SECURITIES & EXCHANGE COMMISSION
Washington, D.C. 20549
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SCHEDULE 13G
(Rule 13d-102)
INFORMATION TO BE INCLUDED IN STATEMENTS FILED PURSUANT
TO RULES 13d-1(b), (c) AND (d) AND AMENDMENTS THERETO FILED
PURSUANT TO 13d-2(b)
(Amendment No. 2)*
Terra Industries Inc.
(Name of Issuer)
Common Stock, without par value
(Title of Class of Securities)
880915103
(CUSIP Number)
August 1, 2006
(Date of event which requires filing of this statement)
Check the appropriate box to designate the rule pursuant to which this
Schedule 13G is filed:
[ ] Rule 13d-1(b)
[X] Rule 13d-1(c)
[ ] Rule 13d-1(d)
(Page 1 of 13 Pages)
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*The remainder of this cover page shall be filled out for a reporting
person's initial filing on this form with respect to the subject class of
securities, and for any subsequent amendment containing information which would
alter the disclosures provided in a prior cover page.
The information required in the remainder of this cover page shall not be
deemed to be "filed" for purposes of Section 18 of the Securities Exchange Act
of 1934 ("Act") or otherwise subject to the liabilities of that section of the
Act but shall be subject to all other provisions of the Act (however, see the
Notes).
CUSIP No. 880915103 13G/A Page 2 of 13 Pages
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(1) NAMES OF REPORTING PERSONS
I.R.S. IDENTIFICATION NO.
OF ABOVE PERSONS (ENTITIES ONLY)
SAB CAPITAL PARTNERS, L.P.
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(2) CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP **
(a) [X]
(b) [ ]
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(3) SEC USE ONLY
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(4) CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
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NUMBER OF (5) SOLE VOTING POWER
-0-
SHARES --------------------------------------------------------------
BENEFICIALLY (6) SHARED VOTING POWER
4,598,037
OWNED BY --------------------------------------------------------------
EACH (7) SOLE DISPOSITIVE POWER
-0-
REPORTING --------------------------------------------------------------
PERSON WITH (8) SHARED DISPOSITIVE POWER
4,598,037
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(9) AGGREGATE AMOUNT BENEFICIALLY OWNED
BY EACH REPORTING PERSON
4,598,037
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(10) CHECK BOX IF THE AGGREGATE AMOUNT
IN ROW (9) EXCLUDES CERTAIN SHARES ** [ ]
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(11) PERCENT OF CLASS REPRESENTED
BY AMOUNT IN ROW (9)
4.9%
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(12) TYPE OF REPORTING PERSON **
PN
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** SEE INSTRUCTIONS BEFORE FILLING OUT!
CUSIP No. 880915103 13G/A Page 3 of 13 Pages
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(1) NAMES OF REPORTING PERSONS
I.R.S. IDENTIFICATION NO.
OF ABOVE PERSONS (ENTITIES ONLY)
SAB CAPITAL PARTNERS II, L.P.
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(2) CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP **
(a) [X]
(b) [ ]
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(3) SEC USE ONLY
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(4) CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
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NUMBER OF (5) SOLE VOTING POWER
-0-
SHARES --------------------------------------------------------------
BENEFICIALLY (6) SHARED VOTING POWER
95,323
OWNED BY --------------------------------------------------------------
EACH (7) SOLE DISPOSITIVE POWER
-0-
REPORTING --------------------------------------------------------------
PERSON WITH (8) SHARED DISPOSITIVE POWER
95,323
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(9) AGGREGATE AMOUNT BENEFICIALLY OWNED
BY EACH REPORTING PERSON
95,323
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(10) CHECK BOX IF THE AGGREGATE AMOUNT
IN ROW (9) EXCLUDES CERTAIN SHARES ** [ ]
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(11) PERCENT OF CLASS REPRESENTED
BY AMOUNT IN ROW (9)
0.1%
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(12) TYPE OF REPORTING PERSON **
PN
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** SEE INSTRUCTIONS BEFORE FILLING OUT!
