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UGI'S AMERIGAS UNIT NOW HAS AGREEMENTS WITH PETROLANE OWNERS IN ITS EFFORT TO RESTRUCTURE AND ACQUIRE PETROLANE

 UGI'S AMERIGAS UNIT NOW HAS AGREEMENTS WITH PETROLANE OWNERS
 IN ITS EFFORT TO RESTRUCTURE AND ACQUIRE PETROLANE
 VALLEY FORGE, Pa., Aug. 10 /PRNewswire/ -- UGI Corp. (NYSE: UGI) announced today that its wholly owned subsidiary, AmeriGas, Inc., has entered into agreements in principle with Quantum Chemical Corporation (NYSE: CUE) and an affiliate of the First Boston Corporation to acquire the outstanding equity interests in QFB Partners as part of a restructuring of QFB and its subsidiaries, including Petrolane, Inc. and Petrolane Gas Service Limited Partnership.
 AmeriGas has had comprehensive negotiations with the Steering Committee for senior lenders and is hopeful of reaching an understanding with the Steering Committee in the immediate future.
 UGI and AmeriGas previously entered into an agreement in principle with the Steering Committee for the Unofficial Committee of Bondholders of the 13-1/4 percent Senior Subordinated Debentures due 2001 of Petrolane Gas Service to restructure the bondholder debt.
 "These developments represent significant progress in the efforts of AmeriGas to restructure and acquire Petrolane," said James A. Sutton, chairman and chief executive officer of UGI. Sutton added that AmeriGas anticipates accomplishing the financial restructuring and acquisition of Petrolane through a prepackaged plan of reorganization under the U.S. Bankruptcy Code.
 Under the terms of the agreements with Quantum and an affiliate of First Boston, the equity interests in QFB would be sold to AmeriGas for a nominal cash consideration. Indebtedness of Quantum and the First Boston affiliate to Petrolane would also be cancelled. In addition, Quantum would be paid by Petrolane for management services provided to it and for certain trade payables, principally propane it sold to Petrolane. First Boston would also be paid by Petrolane for certain financial advisory fees owed to it.
 The agreement between AmeriGas and Quantum also addresses the separation of Quantum's Suburban Propane Division from Petrolane, which are currently jointly managed and operated. Quantum has agreed that Suburban will continue to provide certain services to the reorganized Petrolane during a limited transition period. After the reorganization, UGI and AmeriGas will provide management services to Petrolane.
 As reported earlier by the Bondholders' Steering Committee in its June 16 news release, under its agreement in principle, all of the $375 million principal amount of 13-1/4 percent debentures would be cancelled. In exchange, the bondholders will receive, among other things, 50 percent of the common stock of the reorganized Petrolane. The bondholders will also receive 11 percent of the common stock of AmeriGas, cash in the aggregate of $51 million within 100 days after completion of the restructuring and warrants to purchase 1,250,000 shares of UGI's common stock at $24 a share under certain circumstances.
 After the restructuring and acquisition of Petrolane, UGI initially will own 89 percent of AmeriGas which will own 50 percent of Petrolane. The bondholders initially will own 50 percent of Petrolane and have rights to exchange their 50 percent interest in the reorganized Petrolane for an additional 15 percent of the shares of AmeriGas after Jan. 1, 1997.
 UGI said AmeriGas has begun negotiating definitive agreements relating to the proposed restructuring and acquisition. The proposed financial restructuring and acquisition is subject to the execution of definitive agreements satisfactory to all parties, the receipt of regulatory approvals and the receipt of necessary consents and approvals from certain creditors of QFB and its subsidiaries.
 Solicitation materials containing detailed information about the proposed restructuring, the reorganized company, AmeriGas and UGI are being prepared and are expected to be filed with the Securities and Exchange Commission in the next several weeks. These materials will be provided to bondholders at a future date.
 UGI is a holding company with two principal operating subsidiaries: UGI Utilities, Inc., a Pennsylvania natural gas and electric utility, and AmeriGas, Inc., the parent of AmeriGas Propane, the nation's third largest propane marketer.
 Petrolane is the largest propane marketer in the United States.
 /delval/
 -0- 8/10/92
 /CONTACT: Vince Testa of UGI, 215-337-1000/
 (UGI CUE) CO: UGI Corporation; AmeriGas, Inc.; Quantum Chemical Corporation
 QFB Partners; Petrolane, Inc. ST: Pennsylvania IN: UTI SU:


MK-MP -- PH002 -- 8365 08/10/92 08:44 EDT
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Publication:PR Newswire
Date:Aug 10, 1992
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