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SCOTTISH HERITABLE, INC. ANNOUNCES AN ESOP PROPOSAL

 FAIRFAX, Va., March 29 /PRNewswire/ -- The Board of Directors of Scottish Heritable, Inc. (a U.S. public company quoted on NASDAQ: SHER) ("SHI" or the "Company") announced today that it has presented a proposal to Scottish Heritable Trust, PLC ("SHT") of York, England, that could lead to SHT's receiving an average price of approximately $4.20 per share for all of the shares of SHI common stock (49.99 percent) presently held by SHT.
 The Board of Directors of SHI has presented a proposal to SHT to expand SHI's existing Employee Stock Ownership Plan ("ESOP") to purchase 1,667,948 of the shares of SHI common stock (43.5 percent of the outstanding) presently held by SHT at an anticipated price of approximately $4.00 per share. After the transaction, SHT would continue to hold 250,000 shares of SHI common stock (6.5 percent). Under the proposal, the 250,000 SHI shares retained by SHT would be held subject to a standstill and put agreement to be entered into between the Company and SHT. Under that agreement, SHT would be subject to certain restrictions with respect to its remaining shares, and SHI would agree to repurchase any of the SHI shares then held by SHT on the fifth anniversary of the agreement at a price of $5.50 per share.
 In announcing the proposal, William R. Kohler, Chairman of the Board of Directors of SHI, explained the reasons for the proposed ESOP transaction: "Ever since SHT announced last July its intention to dispose of its 49.99 percent interest in SHI, the Company has sought ways to resolve the uncertainties resulting from the announcement. As the Company entered into discussions with various lenders in an effort to refinance its commercial lending facilities that currently come due in November 1993, it became increasingly clear that the Company's control and shareholder situations had to be resolved before acceptable financing arrangements could be made for the Company."
 At the end of December, 1992, SHI had outstanding indebtedness of $11,751,000, all of which comes due in November 1993 and is, therefore, shown as current on the Company's balance sheet. Prior to the sale of the assets of the Company's Virginia Lime Company subsidiary in July 1992, and application of the proceeds of that sale to pay down the Company's then- existing indebtedness, the Company had outstanding a total of $29,706,000 in indebtedness.
 "After exploring a number of possible alternatives, SHI's Board of Directors determined that it is in the best interests of SHI and all of its shareholders for the Company to make the ESOP proposal at this time," explained Kohler. He added that the "SHT representatives on the SHI Board of Directors took no part in the consideration of or vote upon the ESOP proposal and, in fact, the Company understands that SHT may be continuing to explore other possible means to dispose of its SHI shares."
 Kohler stressed that "any formal purchase transaction to be entered into between the SHI ESOP and SHT would be contingent upon the appointment of an independent trustee for the ESOP, the amendment of the ESOP to provide for pass-through voting and tendering rights for employee- participants, an opinion of an independent investment banker to the ESOP trustee that the transaction is fair and reasonable to the ESOP and its participants, and the securing of acceptable revolver and term lending arrangements to finance the Company's operations and to provide the funds necessary for the ESOP purchase." Kohler noted that, "at this time, the Company has received satisfactory loan offers for both purposes, contingent on the closing of the ESOP transaction, and other lender requirements."
 If agreed to by SHT, the ESOP transaction would be expected to close in the next 60 to 90 days.
 "This proposal addresses the Company's current financing needs in a timely and responsible manner, which cannot be accomplished without resolving first the Company's control and shareholder situation," Kohler added. "The proposed ESOP transaction would also remove the current high level of uncertainty surrounding the Company and, thus, would enable the Company to secure the term financing that is so important for its continued operations. It would also provide a tremendous further incentive for the Company's employee-participants to continue to strive towards maximizing shareholder value for all shareholders.
 Scottish Heritable, Inc. is a lime and limestone producer, headquartered in Fairfax, Va., with operations in Arkansas, Pennsylvania and Texas.
 -0- 3/29/93
 /CONTACT: Peter C. Timms for Scottish Heritable, Inc., 703-207-9702/
 (SHER)


CO: Scottish Heritable, Inc. ST: Virginia IN: MNG SU:

LR -- NY023 -- 0375 03/29/93 09:24 EST
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Publication:PR Newswire
Date:Mar 29, 1993
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