CUSIP No. 880915103 13G/A Page 4 of 13 Pages
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(1) NAMES OF REPORTING PERSONS
I.R.S. IDENTIFICATION NO.
OF ABOVE PERSONS (ENTITIES ONLY)
SAB OVERSEAS MASTER FUND, L.P.
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(2) CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP **
(a) [X]
(b) [ ]
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(3) SEC USE ONLY
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(4) CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
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NUMBER OF (5) SOLE VOTING POWER
-0-
SHARES --------------------------------------------------------------
BENEFICIALLY (6) SHARED VOTING POWER
4,803,340
OWNED BY --------------------------------------------------------------
EACH (7) SOLE DISPOSITIVE POWER
-0-
REPORTING --------------------------------------------------------------
PERSON WITH (8) SHARED DISPOSITIVE POWER
4,803,340
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(9) AGGREGATE AMOUNT BENEFICIALLY OWNED
BY EACH REPORTING PERSON
4,803,340
-----------------------------------------------------------------------------
(10) CHECK BOX IF THE AGGREGATE AMOUNT
IN ROW (9) EXCLUDES CERTAIN SHARES ** [ ]
-----------------------------------------------------------------------------
(11) PERCENT OF CLASS REPRESENTED
BY AMOUNT IN ROW (9)
5.2%
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(12) TYPE OF REPORTING PERSON **
PN
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** SEE INSTRUCTIONS BEFORE FILLING OUT!
CUSIP No. 880915103 13G/A Page 5 of 13 Pages
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(1) NAMES OF REPORTING PERSONS
I.R.S. IDENTIFICATION NO.
OF ABOVE PERSONS (ENTITIES ONLY)
SAB CAPITAL ADVISORS, L.L.C.
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(2) CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP **
(a) [X]
(b) [ ]
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(3) SEC USE ONLY
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(4) CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
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NUMBER OF (5) SOLE VOTING POWER
-0-
SHARES --------------------------------------------------------------
BENEFICIALLY (6) SHARED VOTING POWER
9,496,700
OWNED BY --------------------------------------------------------------
EACH (7) SOLE DISPOSITIVE POWER
-0-
REPORTING --------------------------------------------------------------
PERSON WITH (8) SHARED DISPOSITIVE POWER
9,496,700
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(9) AGGREGATE AMOUNT BENEFICIALLY OWNED
BY EACH REPORTING PERSON
9,496,700
-----------------------------------------------------------------------------
(10) CHECK BOX IF THE AGGREGATE AMOUNT
IN ROW (9) EXCLUDES CERTAIN SHARES ** [ ]
-----------------------------------------------------------------------------
(11) PERCENT OF CLASS REPRESENTED
BY AMOUNT IN ROW (9)
10.2%
-----------------------------------------------------------------------------
(12) TYPE OF REPORTING PERSON **
OO
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** SEE INSTRUCTIONS BEFORE FILLING OUT!
CUSIP No. 880915103 13G/A Page 6 of 13 Pages
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(1) NAMES OF REPORTING PERSONS
I.R.S. IDENTIFICATION NO.
