SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 6-K
REPORT OF FOREIGN PRIVATE ISSUER
PURSUANT TO RULE 13a-16 OR 15a-16 OF
THE SECURITIES EXCHANGE ACT OF 1934
Report on Form 6-K dated December 10, 2002
Partner Communications Company Ltd.
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(Translation of Registrant's Name Into English)
8 Amal Street
Afeq Industrial Park
Rosh Ha'ayin 48103
Israel
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(Address of Principal Executive Offices)
(Indicate by check mark whether the registrant files or will file
annual reports under cover of Form 20-F or Form 40-F.)
Form 20-F X Form 40-F
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(Indicate by check mark whether the registrant by furnishing the
information contained in this Form is also thereby furnishing the information to
the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of
1934.)
Yes No X
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(If "Yes" is marked, indicate below the file number assigned to the
registrant in connection with Rule 12g3-2(b): 82-__________)
THIS FORM 6-K IS INCORPORATED BY REFERENCE INTO THE COMPANY'S REGISTRATION
STATEMENT ON FORM F-3 FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON
DECEMBER 26, 2001 (REGISTRATION NO. 333-14222).
Enclosures: Notice and Proxy Statement re Extraordinary General Meeting of
Shareholders.
PARTNER COMMUNICATIONS COMPANY LTD.
NOTICE OF
EXTRAORDINARY GENERAL MEETING OF SHAREHOLDERS
Rosh Ha'ayin, Israel
December 10, 2002
Notice is hereby given that an Extraordinary General Meeting of
Shareholders (the "EGM") of Partner Communications Company Ltd. (the "Company"
or "Partner"), will be held on Tuesday, December 31, 2002 at 12:00 noon (Israel
time), at our offices, 8 Ha'amal Street, Rosh Ha'ayin, Israel or at any
adjournments thereof.
It is proposed at the EGM to adopt the following resolution:
to approve the execution, delivery and performance by the Company of
the Amending Agreement, together with its schedules, exhibits and other
ancillary documents related to the Amending Agreement, and the terms
and conditions thereof.
Only shareholders of record at the close of business on December 10,
2002 are entitled to receive notice of, and to vote at the EGM, subject to the
restrictions in the Company's Articles of Association, as set forth in the
attached Proxy Statement. All shareholders are cordially invited to attend the
EGM in person.
Shareholders who will not attend the EGM in person are requested to
complete, date and sign the enclosed form of proxy and to return it promptly
(and in any event at least two business days prior to the date of the EGM) in
the pre-addressed envelope provided. Shareholders may revoke their proxies by
written notice received at the offices of the Company prior to the commencement
of the EGM, and vote their shares in person.
The Articles of Association of the Company also allow shareholders of
the Company to vote at the EGM by means of a deed of vote and a form of deed of
vote will be made available to shareholders registered in the Company's
Shareholder Register on the record. Holders of American Depositary Shares are
not registered in the Company's Shareholder Register but may instruct the
Depositary, JPMorgan Chase Bank, as to the exercise of the voting rights
pertaining to the Ordinary Shares evidenced by their American Depositary Shares,
in the manner and to the extent provided in the Depositary Agreement governing
the American Depositary Shares.
Registered joint holders of shares should take note that, pursuant to
the Articles of Association of the Company, only the first named joint holder of
any share shall vote, either in person, by proxy, or by deed of vote, without
taking into account the other registered joint holder(s) of the share. For this
purpose, the first named joint holder shall be the person whose name is
registered first in the Shareholder Register.
Copies of the proposed resolutions are available at our offices, 8 Ha'amal
Street, Rosh Ha'ayin, Israel, every business day from 9 AM to 5 PM (Israel
time). Our telephone number is +972-67-814191.
BY ORDER OF THE BOARD OF DIRECTORS
ROLY KLINGER, ADV.
GENERAL COUNSEL AND JOINT
COMPANY SECRETARY
PARTNER COMMUNICATIONS COMPANY LTD.
8 HA'AMAL STREET
ROSH HA'AYIN 48092, ISRAEL
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PROXY STATEMENT
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This Proxy Statement is furnished to the holders of ordinary shares,
par value NIS 0.01 per share (the "Ordinary Shares"), of Partner Communications
Company Ltd. ("Partner" or the "Company") in connection with the solicitation by
the Board of Directors of proxies for use at an Extraordinary General Meeting of
Shareholders (the "EGM") to be held on Tuesday, December 31, 2002 at 12:00 noon
(Israel time) at our offices, 8 Ha'amal Street, Rosh Ha'ayin, Israel, or at any
adjournments thereof.
