UGI'S AMERIGAS UNIT OFFERS $122.5 MILLION INVESTMENT IN BID TO RESTRUCTURE AND ACQUIRE PETROLANE GAS SERVICE
UGI'S AMERIGAS UNIT OFFERS $122.5 MILLION INVESTMENT IN BID
TO RESTRUCTURE AND ACQUIRE PETROLANE GAS SERVICE
VALLEY FORGE, Pa., Nov. 21 /PRNewswire/ -- UGI Corp. (NYSE: UGI) reported today that its AmeriGas subsidiary has offered to invest $122.5 million in cash as part of a plan to restructure Petrolane Gas Service Limited Partnership that would lead to the acquisition of Petrolane by AmeriGas.
UGI is a Pennsylvania natural gas and electric utility and, through AmeriGas, the nation's third largest propane marketer. Petrolane, Whippany, N.J., is the largest propane marketer in the United States.
As part of its restructuring proposal, AmeriGas has offered holders of Petrolane's $375 million of 13.25 percent senior subordinated debentures a package consisting of $112.5 million in cash and new subordinated debentures with an aggregate fair market value of $56.25 million. The combination of cash and new debt represents an offer of 45 cents for each dollar principal amount of the 13.25 percent senior subordinated debt, UGI said.
In addition, AmeriGas will seek amortization changes and covenant relief from banks and other senior lenders to Petrolane.
AmeriGas has offered affiliates of The First Boston Corp. and Quantum Chemical Corp. (NYSE: CUE), joint owners of Petrolane, an aggregate of $10 million for their interest in the company.
The restructuring proposal is subject to a number of conditions. Among them are the execution of satisfactory definitive agreements, completion of due diligence and receipt of required government approvals.
It is also subject to approval by UGI's and Petrolane's boards of directors, Petrolane's banks and senior lenders and the holders of the senior subordinated debentures.
Petrolane's revenues in 1990 were $747 million on sales of 800 million gallons of propane to retail and wholesale customers. The firm conducts its retail operations through more than 425 sales and service centers in 42 states.
UGI's consolidated revenues in 1990 were $433 million, including $124 million by its wholly owned AmeriGas Propane operations. In addition, a joint-venture propane business recorded revenues of $281 million which were not consolidated in UGI's financial statements. AmeriGas acquired full ownership of the venture in November 1990.
AmeriGas and the joint venture sold 441 million gallons of propane during 1990 through 307 outlets in 37 states, including Alaska.
/CONTACT: Vince Testa of UGI, 215-337-1000/
(UGI CUE) CO: UGI Corporation; AmeriGas; Petrolane Gas Service Limited
Partnership ST: Pennsylvania IN: UTI SU: TNM MP-LJ -- PH007 -- 5759 11/21/91 09:37 EST