OF ABOVE PERSONS (ENTITIES ONLY)
Scott A. Bommer
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(2) CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP **
(a) [X]
(b) [ ]
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(3) SEC USE ONLY
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(4) CITIZENSHIP OR PLACE OF ORGANIZATION
United States of America
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NUMBER OF (5) SOLE VOTING POWER
-0-
SHARES --------------------------------------------------------------
BENEFICIALLY (6) SHARED VOTING POWER
9,496,700
OWNED BY --------------------------------------------------------------
EACH (7) SOLE DISPOSITIVE POWER
-0-
REPORTING --------------------------------------------------------------
PERSON WITH (8) SHARED DISPOSITIVE POWER
9,496,700
-----------------------------------------------------------------------------
(9) AGGREGATE AMOUNT BENEFICIALLY OWNED
BY EACH REPORTING PERSON
9,496,700
-----------------------------------------------------------------------------
(10) CHECK BOX IF THE AGGREGATE AMOUNT
IN ROW (9) EXCLUDES CERTAIN SHARES ** [ ]
-----------------------------------------------------------------------------
(11) PERCENT OF CLASS REPRESENTED
BY AMOUNT IN ROW (9)
10.2%
-----------------------------------------------------------------------------
(12) TYPE OF REPORTING PERSON **
IN
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** SEE INSTRUCTIONS BEFORE FILLING OUT!
CUSIP No. 880915103 13G/A Page 7 of 13 Pages
The Schedule 13G/A filed on February 14, 2006 is hereby amended and
restated by this Amendment No.2 to the Schedule 13G/A.
Item 1(a). Name of Issuer:
The name of the issuer is Terra Industries Inc. (the "Company").
Item 1(b). Address of Issuer's Principal Executive Offices:
The Company's principal executive office is located at Terra Centre, 600
Fourth Street, P.O. Box 6000, Sioux City, Iowa 51102
Item 2(a). Name of Person Filing:
This statement is filed by:
(i) SAB Capital Partners, L.P., a Delaware limited partnership
("SAB"), with respect to shares of Common Stock (as defined in
Item 2(d) below) directly owned by it;
(ii) SAB Capital Partners II, L.P., a Delaware limited partnership
("SAB II", and together with SAB, the "Domestic
Partnerships"),with respect to shares of Common Stock (as
defined in Item 2(d) below) directly owned by it;
(iii) SAB Overseas Master Fund, L.P., a Cayman Islands exempted
limited partnership (the "Master Fund"), with respect to
shares of Common Stock (as defined in Item 2(d) below)
directly owned by it;
(iv) SAB Capital Advisors, L.L.C., a Delaware Limited Liability
Company (the "General Partner"), which serves as the general
partner of each of the Domestic Partnerships and the Master
Fund, with respect to shares of Common Stock (as defined in
Item 2(d) below) directly owned by each of the Partnerships
and the Master Fund;
(v) Mr. Scott A. Bommer ("Mr. Bommer"), who serves as the managing
member of the General Partner with respect to shares of Common
Stock directly owned by the Domestic Partnerships and the Master
Fund.
The Domestic Partnerships, the Master Fund, the General Partner, and Mr.
Bommer are hereinafter sometimes collectively referred to as the "Reporting
Persons." Any disclosures herein with respect to persons other than the
Reporting Persons are made on information and belief after making inquiry to the
appropriate party.
CUSIP No. 880915103 13G/A Page 8 of 13 Pages
Item 2(b). Address of Principal Business Office or, if None, Residence:
The address of the business office of each of the Reporting Persons is 712
Fifth Avenue, 42nd Floor, New York, N.Y. 10019.
Item 2(c). Citizenship:
Each of the Domestic Partnerships and the General Partner, is organized
under the laws of the State of Delaware. The Master Fund is an exempted limited
partnership organized under the laws of the Cayman Islands. Mr. Bommer is a
citizen of the United States of America.
Item 2(d). Title of Class of Securities:
Common Stock, without par value (the "Common Stock")
Item 2(e). CUSIP Number:
880915103
Item 3. If this statement is filed pursuant to Rules 13d-1(b) or 13d-2(b) or
(c), check whether the person filing is a:
(a) [ ] Broker or dealer registered under Section 15 of the
Act,
(b) [ ] Bank as defined in Section 3(a)(6) of the Act,
(c) [ ] Insurance Company as defined in Section 3(a)(19) of
the Act,
(d) [ ] Investment Company registered under Section 8 of the
Investment Company Act of 1940,
(e) [ ] Investment Adviser in accordance with Rule
13d-1(b)(1)(ii)(E),
(f) [ ] Employee Benefit Plan or Endowment Fund in accordance
with Rule 13d-1(b)(1)(ii)(F),
(g) [ ] Parent Holding Company or control person in accordance
with Rule 13d-1(b)(1)(ii)(G),
(h) [ ] Savings Association as defined in Section 3(b) of the
Federal Deposit Insurance Act,
(i) [ ] Church Plan that is excluded from the definition of an
investment company under Section 3(c)(14) of the Investment
Company Act of 1940,
(j) [ ] Group, in accordance with Rule 13d-1(b)(1)(ii)(J).
