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EDISTO ANNOUNCES TENTATIVE SETTLEMENT OF LAWSUIT AND PARTIAL REDEMPTION OF PREFERRED STOCK

EDISTO ANNOUNCES TENTATIVE SETTLEMENT OF LAWSUIT AND PARTIAL REDEMPTION
 OF PREFERRED STOCK
 DALLAS, June 25 /PRNewswire/ -- Edisto Resources Corporation (AMEX: EDS) today announced that it has entered into an agreement tentatively settling the pending lawsuit seeking to compel Edisto and its directors to redeem the 208,087 outstanding shares of Edisto's $2.60 senior cumulative convertible stock (AMEX: EDSpr) for shares of Edisto's common stock.
 Pursuant to the settlement agreement, Edisto will redeem approximately 32 percent of the outstanding preferred stock, or approximately 66,500 shares of preferred stock, on July 22, 1992. The redemption price of approximately $20.80 per share of preferred stock will be paid in the form of shares of common stock valued at approximately $.346 per share, the valuation that would have applied if the preferred stock had been redeemed for shares of common stock on May 15, 1992, the redemption date provided for in Edisto's charter. As a result, approximately 60 shares of common stock will be issued in respect of each share of preferred stock that is redeemed, and a total of approximately 4 million shares of common stock will be issued in the redemption. The redemption will be made as nearly as practicable on a pro rata basis, and the record date for the redemption will be July 6, 1992.
 In addition, the settlement agreement provides that Edisto will redeem the remainder of the preferred stock for cash on the earlier of November 30, 1992 (subject to extension under certain circumstances) or the date of closing of Edisto's proposed exchange offer to the holders of the 13-7/8 percent senior notes due 1999 of Edisto's subsidiaries NRM Energy Company, L.P., NRM Operating Company, L.P. and NRM Finance Corp. The redemption price will be $20.00 per share of preferred stock, plus accumulated and unpaid dividends to the date of redemption.
 The settlement agreement is subject to the approval of the Delaware Chancery Court. In addition, because the suit was brought as a class action and the settlement would therefore bind all holders of preferred stock, the court may determine that each holder of preferred stock should be allowed the opportunity to opt out of the settlement. The settlement agreement provides that, if opting out is permitted and the holders (if any) who opt out represent more than 5 percent of the outstanding shares of preferred stock, Edisto and its directors shall have the right to declare the settlement null and void. If the settlement is not approved by the court or is voided by Edisto and its directors, Edisto will not be bound by its agreement regarding the final cash redemption; however, the partial redemption for shares of common stock on July 22, 1992 will still take place.
 Edisto continues to believe that its actions with regard to the preferred stock have been appropriate and that its directors have faithfully discharged their fiduciary duties. Edisto has nevertheless determined that it is desirable to settle the lawsuit on the foregoing basis to avoid the expenses of litigation and to remove the potential obstacle to Edisto's proposed comprehensive financial restructuring created by the uncertainty resulting from the lawsuit.
 Edisto Resources Corporation's consolidated activities include the production of oil and gas, the exploration and development of oil and gas reserves and natural gas marketing and transportation.
 -0- 6/25/92
 /CONTACT: Gary L. Pittman, vice president - financial services of Edisto Resources Corporation, 214-880-0243/
 (EDS) CO: Edisto Resources Corporation ST: Texas IN: SU:


TQ -- NY028 -- 3673 06/25/92 10:06 EDT
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Publication:PR Newswire
Date:Jun 25, 1992
Words:588
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