Corco files plan to end bankruptcy One of the U.S. chemical industry's major failures of the past decade now has a detailed financial plan for a bailout, short of the Chapter X bankruptcy being pushed by the U.S. government. Commonwealth Oil Refining Co. (Corco) has filed a plan of arrange ment with the federal bankruptcy court in San Antonio, Tex., which is aimed at taking the beleaguered com pany out of Chapter XI bank ruptcy. For the past three years, Corco, Puerto Rico's largest refiner and petrochemical producer, has been struggling to emerge from bankrupt cy, coming up with one potential so lution after another and seeing them all dashed. Corco has tried previous plans, including takeovers by other companies such as Charter Co. and Arabian Seaoil Corp., only to see the glimmer fade. The thrash has been a melancholy end to the company's dreams of launching a full-fledged downstream chemical industry in Puerto Rico over the past two dec ades. The new plan, through the issuance of stock and other securities, offers the company's creditors effective control. In settling the claims, Corco will almost quadruple the number of shares of common stock outstanding, with a potential for a 750% increase in the number of shares. It also will issue a big block of debentures and war rants. Corco is now seeking creditor and stockholder approval of the plan. It has mailed out more than 40,000 copies of proxy and disclosure mate rials, describing the plan in detail. As of April 30, Corco had only 9.5 million shares of common stock out standing on a primary basis and 11.6 million shares on a fully diluted basis. Under the plan, Corco would issue 29.5 million shares of common stock to creditors. Up to an additional 33.1 million shares would be held in re serve for issuance upon conversion of various securities. Corco's creditors' prebankruptcy claims came to a whopping $1.3 bil lion. Corco now is offering to settle for a much smaller package: $92.3 million in cash; $115.9 million in secured notes; $31.1 million in new 10% con vertible debentures; $73.5 million in new debentures paying no interest, but convertible into Corco common stock at $4.50 per share or new de bentures paying 15% annually com
mencing in the third year after emergence from bankruptcy; 29.5 million shares of common stock val ued at $4.50 per share; and warrants to purchase an additional 10.3 million shares at an initial price of $5.50 per share. The plan also includes provisions for settlement of claims by PPG In dustries, W. R. Grace, and Caribe Isoprene by separate combinations of cash, notes, and various securities. A hearing will be held on June 18 to determine if unsecured creditors ac cept the plan. If they approve, Corco plans a special stockholders meeting on June 23 to vote on the proposal. Assuming approval by stockholders, Corco hopes to get confirmation of the plan by the bankruptcy court at a hearing on June 29. G
Allied to acquire electronics firm Allied Corp.'s acquisition of Bunker Ramo has been approved by the boards of directors of the two firms. Bunker Ramo manufactures elec agreemen and produces elec tronic connectors tronics systems for the banking, in surance, and securities industries. It also includes a textile division which makes fabrics for apparel, industrial, automotive, and consumer markets. The t between the two companies calls for Allied, formerly Allied Chemical, to begin a cash ten der offer for 1.175 million Bunker Ramo shares at $55 per share. Under certain circumstances, Allied will accept an additional 434,000 shares. The remaining Bunker Ramo shares will be exchanged on a share-
Electrical, chemical sales almost equal after merger
22.3% Chemicals
29.2% i Oil and gas
21.2% Electrical
18.6% Fibers and y plastics .
8.7°/λ lOtherX
Total comfeiinîd 1S8Q sales m $5.99 billion
for-share basis in a tax-free merger for a new Allied convertible preferred stock with a stated value of $55 per share and a dividend of $6.74. Allied says that it also will purchase for $55 per share 1.3 million shares of Bunker Ramo currently held by Fairchild Industries. The value of the merger is about $358 million. Bunker Ramo had net income in 1980 of $27.2 million on sales of $468 million. After the merger, Bunker Ramo will become part of Eltra, one of Allied's four operating companies. The deal means that electrical and electronics products are going to make up a lot more of Allied's sales. Based on 1980 sales figures at both companies, the merger will raise the electrical division's share of sales to 21.2% of the company's total from 14.5% before the merger. Chemicals' share of sales will drop to 22.3% from 24.2%, and the percentage contrib uted byfibersand plastics will fall to 18.6% from 20.2%. Even though both boards have approved the mefger, consummation is subject to approval by Bunker Ramo stockholders and to certain other conditions which the companies did not disclose. D
TDI precursors may affect male fertility Exposure of male workers to toluenediamine (TDA) or dinitrotoluene (DNT) may lead to reproductive dif ficulties, according to a small-scale study conducted by the National In stitute for Occupational Safety & Health of workers at Olin Corp.'s Brandenberg, Ky., chemical plant. The compounds are organic pre cursors of toluene diisocyanate, a key ingredient in flexible polyurethane foams. Olin is one of a half dozen or so U.S. companies that make the com pounds at about 15 locations. The NIOSH study is "suggestive of male reproductive toxicity from ex posure to TDA and/or DNT," ac cording to a report in the Center for Disease Control publication, Mor bidity and Mortality Weekly Report [30,199 (1981)]. Nine men who cur rently are exposed to the compounds in their work had a significantly re duced mean sperm count compared to nine control subjects who had never been exposed occupationally to the compounds. The men who worked with the compounds also had a sig nificant reduction in the percentage of large forms of sperm. May 18, 1981 C&EN
