ENDEVCO, INC. ANNOUNCES SUCCESSFUL EMERGENCE FROM CHAPTER 11 AND NAME CHANGE TO CORNERSTONE NATURAL GAS, INC.
DALLAS, Nov. 3 /PRNewswire/ -- Endevco, Inc. (AMEX: EI) announced today that is has successfully completed its plan of reorganization (the "plan"), confirmed by the U.S. Bankruptcy Court for the Eastern District of Texas, Sherman Division on Sept. 29, 1993. The company filed its Chapter 11 Petition on June 4, 1993. With the emergence from bankruptcy, Endevco has changed the name of the company to Cornerstone Natural Gas, Inc. Trading will begin on a when-issued basis Thursday, Nov. 4, 1993, at 9:30 a.m. EST, on the American Stock Exchange under the symbol of CGA.WI. Endevco stock will be exchanged on a one for one basis with Cornerstone stock. As a result of the plan, the company will now have 12,515,959 shares outstanding. Pursuant to the plan, the company retired approximately $44.1 million in debt and accrued interest via the payment of $1.946 million cash and the transfer of certain assets, including primarily its approximately 465 mile Mississippi Fuel pipeline system in Central and Southern Mississippi and its approximately 63 mile Ada pipeline system in North Central Louisiana to its principal lender group. Endevco also retired its approximately $27 million outstanding preferred stock by payment of $4.625 million in cash and the issuance of a $2.5 million secured note to the preferred stockholders. The note issued to the preferred stockholders will be secured by the stock of Endevco's subsidiaries. The plan provided that all unsecured trade debt be paid in full. The company has also entered into a new senior bank agreement with a group of banks led by Bank of Oklahoma, N.A. The agreement provides for a $6 million working capital facility and a $5.8 million term loan. Proceeds from the term loan will be used to pay off the existing senior bank loan, pay off the Claiborne facility acquisition loan and partially pay the expenses related to the reorganization. The remaining costs will be paid with internally generated funds. Ray Davis, trustee, purchased for $3 million in cash 4,576,659 shares of the company's common stock (approximately 36.6 percent of outstanding common stock, after giving effect to such purchase) and warrants to purchase an additional 2,564,103 shares of common stock at an exercise price of $.78 per share. The restructuring reduced the total holding company and subsidiary annual interest payments from approximately $4.6 million to approximately $1.2 million, preserved approximately 63.4 percent of equity in the reorganized entity for existing common stockholders (before exercise of warrants), and eliminated an annual $1.9 million preferred stock dividend obligation. After the restructuring, management expects to have positive cash flow that will be used for growth of the company's gas gathering and gas processing segments. Subsequent to the Chapter 11 filing, Ray Davis became chairman of the board and chief executive officer and Kelcy L. Warren, a director and the former president and chief operating officer of Endevco, reassumed those offices. Cornerstone has also retained Robert L. Cavner, formerly of Mountain Gas Resources, Inc., to be its senior vice president, chief financial officer and treasurer. In addition, the company has elected three new members to its board of directors. The new directors are Ben H. Cook, Ted Collins and Richard Brannon. Cornerstone is a gas transportation and processing company. The gas transportation segment includes gathering, transmission and marketing of natural gas. The processing segment includes gas liquids recovery, gas treating and petroleum refining. -0- 11/3/93 /CONTACT: Robert L. Cavnar, senior vice president and chief financial officer of Cornerstone Natural Gas, Inc., 214-691-5536/ (EI)
CO: Cornerstone Natural Gas, Inc.; ENDEVCO, Inc. ST: Texas IN: OIL SU: RCN
TM -- NY121 -- 0424 11/03/93 19:51 EST
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|Date:||Nov 3, 1993|
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