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HADSON ANNOUNCES AGREEMENT WITH SANTA FE

 OKLAHOMA CITY, July 29 /PRNewswire/ -- Hadson Corporation ("Hadson") (NYSE: HAD) today announced that it has entered into an Agreement with Santa Fe Energy Resources, Inc. ("Santa Fe")(NYSE: SFR) to acquire a wholly owned subsidiary of Santa Fe that owns certain natural gas transmission, gathering and processing assets and interest and to enter into a seven-year contract to purchase substantially all of Santa Fe's natural gas production. These transactions would be effected through a merger of the Santa Fe subsidiary into Hadson (the "Merger"). The Merger Agreement contemplates that Hadson will issue to Santa Fe shares of a new 11-1/4 percent Senior Preferred Stock of Hadson having an aggregate liquidation preference of $52 million and shares of Hadson Common Stock equal to 40 percent of Hadson's fully-diluted common equity after giving effect to the Merger. Contemplated terms of the new Senior Preferred Stock provide for dividends to be paid in kind for two years. It is anticipated that over 30 employees of Santa Fe will become Hadson employees.
 Hadson has received a commitment from The Prudential Insurance Company of America and certain of its affiliates ("Prudential") to restructure certain of Hadson's debt and equity securities currently held by Prudential. It is contemplated that the balance of Hadson's 6.2 percent Senior Secured Notes due 2000 (which amounts to $23.4 million after the recent sale of Hadson's 49 percent interest in Hadson Energy Resources Corporation), Hadson's 7 percent Senior Preferred Stock (which has an aggregate liquidation preference of $49.5 million), approximately 72.7 million shares of Hadson Class B Common Stock and approximately 11.3 million shares of Hadson Class C Common Stock will be exchanged for or, pursuant to the Merger, converted into, $56.4 million of new 8 percent Senior Secured Noted due 2003 of Hadson and a total of approximately 94 million shares of Hadson Common Stock. Prudential's commitment to effect such restructuring is subject to certain conditions.
 In addition, the Merger Agreement contemplates that, pursuant to the Merger, Hadson's 8 percent Junior Cumulative Convertible Preferred Stock ("8 percent Junior Preferred Stock") will be converted into shares of Hadson Common Stock (at a rate of 22.61 shares of Hadson Common Stock for each share of 8 percent Junior Preferred Stock) and shares of new Junior Exercisable Preferred Stock of Hadson ("New Junior Preferred Stock"). Each share of New Junior Preferred Stock has a liquidation preference of $.25 per share and will be exercisable for five shares of Hadson Common Stock at an exercise price of $.215 per share of Hadson Common Stock, in each case subject to certain adjustments. The company also expects to enter into arrangements with Prudential pursuant to which the proceeds of any such exercises would be paid to Prudential and Prudential's ownership would decrease over time. The Merger Agreement further provides for the issuance in the Merger of additional shares of New Junior Preferred Stock to holders of Hadson's Common Stock. Based upon the number of currently outstanding shares, holders of Hadson's 8 percent Junior Preferred Stock would receive the right, through the exercise of shares of New Junior Preferred Stock received in the Merger, to acquire approximately 68 million new shares of common stock and the current holders of Common Stock would be able to acquire approximately 7 million new shares of Common Stock.
 In connection with the transaction, Hadson also anticipates entering into a new working capital facility with Bank of Montreal which will provide greater capacity and a longer term than the existing agreement between Bank of Montreal and Hadson Energy Products and Services, Inc., a wholly owned subsidiary of Hadson.
 Consummation of these transactions is subject to completion and documentation of the arrangements with Prudential and Bank of Montreal, certain stockholder approvals, certain regulatory approvals and other terms and conditions. Elliott Associates L.P., which holds approximately 18 percent of Hadson's 8 percent Junior Preferred Stock, has agreed to support and vote in favor of these transactions.
 Hadson Corporation is an independent producer and supplier of Energy Products and Services.
 -0- 7/29/93
 /CONTACT: J. Michael Adcock, president and chief executive officer of Hadson Corporation, 405-235-9531/
 (HAD SFR)


CO: Hadson Corporation; Santa Fe Energy Resources, Inc. ST: Oklahoma IN: OIL SU: TNM

DH -- NY033 -- 7191 07/29/93 10:10 EDT
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Publication:PR Newswire
Date:Jul 29, 1993
Words:716
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