If this statement is filed pursuant to 13d-1(c), check this box: [X]
CUSIP No. 880915103 13G/A Page 9 of 13 Pages
Item 4. Ownership.
A. SAB Capital Partners, L.P.
(a) Amount beneficially owned: 4,598,037
(b) Percent of class: 4.9%
The percentages used herein and in the
rest of this Schedule 13G/A are calculated based upon the
93,214,574 shares of Common Stock issued
and outstanding on July 24, 2006, as reflected in the
Company's Form 10Q for the period ended June 30, 2006.
(c) Number of shares as to which such person has:
(i) Sole power to vote or direct the vote: -0-
(ii) Shared power to vote or direct the vote: 4,598,037
(iii) Sole power to dispose or direct the disposition: -0-
(iv) Shared power to dispose or direct the disposition: 4,598,037
B. SAB Capital Partners II, L.P.
(a) Amount beneficially owned: 95,323
(b) Percent of class: 0.1%
(c) Number of shares as to which such person has:
(i) Sole power to vote or direct the vote: -0-
(ii) Shared power to vote or direct the vote: 95,323
(iii) Sole power to dispose or direct the disposition: -0-
(iv) Shared power to dispose or direct the disposition: 95,323
C. SAB Overseas Master Fund, L.P.
(a) Amount beneficially owned: 4,803,340
(b) Percent of class: 5.2%
(c) Number of shares as to which such person has:
(i) Sole power to vote or direct the vote: -0-
(ii) Shared power to vote or direct the vote: 4,803,340
(iii) Sole power to dispose or direct the disposition: -0-
(iv) Shared power to dispose or direct the disposition: 4,803,340
D. SAB Capital Advisors, L.L.C.
(a) Amount beneficially owned: 9,496,700
(b) Percent of class: 10.2%
(c) Number of shares as to which such person has:
(i) Sole power to vote or direct the vote: -0-
(ii) Shared power to vote or direct the vote: 9,496,700
(iii) Sole power to dispose or direct the disposition: -0-
(iv) Shared power to dispose or direct the disposition: 9,496,700
CUSIP No. 880915103 13G/A Page 10 of 13 Pages
E. Scott A. Bommer
(a) Amount beneficially owned: 9,496,700
(b) Percent of class: 10.2%
(c) Number of shares as to which such person has:
(i) Sole power to vote or direct the vote: -0-
(ii) Shared power to vote or direct the vote: 9,496,700
(iii) Sole power to dispose or direct the disposition: -0-
(iv) Shared power to dispose or direct the disposition: 9,496,700
Item 5. Ownership of Five Percent or Less of a Class.
Not applicable.
Item 6. Ownership of More than Five Percent on Behalf of Another Person.
Not applicable.
Item 7. Identification and Classification of the Subsidiary Which Acquired
the Security Being Reported on by the Parent Holding Company.
Not applicable.
Item 8. Identification and Classification of Members of the Group.
See Item 2.
Item 9. Notice of Dissolution of Group.
Not applicable.
CUSIP No. 880915103 13G/A Page 11 of 13 Pages
Item 10. Certification.
Each of the Reporting Persons hereby makes the following certification:
By signing below I certify that, to the best of my knowledge and belief,
the securities referred to above were not acquired and are not held for the
purpose of or with the effect of changing or influencing the control of the
issuer of the securities and were not acquired and are not held in connection
with or as a participant in any transaction having that purpose or effect.
