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TRANSCO UPDATES STRATEGIC PLAN PROGRESS: NEW $825 MILLION BANK AGREEMENT REACHED; FOURTH QUARTER RESTRUCTURING CHARGE QUANTIFIED

 TRANSCO UPDATES STRATEGIC PLAN PROGRESS: NEW $825 MILLION BANK
 AGREEMENT REACHED; FOURTH QUARTER RESTRUCTURING CHARGE QUANTIFIED
 HOUSTON, Jan. 15 /PRNewswire/ -- Transco Energy Company (NYSE: E) President and Chief Executive Officer John P. DesBarres today reported on the company's progress to date on its comprehensive strategic and financial plan, which was announced Oct. 31, 1991.
 Bank Agreement Reached
 DesBarres said that Transco and its two principal subsidiaries, Transcontinental Gas Pipe Line Corporation (TGPL) and Texas Gas Transmission Corporation, have entered into new agreements with a group of 15 commercial banks representing $825 million of committed credit facilities. These facilities replace the company's previous $600 million bank arrangement.
 The new agreements include a three-year, $600 million Revolving Credit and Term Loan facility available to Transco, and additional credit facilities of $125 million and $100 million available to TGPL and Texas Gas, respectively, that could be used, if necessary, to fund maturities of each subsidiary scheduled to be refinanced during 1992. The agreements have an effective date of Dec. 31, 1991.
 The bank group, led by Citibank, N.A. and Bank of Montreal, includes Barclays Bank PLC, Chase Manhattan Bank, Manufacturers Hanover Trust Company, Bank of New York, Bank of Nova Scotia, Morgan Guaranty Trust Company, NationsBank, Swiss Bank Corporation, Bank of America, Continental Bank, N.A., First City, Texas, Canadian Imperial Bank of Commerce and Nippon Credit Bank, Ltd. DesBarres said, "The support and leadership of these banks and the financial flexibility afforded by these new agreements provide a foundation for the successful execution of the remaining actions in our strategic plan. We are extremely pleased to have this significant step completed."
 Restructuring Charge to be Recorded
 Transco will record a restructuring charge of approximately $142 million after tax, or $4.85 per share, against fourth quarter earnings. DesBarres noted that the charge, discussed in Transco's Oct. 31, 1991, announcement of its strategic plan and quantified today, reflects Transco's current assessment of the cost of resolving pending regulatory and other legal matters, the status of its investment in coalbed methane development and other costs associated with the company's restructuring. "Approximately $63 million after tax is attributable to a reduction in book value based on our review of Transco's coalbed methane project," DesBarres said. "Another $54 million after tax is associated with regulatory and legal issues, and the remaining $25 million after tax represents other restructuring costs." DesBarres noted that Transco expects to report fourth quarter and year-end financial results during the first week of February.
 Capital Spending Reduced
 DesBarres also said that he expects Transco's 1992 capital budget to approximate $252 million, a 48 percent decrease from 1991's estimated $484 million. "This reduced level of capital spending, $23 million below our previous estimate of $275 million, is a result of more detailed project planning and supports our intent to limit spending, reduce debt, improve financial flexibility and restore earnings," DesBarres said.
 Voluntary Retirements Aid Staff Reductions
 DesBarres also reported significant progress toward Transco's goal of eliminating 500 positions company-wide to reduce costs, as the company's offers of enhanced early retirement and voluntary severance packages have been accepted by more than 400 employees. DesBarres said that the remaining complement reductions would be accomplished through the company's ongoing reorganization efforts.
 In closing, DesBarres noted that the financial flexibility afforded by the bank agreements will aid the successful implementation of the remaining components of the strategic plan. "These agreements and the elimination of contingencies associated with the restructuring charge will contribute significantly to our return to financial flexibility and a sound, strong earnings base," DesBarres said.
 Transco Energy Company, through its interstate gas pipeline systems and other gas service companies, transports and sells natural gas, predominantly to markets in the eastern and midwestern United States. Transco also develops independent power generation facilities and new energy technologies; explores for and produces oil and natural gas in the Gulf of Mexico; and mines and markets coal.
 -0- 1/15/92
 /CONTACT: Katherine K. Putnam, 713-439-2455, (investors) or Donato J. Eassey, 713-439-4176, both of Transco Energy/
 (E) CO: Transco Energy Company ST: Texas IN: OIL SU: RCN


TS -- NY017 -- 9850 01/15/92 08:59 EST
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Publication:PR Newswire
Date:Jan 15, 1992
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