It is proposed at the EGM to adopt a resolution approving Partner's
entering into an Amending Agreement (together with its schedules, exhibits and
other ancillary documents related to the agreement, including exhibit 1 to the
Amending Agreement, which contains the Amended and Restated Facility Agreement,
the "Amending Agreement") amending our existing senior credit facility. The
Amending Agreement will enter into effect upon the fulfillment of certain
conditions precedent including the approval of our shareholders.
A form of proxy for use at the EGM and a return envelope for the proxy
are enclosed. Shareholders may revoke their proxies by written notice received
at the offices of the Company prior to the EGM and vote their shares in person.
Ordinary Shares represented by any proxy in the enclosed form, if the proxy is
properly executed and delivered to the Company at least two business days prior
to the date of the EGM, will be voted as indicated on the form or, if no
preference is noted, will be voted in favor of the matters described above.
Proxies for use at the EGM are being solicited by the Board of
Directors of the Company. Only shareholders of record at the close of business
on December 10, 2002 will be entitled to receive notice of, and to vote at the
EGM. Proxies are being mailed to shareholders on or about December 10, 2002 and
will be solicited primarily by mail; however, certain of our officers,
directors, employees and agents, none of whom will receive additional
compensation therefore, may solicit proxies by telephone, telegram or other
personal contact. The Company will bear the cost of the solicitation of the
proxies by the Board of Directors, including postage, printing and handling, and
will reimburse the reasonable expenses of brokerage firms and others for
forwarding material to beneficial owners of Ordinary Shares.
On December 10, 2002 the Company had outstanding 181,521,596 Ordinary
Shares. The holder of each Ordinary Share is entitled to one vote upon each of
the matters to be presented at the EGM. Two or more shareholders holding
Ordinary Shares conferring in the aggregate at least one-third of our voting
rights, present in person or by proxy at the EGM, or who have delivered to us a
deed of vote, and entitled to vote, will constitute a quorum at the EGM.
AMENDING AGREEMENT
As a result of recent developments in the Company's business,
specifically the future plans for the establishment of third generation wireless
telecommunications services, the Company conducted negotiations with the
representatives of the banks in order to conform the terms of its credit
facility to the expected changes in its business. We believe that the amended
credit facility provide the Company with better repayment profile and will
enable the Company to operate under more flexible financial conditions.
Accordingly, we intend to enter into the Amending Agreement, which
amends our existing credit facility (the "Credit Facility") with a group of
Israeli banks and Citibank N.A., with Bank Leumi Le-Israel B.M. serving as
facility agent, arranger and security trustee. The Amending Agreement is subject
to certain conditions precedent including the approval of our shareholders.
Certain controlling persons of principal shareholders of Partner are also,
indirectly, part of the controlling group of shareholders of Bank Hapoalim B.M.,
which is a participating bank in the Credit Facility. Under the amended Credit
Facility, Bank Hapoalim B.M. is also being appointed as coordinating agent.
Our existing Credit Facility is divided into two tranches: a
multicurrency term loan facility of $600 million, which may be reduced to $550
million if we do not meet certain milestones ("Facility A") and a revolving
multicurrency loan facility of $150 million ("Facility B"). Our amended Credit
Facility will be divided into three tranches: a $410 million term loan facility
under Facility A, $150 million revolving loan facility under Facility B and a
new $150 million term loan facility ("Facility C").
Facilities A and B of our Credit Facility may be drawn in NIS, US
dollars or Euros, provided that not less than 60% of the outstanding Facilities
A and B advances, at any time, be in NIS and that only up to 40% of the
outstanding Facilities A and B advances may be drawn in US dollars or Euros.
Facility C may be drawn only in NIS.
Under the amended Credit Facility, Facility A is available for drawing
until March 31, 2003, Facility B is available for drawing until June 30, 2008
and the Facility C is available for drawing until December 31, 2004. Previously,
Facility A was available for drawing until June 30, 2002 and was extended to
December 31, 2002.
According to the amended Credit Facility, repayment under Facility A
begins on March 31, 2003 and continues until June 30, 2008, repayment under
Facility B will be on June 30, 2008 and repayment under Facility C begins on
March 31, 2005 and continues until June 30, 2009. Under the Credit Facility,
full repayment was required by June 30, 2008.
At November 30, 2002, under the current Credit Facility, we had drawn
$479 million under Facility A and $36 million under Facility B.
Under the amended Credit Facility, drawdowns under each of the
Facilities must be pro rata among the participating banks. We will have
twenty-one days to correct a deviation from the foregoing with respect to
Facility A and Facility C. With respect to Facility B, our commitment to draw
down pro rata will be measured as of the end of each quarter.
