Continental Bank of Canada said shareholders approved a capital reorganization to allow an initial payout by the end of May to common shareholders from last years 200 mln Canadian dlr sale of most Continental assets to Lloyds Bank PLCs Lloyds Bank Canada. The bank said the initial distribution would take the form of a stock dividend of cumulative redeemable retractable class A series two preferred shares entitling holders to monthly floating rate dividends at 72 pct of prime and to 12.75 dlrs a share on retraction. Continental said the initial payout was subject to Canadian government approval. The bank reiterated that total distributions to common shareholders would range from 16.50 dlrs a share to 17.25 dlrs including the initial stock dividend and a final distribution in late 1988 or early 1989. The payout of existing preferred shareholders will be completed just before next months initial distribution to common shareholders, Continental added.
Avnet Inc said it filed with the Securities and Exchange Commission a registration statement for a proposed public offering of 150 mln dlrs of convertible subordinated debentures due 2012. Avnet said it will use the net proceeds for general working capital purposes and the anticipated domestic and foreign expansion of its distribution, assembly and manufacturing businesses. The company said an investment banking group managed by Dillon Read and Co Inc will handle the offering.
Shopsmith Inc said its board has released Joseph DiGaicomo Jr. as president, but he will remain on the board. The company said the post of president will not be filled at present. With very disappointing sales results during the quarter just ended, adjustments are appropriate, the company quoted chairman John R. Folkerth as saying.
certain domestic polyester textile fiber
CMS Enhancements Inc said it has introduced the first add-on mass storage products for the new International Business Machines Corp IBM IBM Personal System/2 Model 30 personal computers. CMS said the products are available immediately and include hard disk drives, tape backup subsystems and a hard disk drive on an expansion card. It added it plans to introduce more products for higher- end models of the IBM personal computers within the next two months. Prices for the new products range from 795 dlrs for a tape backup subsystem, to 5,695 dlrs for a mass storage subsystem.
Dutch seasonally adjusted unemployment rose in the month to end-March to a total 693,000 from 690,600 at end-February, but was well down from 730,100 at end-March 1986, Social Affairs Ministry figures show. The figure for male jobless rose by 2,000 in the month to 436,500 compared with 470,700 a year earlier. The figure for women was 256,500 at end-March against 256,100 a month earlier and 259,400 at end-March 1986. On an unadjusted basis total unemployment fell by 16,500 in the month to end-March to 692,200. In March 1986 the figure was 725,000. A ministry spokesman said the unadjusted figures showed a smaller than usual seasonal decrease for the time of year, because of particularly cold weather delaying work in the building industry. He said this explained the increase in the adjusted statistics. Total vacancies available rose by 1,900 to 26,300 at end-March. A year earlier the figure was 28,763.
AVX Corp said it has filed a registration statement with the Securities and Exchange Commission for a proposed public offering of 75 mln dlrs prinicipal amount of convertible subordinated debentures. AVX said a syndicate managed by Shearson Lehman Brothers Inc will underwrite the offering.
Best Buy Co Inc said its sales for March rose to 26.1 mln dlrs from 11.9 mln dlrs in the comparable 1986 period. It said sales for the fiscal year ended March 31 rose to 329.5 mln dlrs from 113.1 mln dlrs a year earlier. The company said sales performance was based on the addition of 12 new retail facilities.
CCL Industries Inc said it purchased a majority interest in Monobloc U.S.A. from Envases Metalurgicos de Alava of Spain. Terms were not disclosed. CCL also said it agreed to exchange present and future technology with Envases.
