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 earliest event reported): July 26, 2006
INCO LIMITED
(Exact name of Registrant as specified in its charter)
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| CANADA
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1-1143
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98-0000676 |
(Province or other jurisdiction of
incorporation or organization)
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(Commission File Number)
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(I.R.S. Employer Identification
Number (if applicable)) |
145 King Street West, Suite 1500,
Toronto, Ontario M5H 4B7
(416) 361-7511
(Address and Telephone Number of Registrant’s Principal Executive Offices)
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):
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))
Item 1.02 Termination of a Material Definitive Agreement.
Support Agreement between Inco and Falconbridge
On July 28, 2006, Inco Limited (“Inco”) announced that its offer (the “Offer”) to acquire all of
the outstanding common shares of Falconbridge Limited (“Falconbridge”) expired at midnight
(Vancouver time) on July 27, 2006 (the “Expiry Time”).
At the Expiry Time fewer than 50.01% of the
Falconbridge common shares outstanding at the Expiry Time (calculated on a fully diluted basis) had
been validly deposited under the Offer and not withdrawn, with the result that the Minimum Tender
Condition (as defined in the Offer) under the Offer had not been satisfied. Accordingly, Inco
elected not to extend the Offer, did not take up any common shares of Falconbridge under the Offer and
instructed CIBC Mellon Trust Company, the depositary under the Offer, to return all Falconbridge
common shares tendered to the Offer.
On July 28, Inco also provided notice to Falconbridge that it was terminating the support agreement
(as amended, the “Support Agreement”) originally entered into by Inco and Falconbridge on October
10, 2005, as subsequently amended on January 12, 2006, February 20, 2006, March 21, 2006, May 13,
2006, June 25, 2006 and July 16, 2006, respectively, in accordance with its terms as a result of
the Minimum Tender Condition not having been satisfied and Inco’s decision not to extend the Offer.
Accordingly, under the terms of the Support Agreement, an enhanced expense payment of US$150
million was paid by Falconbridge to Inco and, upon the acquisition of Falconbridge common
shares by Xstrata Canada Inc. (a wholly-owned subsidiary of Xstrata
plc) under its offer to purchase all of the outstanding common shares
of Falconbridge a further US$300
million will become payable by Falconbridge to Inco.
As a
result of the expiration of the Offer, the definitive agreement entered into by Inco,
Falconbridge and LionOre Mining International Ltd. (“LionOre”) with respect to the divestiture of
the Nikkelverk refinery and related assets has been terminated. This agreement was
conditioned on the successful completion of the Offer and, as a result of its termination, a fee of
US$32.5 million was paid by Inco to LionOre.
Loan Agreement
On
July 26, 2006, Inco entered into an Amended and Restated Loan Agreement (the “Amended Loan
Agreement”) with a group of banks and financial institutions, including Morgan Stanley Senior
Funding (Nova Scotia) Co. (“MSSF”), RBC Capital Markets (“RBC”), Goldman Sachs Canada Credit
Partners Co. (“GSCCP”) and The Bank of Nova Scotia (“BNS”, and together with MSSF, RBC, and GSCCP,
the “Lead Arrangers”). The Amended Loan Agreement amended and restated the terms of the Loan
Agreement (the “Loan Agreement”) dated as of December 22, 2005, among Inco, RBC, as administrative
agent, the Lead Arrangers and the other banks and other financial institutions party thereto as
lenders, as amended by the First Amendment Agreement and Second Amendment Agreement between such
parties dated as of January 31, 2006 and February 20, 2006, respectively, and by the US$4 Billion
Credit Facility Waiver and Amendment Letter dated June 25, 2006 between Inco and the Lead Arrangers
(such amendments, together with any and all further amendments, the “Loan Agreement Amendments”).
The Amended Loan Agreement increased the total credit facility
available to Inco from US$4 billion to US$5.5 billion and
incorporated the amendments made to the Loan Agreement pursuant to the Loan Agreement Amendments
through the date of the Amended Loan Agreement.
On July 28, 2006, Inco delivered a commitment termination notice to RBC, as Administrative Agent
under the Amended Loan Agreement and to each of the Lenders under the Amended Loan Agreement,
pursuant to which Inco terminated the Unused Term Loan Commitments and the Unused Bridge Loan
Commitments, each as defined in the Amended Loan Agreement. Inco terminated the commitments under
the Amended Loan Agreement because it believes that it no longer has need for the loan facilities
available thereunder due to the expiry of the Offer.
The
descriptions of the Support Agreement, the Loan Agreement, the Loan
Agreement Amendments and the Amended Loan Agreement do not purport to be complete and
are qualified in their entirety by reference to Exhibit 10.1 to Form 10-Q (File No. 001-01143)
filed July 26, 2006, Item 1.01 of and Exhibit 2.2 to Form 8-K (File No. 001-01143) filed July 20,
2006, Item 1.01 of and Exhibit 2.2 to Form 8-K (File No. 001-01143) filed June 30, 2006, Item 1.01
of and Exhibit 2.1 to Form 8-K (File No. 001-01143) filed May 15, 2006, Item 1.01 of and Exhibit
2.1 to Form 8-K (File No. 001-01143) filed March 24, 2006, Item 1.01 of Form 8-K (File No.
001-01143) filed January 20, 2006, and Item 1.01 of and Exhibit 2.1 to Form 8-K (File No.
001-01143) filed October 12, 2005 which are incorporated into this report by reference.
Important Legal Information
INVESTORS AND SECURITYHOLDERS ARE URGED TO READ INCO’S SOLICITATION/RECOMMENDATION STATEMENT ON
SCHEDULE 14D-9 THAT INCO FILED WITH THE SEC ON MAY 31, 2006, AND ANY AMENDMENTS INCO MAY FILE
THERETO, AS IT CONTAINS, AND SUCH AMENDMENTS, IF ANY, WILL CONTAIN, IMPORTANT INFORMATION REGARDING
TECK COMINCO’S PROPOSED COMBINATION WITH INCO.
This Form 8-K is not a solicitation of a proxy from any security holder of Inco or Phelps Dodge in
respect of Inco’s proposed combination with Phelps Dodge. Inco intends to file a Management
Information Circular regarding the proposed combination with the securities commissions or
equivalent regulatory authorities in Canada and to provide the Management Information Circular to
Inco shareholders and Phelps Dodge has filed a preliminary Proxy Statement on Schedule 14A
regarding the proposed combination with the SEC. WE URGE INVESTORS TO CAREFULLY READ THE
MANAGEMENT INFORMATION CIRCULAR, AND ANY AMENDMENTS INCO MAY FILE THERETO, WHEN IT BECOMES
AVAILABLE BECAUSE IT, AND ANY SUCH AMENDMENTS, IF ANY, WILL CONTAIN IMPORTANT INFORMATION ABOUT
INCO, PHELPS DODGE AND THE PROPOSED COMBINATION. WE URGE INVESTORS TO CAREFULLY READ THE PROXY
STATEMENT, AND ANY AMENDMENTS PHELPS DODGE MAY FILE THERETO, BECAUSE IT AND SUCH AMENDMENTS, IF
ANY, WILL CONTAIN IMPORTANT INFORMATION ABOUT INCO, PHELPS DODGE AND INCO’S PROPOSED COMBINATION
WITH PHELPS DODGE.
Inco, Phelps Dodge and their executive officers and directors may be deemed to be participants in
the solicitation of proxies from Inco and Phelps Dodge security holders in favor of Inco’s