TERRA NITROGEN CO L P 8-K 2005
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of report (Date of earliest event reported): September 1, 2005
TERRA NITROGEN COMPANY, L.P.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
600 Fourth Street, P.O. Box 6000
Sioux City, Iowa 51102-6000
(Address of Principal Executive Offices, including Zip Code)
(Registrants 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 (See General Instruction A.2. below):
On September 1, 2005, Terra Nitrogen Corporation (the Prior General Partner), which prior to such time was the general partner of Terra Nitrogen Company, L.P. (the Partnership), the Partnership and its operating partnership, Terra Nitrogen, Limited Partnership (the Operating Partnership, and together with the Partnership, the Partnerships), completed a restructuring of their organizational structure and certain contractual relationships. The purpose of the restructuring is to further reinforce the structural independence of the Partnerships from Terra Industries Inc. (Terra) and its wholly-owned subsidiaries (the Terra Group).
On September 1, 2005 (the Restructuring Closing Date), the Prior General Partner transferred all of its general partner interest (the GP Interest) in the Partnerships to Terra Nitrogen GP Inc. (the New General Partner) and the New General Partner became the general partner of the Partnerships. The New General Partner is an indirect, wholly owned subsidiary of Terra that is not required to guarantee the debt of the Terra Group. Under the New General Partners governing documents, neither the New General Partner nor the Partnerships may make any bankruptcy filing (or take similar action) without the approval of the New General Partners independent directors. In addition, the Partnerships property has been released from liens securing debt of the Terra Group so that such property cannot be foreclosed upon in the event there were a default by the Terra Group on Terra Group indebtedness. The directors and officers of the Prior General Partner will serve in the same roles as the New General Partner. For more information on the New General Partner see Item 8.01 of this report.
In connection with the transfer of the GP Interest, the New General Partner transferred its rights to certain incentive distributions under Sections 5.4(D), (E) and (F) of the Amended and Restated Limited Partnership Agreement of the Partnership back to the Prior General Partner.
The restructuring includes:
The restructuring was approved in accordance with the Agreement of Limited Partnership of the Partnership and the Agreement of Limited Partnership of the Operating Partnership Agreement, in each case, as they existed prior to the restructuring, by the Prior General Partner, the Board of Directors of the Prior General Partner and the Partnership, as limited partner of the Operating Partnership. In connection with such approval, the Board of Directors recommended approval of the succession of the New General Partner as the general partner of the Partnerships, and the execution and delivery by the Partnerships, as applicable, of the A/R Partnership Agreement, the A/R Operating Partnership Agreement, the Reorganization Agreement and the Conveyance Agreement.
The Board of Directors of the Prior General Partner approved the restructuring of its outstanding GP Interest in the Partnership, constituting a 1/99ths GP Interest (the MLP GP Interest) and its outstanding GP Interest in the Operating Partnership, constituting a 1% GP Interest in the Operating Partnership (the OLP GP Interest) so that (i) the MLP GP Interest was changed into a 0.025/99ths GP Interest in the Partnership represented by 4,720 General Partner Units (the Revised MLP GP Interest) and a 0.975/99ths limited partner interest in the Partnership represented by 184,072 non-voting Class B Common Units; (ii) the OLP GP Interest was changed into a 0.025% GP Interest in the Operating Partnership (the Revised OLP GP Interest) and a 0.975% limited partner interest in the Operating Partnership. The Revised MLP GP Interest and the Revised OLP GP Interest were conveyed to the New General Partner in exchange for cash equal to the fair market value of the Revised MLP GP Interest and the Revised OLP GP Interest. The New General Partner assigned its rights to certain incentive distributions under Sections 5.4(D), (E) and (F) of the A/R Limited Partnership Agreement back to the Prior General Partner. The Board of Directors of Terra and the trustee under the 2008 Indenture and 2010 Indenture received a fairness opinion of an independent financial advisor in connection with the restructuring.
Effective as of the Restructuring Closing Date, the New General Partner succeeded as the general partner of the Partnerships and became the manager of the Partnerships under the A/R Partnership Agreement and the A/R
Operating Partnership Agreement. Changes to the A/R Partnership Agreement are described in Item 1.01 of this report and are incorporated by reference into this Item 5.03. On the Restructuring Closing Date, the New General Partner adopted a certificate of incorporation (the New Charter) substantially similar to that of the Prior General Partner, except that the New Charter includes provisions (i) prohibiting the New General Partner from providing any guarantees of Terra debt (but not Partnership debt) and (ii) requiring the New General Partners independent directors approval of any bankruptcy filing (or similar action) by the New General Partner or the Partnerships (the Designated Provisions). As provided in the New Charter, the Designated Provisions terminate at such time as there are no longer any non-Terra affiliates holding publicly-traded common units in the Partnership.
The Bylaws of the New General Partner are substantially similar to those of the Prior General Partner.
The Certificate of Incorporation and Bylaws of the New General Partner are attached as Exhibit 3.2 and 3.3, respectively and incorporated herein by reference.
In connection with the restructuring, the Prior General Partner transferred its general partner interest in the Partnerships to the New General Partner and the New General Partner thereby was admitted as the general partner of the Partnerships. The transfer of general partner interests did not constitute a change of control and the New General Partner has the same directors and officers as the Prior General Partner prior to the restructuring, except that one new director was appointed as described in the Form 8-K filed by the Partnership on July 22, 2005. The directors and officers will serve in identical roles with respect to the operation and management of the New General Partner, except as modified by the Designated Provisions. The independent directors of the New General Partner have resigned from the Board of Directors of the Prior General Partner.
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
Date: September 7, 2005