Under the amended Credit Facility, we shall apply all amounts borrowed
by us under the Facilities for the purposes of: (i) financing the purchase of
equipment, maintenance expenses, operating losses and daily operating expenses
properly incurred in the establishment and operation of a wireless telephone
service, as contemplated by our licence, and the financing of our working
capital needs for our business, as well as for the establishment and operation
of two and-a-half and third generation wireless telephone services, all as
contemplated in the version of our business plan delivered to the banks upon the
execution of the Amending Agreement; and (ii) the subscription or acquisition of
such share or loan capital in companies which carry on business in the
telecommunications sector, in accordance with the terms of the Amending
Agreement.
MARGIN
Under the current Credit Facility the margin is 0.90% per annum and is
subject to variation thereafter from 0.90% down to 0.45% depending on the actual
number of our subscribers, a ratio of EBITDA (earning before interest, taxes,
depreciation and amortization) before SAC (subscriber acquisition costs) to
Total Debt (as defined in the Facility Agreement), and a ratio of Surplus to
Scheduled Debt (as defined in the Facility Agreement).
Under the amended Credit Facility, with respect to Facility A and
Facility B the margin remains 0.90% per annum but may be reduced prior to the
end of 2006 to 0.70% if we exceed certain financial covenants by at least 35%,
and to 0.45% if we exceed certain financial covenants by at least 75%, in both
cases provided that we repaid at least 50% of our total commitments under the
amended Credit Facility. Beginning in 2007, no reduction in margin will be made
under Facility A and Facility B unless already reduced in 2006. The relevant
financial covenants are, with respect to the relevant one-year ratio period,
Facility Debt Coverage Ratio, Total Debt Coverage Ratio, Fixed Charge Coverage
Ratio and ADSCR (all as defined below). The margin with respect to Facility C is
1.25% per annum and may not be reduced. In addition, so long as an Event of
Default continues (as defined in the Facility Agreement), the margin with
respect to each Facility will be increased by an additional 2% per annum.
FEES UNDER FACILITY C
We are required to pay a 0.3% up-front fee with respect to Facility C.
In addition, we shall pay to the banks a commitment commission at the rate of
0.35% per annum of the undrawn commitments under Facility C. The commitment
commission rates with respect to Facility A and Facility B are not amended by
the Amending Agreement, but will be calculated based on total utilization of
Facilities A and B together.
FINANCIAL COVENANTS
The amended Credit Facility requires Partner to meet the following
financial covenants, to be measured annually and for the first half of each
year:
o "Fixed Charge Coverage Ratio" (EBITDA after SAC, divided by the
sum of debt service, capital expenditures and tax payments).
o "Facility Debt Coverage Ratio" (EBITDA after SAC, divided by the
aggregate advances made under the Credit Facility).
o "Total Debt Coverage Ratio"((EBITDA after SAC, divided by Total
Debt (as defined in the Facility Agreement)).
o "ADSCR" ((EBITDA after SAC divided by Debt Service (as defined in
the Facility Agreement)).
Deviation of up to 5% is permitted in ADSCR and in any one of the other
three covenants in each ratio period, provided such deviation is not repeated in
any three following ratio periods. The above deviations are permitted only for
purposes of determining whether the financial covenants have been breached.
DIVIDEND RESTRICTIONS AND SHARE PLEDGES
The Credit Facility prohibits any payment of dividends or any other
similar payments on our ordinary shares or repayment of principal on
subordinated loans or shareholders' loans, or payments to shareholders generally
by way of return or repurchase of capital other than by way of a permitted
distribution. In addition, under the Credit Facility the principal shareholders
are required to pledge in favor of the Security Trustee shares constituting 51%
of the total issued share capital of Partner during the term of the Credit
Facility. Under the amended Credit Facility, in the event that Partner meets the
following financial conditions, a permitted distribution will be permitted and
shares pledged by the principal shareholders under the share pledges may be
released:
o During the years 2003-2007, each of the Facility Debt Coverage
Ratio, Total Debt Coverage Ratio, Fixed Charge Coverage Ratio and
ADSCR for the preceding one year ratio period shall exceed the
financial covenants by at least 35% of such minimum ratio
required for such period. In the year 2008, the Total Debt
Coverage Ratio for the year 2007 shall be not less than 135%, and
in the year 2009, the Total Debt Coverage Ratio for the year 2008
shall be not less than 280%; and
o Partner should have repaid to the participating banks an amount
equal to half the amount of our total commitments under the
amended Credit Facility.
The Amending Agreement has been approved by Partner's audit committee
and board of directors, and is now submitted to the shareholders for approval.