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News of the Week Changes in sperm count and in their shape and size sometimes are associated with exposure to chemicals and other agents that impair repro ductive ability in men. However, the exact effect that either reduced numbers of sperm or changes in their morphology may have on reproduc tion is not well understood. The study began in 1979 because of a complaint to the Occupational Safety & Health Administration from an employee at the Brandenberg plant that his wife was having diffi culty carrying a pregnancy to term. He was concerned, after conversa tions with his coworkers, that some thing in the workplace might be causing the problem. A physical ex amination by OSHA physicians
found the man had an abnormally low sperm count and unusual sperm morphology. Very little is known about the re productive effects of either DNT or TDA on animals or humans, NIOSH says. DNT does cause problems with blood forming, according to some animal studies, and TDA can be toxic to liver cells. Both are potential car cinogens based on long-term animal exposure studies. The Brandenberg study is very small, NIOSH says, and a larger one is needed in view of its findings. Olin is in the midst of such a study at its Lake Charles, La., facility. This study, which includes 60 exposed workers and 120 controls, is expected to be completed in a few weeks. D
Aerosol production slipp< i last year U.S. aerosol production decreased 9.8% in 1980 from the 1979 level, ac cording to the latest annual pressur ized products survey made by the Chemical Specialties Manufacturers Association. At CSMA's midyear meeting in Chicago, survey commit tee chairman George F. Ford of Phillips Chemical Co. revealed that slightly more than 2.16 billion "units" were filled in 1980, compared to just under 2.40 billion units in 1979. Aerosol production peaked at 2.90 billion units in 1973, the year the fluorocarbon-ozone controversy began. Production dropped in each of the following four years, to a 1977 low of 2.15 billion units, 26% below the 1973 peak. Producers scrambled to replace fluorocarbon propellants with less ecologically suspect substitutes;
U.S. aerosol production fell almost 10% in 1980 Billions of units
Source: Chemical Specialties Manufacturers Association
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C&ENMay 18, 1981
they also launched a publicity cam paign to convince consumers of the safety and utility of pressurized products. Production began to rise again, to 2.23 billion units in 1978 and 2.40 billion units in 1979. Although production dropped again last year—almost to the 1977 low—producers blame the decline on the state of the economy in 1980 and on heavy advertising of competing nonpressurized products; ozone is by now pretty much a dead issue, so far as aerosols are concerned. Despite the overall decline, some product categories grew in 1980. Coatings and finishes accounted for about 310 million units, a 2.8% in crease from 1979. Automotive prod ucts, with a little more than 170 mil lion units filled, increased 2.5%. In dustrial products, at nearly 140 million units, grew 4.4%. Personal products still were the largest category. But pressurized hair sprays, deodorants, shaving lathers, and such seem to be losing much of their appeal to consumers. Output in 1980 fell to only about 637 million units—down 17.5% from 1979, down 11.5% from the previous low of about 720 million units in 1977, and down a sharp 57.4% from the 1973 peak of 1.50 billion units. Production of pressurized insecti cides, at almost 150 million units, was down 24.7% from the 1979 level. That decline is a little misleading, because production had jumped 50% in 1979 as producers moved to rebuild in ventories that had been reduced by a 1978 shortage of pyrethrins. Actually, pressurized insecticide production grew an average 3.6% annually from 1971 to 1980. D
Science adviser rumor draws swift dissent Many members of President Rea gan's science and technology transi tion team are glum over the widely rumored appointment of Los Alamos physicist George A. Keyworth as White House science adviser. They feel that Keyworth is too little known to the science and engineering com munity at large and that someone with experience in science and in dustry is more appropriate to the job. Keyworth is a favored candidate and friend of Sen. Harrison Schmitt (R.-N.M.), who chairs the Senate Subcommittee on Science, Technol ogy & Space and sees himself as Congress' chief spokesman for science. Transition team sources are thus faced with a double disappoint ment. First, the Office of Science & Technology Policy was downgraded to only an indirect advisory body to the President. Second, the names they sent to the White House as can didates have fallen prey to old-fash ioned politics. "Schmitt put the destabilizing factor into the whole operation," says one source. The "operation" refers to the slow, patient process by which Republican scientific insiders were trying to help the White House find an individual high enough in stature but modest enough in ego to accept a second-tier White House post. An individual like Keyworth, however, is said to appeal to White House coun selor Edwin Meese, who consistently has stated he wants no specialists as senior advisers to the President. Keyworth, a "lesser known" figure in a second-level post, Meese is said to feel, would be perfect. Transition team members are hoping they can induce other White House staffers such as James Baker to ignore Schmitt's pressure and consider a couple of other "more worthy" names. They are Donald W. Collier, senior vice president for cor porate strategy at Borg-Warner Corp., and Donald J. Blickwede, vice president and director of research for Bethlehem Steel. "These people have demonstrated competency in both industrial and academic relationships so needed today," says one source. Neither has been interviewed by the White House. One individual who has been ap proached is Ralph E. Gomory, direc tor of research at IBM. But Gomory, along with a host of other industrial figures, said he wasn't interested. Π
