ARMCO TO RECORD CHARGE OF $170 MILLION FOR INSURANCE
ARMCO TO RECORD CHARGE OF $170 MILLION FOR INSURANCE PARSIPPANY, N.J., Nov. 21 /PRNewswire/ -- Armco Inc. (NYSE: AS)
today announced that it would record a charge of $170 million in the fourth quarter related to the insurance companies which it intends to sell. The company said that a special committee of the board of directors had concluded reassessing the value that Armco carries on its balance sheet for these companies. The resulting charge would reflect a writedown to the net asset value of the insurance companies to be sold and would not require the use of cash. Armco currently values these companies at $303 million.
Previously, when Armco reported its third quarter results, the company indicated that a future charge was possible pending completion of the reassessment. Armco said that premium pricing was under severe pressure because of the current depressed market conditions in the property and casualty industry and that underwriting losses had increased consistent with recessionary conditions in the economy. As a result, the insurance companies to be sold lost money in the third quarter, are expected to report a loss in the fourth quarter and only be marginally profitable in 1992. Armco stated that its strategy is to sell these companies in the near term; but, because of the poor results and depressed industry conditions, it would be prudent to first enhance their profitability and then sell them as conditions in the industry improve. Armco Inc. produces stainless, electrical and carbon steels and steel products. Through joint ventures the company also produces coated and high-strength carbon flat-rolled steels and oilfield equipment and machinery. Insurance services are provided through businesses Armco intends to sell or liquidate. -0- 11/21/91 /CONTACT: James A. Herzog of Armco, 201-316-5276/ (AS) CO: Armco Inc. ST: New Jersey IN: MNG SU: TS -- NY014 -- 5723 11/21/91 08:57 EST
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|Date:||Nov 21, 1991|
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