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, I certify
that the information set forth in this statement is true, complete and correct.
DATED: August 10, 2006
/s/ Michael Casey
-------------------------------------
Michael Casey, attorney-in-fact for
Scott A. Bommer, individually and as managing
member of SAB Capital Advisors, L.L.C.,
for itself and as the general partner of
(i) SAB Capital Partners, L.P. and
(ii) SAB Capital Partners II, L.P.; and
(iii) SAB Overseas Master Fund, L.P.
CUSIP No. 880915103 13G/A Page 12 of 13 Pages
EXHIBIT 1
JOINT ACQUISITION STATEMENT
PURSUANT TO RULE 13d-1(k)
The undersigned acknowledge and agree that the foregoing statement on
Schedule 13G, is filed on behalf of each of the undersigned and that all
subsequent amendments to this statement on Schedule 13G, shall be filed on
behalf of each of the undersigned without the necessity of filing additional
joint acquisition statements. The undersigned acknowledge that each shall be
responsible for the timely filing of such amendments, and for the completeness
and accuracy of the information concerning him or it contained therein, but
shall not be responsible for the completeness and accuracy of the information
concerning the others, except to the extent that he or it knows or has reason to
believe that such information is inaccurate.
DATED: August 10, 2006
/s/ Michael Casey
-------------------------------------
Michael Casey, attorney-in-fact for
Scott A. Bommer, individually and as managing
member of SAB Capital Advisors, L.L.C.,
for itself and as the general partner of
(i) SAB Capital Partners, L.P. and
(ii) SAB Capital Partners II, L.P.; and
(iii) SAB Overseas Master Fund, L.P.
CUSIP No. 880915103 13G/A Page 13 of 13 Pages
EXHIBIT 2
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENT, that I, Scott A. Bommer, hereby make,
constitute and appoint each of Michael Casey, Brian Jackelow and Alessandro De
Giorgis, acting individually, as my agent and attorney-in-fact for the purpose
of executing in my name, (a) in my personal capacity or (b) in my capacity as
managing member of or in other capacities with SAB Capital Advisors, L.L.C., a
Delaware limited liability company, and each of its affiliates or entities
advised or controlled by me or SAB Capital Advisors, L.L.C., all documents,
certificates, instruments, statements, filings and agreements ("documents") to
be filed with or delivered to any foreign or domestic governmental or regulatory
body or required or requested by any other person or entity pursuant to any
legal or regulatory requirement relating to the acquisition, ownership,
management or disposition of securities, futures contracts or other investments,
and any other documents relating or ancillary thereto, including, without
limitation, all documents relating to filings with the United States Securities
and Exchange Commission (the "SEC") pursuant to the Securities Act of 1933, as
amended, or the Securities Exchange Act of 1934, as amended (the "Act"), and the
rules and regulations promulgated thereunder, including, without limitation: (1)
all documents relating to the beneficial ownership of securities required to be
filed with the SEC pursuant to Section 13(d) or Section 16(a) of the Act,
including, without limitation: (a) any acquisition statements on Schedule 13D or
Schedule 13G and any amendments thereto, (b) any joint filing agreements
pursuant to Rule 13d-1(k), and (c) any initial statements of, or statements of
changes in, beneficial ownership of securities on Form 3, Form 4 or Form 5 and
(2) any information statements on Form 13F required to be filed with the SEC
pursuant to Section 13(f) of the Act.
All past acts of these attorneys-in-fact in furtherance of the foregoing
are hereby ratified and confirmed.
This Power of Attorney shall remain in effect until revoked, in writing, by
the undersigned.
IN WITNESS WHEREOF, the undersigned has executed this Power of Attorney,
this 9th day of August 2006.
/s/ Scott A. Bommer
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Scott A. Bommer