It is proposed, in accordance with the Israeli Companies Law, 1999 (the
"Companies Law"), that at the EGM the following resolution be adopted:
"RESOLVED, to approve the execution, delivery and performance by the
Company of the Amending Agreement, together with its schedules, exhibits and
other ancillary documents related to the Amending Agreement, and the terms and
conditions thereof."
Under the Companies Law, an extraordinary transaction of a company in
which a controlling shareholder has a personal interest requires the approval of
the company's audit committee, board of directors and shareholders. The approval
of the shareholders must comply with the special conditions set forth below.
Because of the amendments to the terms of permitted distribution and the release
of share pledges of our principal shareholders, the Amending Agreement may be
considered such a transaction.
Under Section 268 of the Companies Law, two or more persons who hold
voting rights in a company and each of whom has a personal interest in the
approval of the same transaction up for approval by the said company shall be
deemed as one holder. Also, Section 268 states that a person who holds 25% or
more of the voting rights at a company's general meeting (if there is no other
person who holds more than 50% of these voting rights) is deemed a "controlling
party." As a result, one or more of our principal shareholders may be deemed,
for the sake of being cautious, a controlling party with a personal interest in
the Amending Agreement. Therefore, the approval of the above resolution may
require a special majority of the shareholders of the Company (the "Special
Majority").
A Special Majority requires the affirmative vote of the holders of a
majority of the Ordinary Shares present, in person or by proxy, and voting on
the matter for the approval thereof, provided that either (a) the majority of
the Ordinary Shares voted at the meeting includes at least one-third of the
Ordinary Shares voted by shareholders who do not have a personal interest in the
matter; or (b) the total Ordinary Shares of the shareholders referred to in
clause (a) voted against the matter does not exceed one percent of the aggregate
voting rights of the Company. For this purpose, each shareholder is asked to
indicate on the enclosed proxy card whether or not he has a personal interest in
this matter, at least two business days prior to the date of the EGM, as a
condition for his right to vote and be counted with respect to such resolutions.
Under the Companies Law, a "Personal Interest" of a shareholder (i)
includes a personal interest of any members of the shareholder's immediate
family (or spouses thereof) or a personal interest of an entity in which the
shareholder (or such family member thereof) serves as a director or the CEO,
owns at least 5% of its issued share capital or its voting rights or has the
right to appoint a director or the CEO and (ii) excludes an interest arising in
itself from the ownership of shares in any company.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR APPROVAL OF THE
PROPOSED RESOLUTION.
RESTRICTIONS ON VOTING RIGHTS
Partner conducts its operations pursuant to a license granted to
Partner by the Minister of Communications of the State of Israel. Partner's
Articles of Association and, with respect to shareholders other than
shareholders of Partner prior to its public offering, Partner's license contain
provisions that may cause the suspension of voting rights of the holders of
Ordinary Shares or ADSs if such voting rights would breach the ownership limits
contained in our license. These limits prohibit the transfer or acquisition of
10% or more of Partner's means of control and acquisition of control of the
Company without the consent of the Minister of Communications in Israel, and
restrict cross-control and cross-ownership of other mobile telephone operators
in Israel, and shareholdings and agreements which may reduce or harm
competition. Ordinary Shares or Ordinary Shares represented by ADSs held in
breach of these limits may be considered as dormant shares. Notwithstanding
anything to the contrary in this Proxy Statement, dormant shares will not bear
any rights to which the holders would otherwise be entitled, other than the
right to receive dividends and other distributions to shareholders (including
the right to participate in rights offerings). Specifically, the holders of
dormant shares will not have voting rights with respect to their dormant shares,
nor will they have the right to participate in general meetings of shareholders.
Any shareholder seeking to vote at the EGM must notify the Company
prior to the vote, or, if the vote is by deed of vote, must so indicate on the
deed of vote, if any of the shareholder's holdings in Partner or the
shareholder's vote requires the consent of the Minister of Communications due to
a breach by the shareholder of the restrictions on the transfer or acquisition
of means of control or acquisition of control of Partner, or the provisions
regarding cross-ownership or cross-control of other mobile telephone operators
in Israel, in each case as specified in sections 21 and 23 of Partner's license.
If a shareholder does not provide such notification, the shareholder shall not
vote and, if the shareholder has voted, his or her vote shall not be counted.
BY ORDER OF THE BOARD OF DIRECTORS
ROLY KLINGER, ADV.
General Counsel and Joint Company Secretary
Dated: December 10, 2002
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this Current Report to be signed on its behalf by
the undersigned, thereunto duly authorized.
Partner Communications Company Ltd.
By /s/ Alan Gelman
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Name: Alan Gelman
Title: Chief Financial Officer
Dated: December 10, 2002