in purchasing the Funds remaining containers. As of March 31, 2011 (the
date of the data in the RFP), the Fund owned 1,552 twenty-foot, 720 forty-foot, and 1,312
forty-foot high cube marine dry cargo containers, as well as 13 twenty-foot and 26 forty-foot high
cube refrigerated cargo containers and 43 tank containers.
The RFP included extensive information on the operating performance of the Funds containers,
information about the leases to which the containers are subject, information on the prior sales of
the Funds containers, and copies of the Funds first quarter 2011 10-Q.
No conditions were imposed by CCC on prospective bidders with respect to the contents of their
bids, with the exception of the following: bids had to be received by CCC by June 17, 2011, and
the bidders had to identify the source of capital the bidder would rely upon to fund the purchase,
the number of days required for due diligence (not to exceed 15), the number of days following the
completion of due diligence (not to exceed 15) that the bidder would consider reasonable for
closing, the amount of deposit the bidder would agree to make (not to be less than $10,000), any
conditions, other than the completion of due diligence, which applied to the bid, and the identity
of bidders counsel.
CCC indicated in the RFP that the target for consummating a sale of the Funds remaining
containers was August 1, 2011. CCC retained the discretion to vary the bidding procedures and to
conduct the process leading to any sale of the Funds containers as it determined, in its sole
discretion as general partner of the Fund, to be appropriate.
CCC distributed the RFP to 18 parties, including competitors of CCC in the container leasing
business. Five parties submitted proposals to purchase the Funds remaining containers. CCC
selected the highest bidder, P&R Equipment & Finance
Corporation, a company organized and existing under the laws of
Switzerland (P&R), to conduct final due diligence. During the due diligence
process, P&R teamed with one of its strategic business partners,
Transportation Capital
Partners, LLC (TCP) a California limited liability company. After conducting
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due
diligence, P&R finalized its joint bid with TCP for the amount of
$6,180,454 (the P&R and TCP Bid), subject to further adjustment for containers not readily
saleable or disposed of prior to the date of closing. CCC accepted the bid on July 22, 2011. As
of June 30, 2011, the book value of the Funds
remaining containers and direct financing lease
receivables was $2,043,868.
Affiliates
of CCC manage containers for P&R on terms CCC deems customary in the
containers leasing industry. The fleet of containers that affiliates
of CCC manage for P&R represents approximately 7% (measured by TEUs)
of the container fleet owned and managed by CCC and its affiliates.
On
August 1, 2011, the Fund completed the sale of 3,499 of its
remaining containers and direct financing lease receivables to P&R
and TCP. The final cash purchase amount was $6,180,454. All but 19 containers
owned by the Fund were sold to P&R and TCP, the retained containers consisting of
those subject to a bargain purchase option by the lessee or not readily saleable by reason of the
location of the containers, the credit status of the lessee(s) of the
containers, and/or the condition
of the containers.
The
P&R and TCP Asset Sale Agreements (Agreements) are
included with this report as Exhibits. The Agreements contain an
indemnification covenant (§9). To allow the Fund to liquidate and dissolve, the Funds indemnification
covenant did not survive the closing of the sale, August 1, 2011. The only recourse for
indemnification that P&R and TCP have under the Agreements is against
CCC, which covenant will generally expire on December 31, 2011.
The
effective date of the Agreements is July 1, 2011. From and after
that date, the buyers, P&R and TCP, are entitled to all net lease
revenues and sale proceeds (if any) attributable to the purchased
containers.
P&R
and TCP requested that an affiliate of CCC manage the containers purchased
by P&R and TCP from the Fund. Upon the closing of the sale of the Funds containers
to P&R and TCP, CCCs affiliate entered into separate management agreements with
P&R and TCP for the containers bought by P&R and TCP from the Fund.
The terms of the management agreements between CCCs affiliate
and both P&R and TCP were negotiated at arms length with each
party. CCCs affiliatess management of the
Funds containers was not imposed as a condition by CCC to the proposed sale of the Funds
containers to P&R and TCP (or any other party). CCC believes that the terms of the
management agreements between its affiliate and P&R and TCP are customary in the
container leasing industry.
With the completion of this sale of containers, the Fund has now resolved to wind up and
dissolve. CCC will proceed with the orderly liquidation of the Fund, the payment of its remaining
liabilities, and the distribution of the net proceeds of the Funds liquidation to the partners of
the Fund. CCC anticipates that the Fund will make one liquidating distribution to the limited
partners of the Fund, representing the net proceeds from the sale of
its containers and direct financing leases and the Funds
other remaining assets (after payment or reservation for payment of the Funds liabilities), to be
paid on or about September 15, 2011 to limited partners of record on August 1, 2011. CCC is not
prepared at this time to estimate the amount of the final distribution, pending disposal of the
Funds remaining containers and completion of an accounting review of the Funds remaining
liabilities to be discharged prior to the Funds termination. CCC anticipates that the Fund will
complete its liquidation by September 30, 2011 and de-register the Funds outstanding Units under
the Securities Exchange Act of 1934, as amended ( Exchange Act), thereby terminating the
Funds obligation to file further periodic reports under the Exchange Act with the Securities and Exchange
Commission.
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Item 2.01 Completion of Acquisition or Disposition of Assets.
See
the discussion of the sale of the Funds remaining containers
and direct financing leases under Item 1.01 above.
Item 9.01 Financial Statements and Exhibits
(c) Exhibits
Exhibit 2.1
|
Asset Sale Agreement, dated as of August 1, 2011, by and among Cronos Capital Corp., Cronos Global Income Fund XVI, L.P., and P&R Equipment & Finance Corporation. | |
Exhibit 2.2
|
Asset Sale Agreement, dated as of August 1, 2011, by and among Cronos Capital Corp., Cronos Global Income Fund XVI, L.P., and Transportation Capital Partners, LLC. |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Company has duly
caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
CRONOS GLOBAL INCOME FUND XVI, L.P., | |||||
By | Cronos Capital Corp., | ||||
The General Partner |
By | /s/ Frank P. Vaughan | ||||
Frank P. Vaughan | |||||
Chief Financial Officer |
Date: August 5, 2011
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EXHIBIT INDEX
Exhibit 2.1
|
Asset Sale Agreement, dated as of August 1, 2011, by and among Cronos Capital Corp., Cronos Global Income Fund XVI, L.P., and P&R Equipment & Finance Corporation. | |
Exhibit 2.2
|
Asset Sale Agreement, dated as of August 1, 2011, by and among Cronos Capital Corp., Cronos Global Income Fund XVI, L.P., and Transportation Capital Partners, LLC. |
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