Dominion Textile Inc considers a published report that it has bought a stake in Burlington Industries Inc and is considering making a joint bid for the company to be a rumor, a company spokesman said. As far as I am concerned and the company is concerned, they are rumors and were not commenting on rumors, spokesman Michel Dufour told Reuters in response to a query. All the information that has been given out publicly is that, yes, Dominion Textile is interested in making an acquisition that big...probably based on that people are starting all sorts of rumors, he said. Dufour said yes when asked whether the report was only a rumor, but said the company was not prepared to comment further. Dominion Textile president and chairman Thomas Bell was out of town and unavailable for comment. Dominion Textile last year made an unsuccesful 104-mln- U.S.-dlr bid for Avondale Mills and has maintained a 120-mln- U.S.-dlr line of credit to be used for an American acquisition. Dufour said the company has been negotiating with many U.S. textile companies but would not say whether Burlington Industries was one of them. Burlingtons stock rose sharply this morning on the report, which said Dominion Textile had joined with U.S. investor Asher Edelman to buy a stake in the company and to consider making a takeover offer. Dominion Textile, which reported operating profit of 11.1 mln Canadian dlrs last year on sales of 926.5 mln dlrs, has repeatedly said it will concentrate on expanding into the U.S. The company has said it plans to diversify into new product and market areas in addition to expanding its textile operations.
A Treasury official said there are no plans to try to reduce the U.S. budget deficit by issuing yen-denominated bonds that would become known as Reagan bonds. It simply isnt something that we are planning to do, the official said. He added the Treasury was aware of Japanese news reports suggesting the Reagan administration might issue such bonds as the former Carter administration did when it sold Carter bonds denominated in West German marks. But he said the situation was greatly different now. If you look at the differences between the treasury market now and in the Carter administration years, it is a much more global market now, the official said. There was not the same ease then for the holder of another currency to buy other countries securities, he added, But there is no difficulty now for them to purchase dollars and buy U.S. securities. The United States needs dollars, not Japanese yen, to pay its debts and reduce the deficit and so has no plans to issue yen-denominated bonds, he emphasized.
Japan bought 4,000 tonnes of Canadian rapeseed overnight at an undisclosed price for last half May/first half June shipment, trade sources said.
Pancontinental Oil Ltd said it arranged a 10 mln dlr private financing with Pemberton Houston Willoughby Bell Gouinlock Inc. The private placement consists of special warrants to purchase seven pct convertible redeemable preferred shares. The shares will be convertible for five years into common shares at five dlrs per share. The preferred shares are not redeemable for 2-1/2 years. Net proceeds will be used to increase working capital and finance exploration and development.
Paxar Corp said it has acquired Thermo-Print GmbH of Lohn, West Germany, a distributor of Paxar products, for undisclosed terms.
Freeport-McMoRan Inc said it has decided to begin accruing a portion of its estimate of the intanmgible drilling and development cost recapture amount as a cost in determining payments to be made to Freeport-McMoRan Oil and Gas Royalty Trust PMR unitholders. Freeport said this is expected to reduce monthly payments by about two cts per unit starting with the distribution payable July 10 to holders of record May 29.
Ford Motor Co said it extended its buyer incentive program on light trucks to April 30 from April 6, the programs previous expiration date. Ford, which saw a 23 pct rise in its March truck sales over the March 1986 level, said the incentives were extended to maintain its truck sales momentum. The program itself was not changed. Customers have a choice of 3.9 to 9.9 annual percentage rate financing or a cash rebate of 300 dlrs or 600 dlrs, depending on the type of transmission chosen. Ford last week extended to April 30 from March 12 its incentive program on its compact trucks and the Ford Taurus and Mercury Sable cars.
Bache Securities Inc, 80 pct owned by Prudential Bache Securities Inc, said it acquired its third Toronto Stock Exchange seat for 301,000 Canadian dlrs. The company said the price was the highest yet paid for an exchange seat. A Toronto Stock Exchange spokesman said an exchange seat last sold for 195,000 dlrs in March, which was acquired by Toronto Dominion Bank. Bache Securities said it needed a third exchange seat as part of an extensive plan to provide an enhanced level of service to clients. The seat will be used to further build its professional trading area, the investment dealer said.
Northern Telecom said it shipped the first digital central office switching system it sold to Nippon Telegraph and Telephone under the terms of a 250 mln dlrs supply agreement. The agreement began with the signing of a letter of understanding in December 1985. THe formal seven-year agreement was signed in May 1986. The Northern Telecom systems is the first U.S.-manufactured digital central office switching systems to be installed in the Japanese public telephone network, it said.
The Federal Reserve is expected to intervene in the government securities market to supply temporary reserves indirectly via customer repurchase agreements, economists said. Economists expect the Fed to execute 2.0-2.5 billion dlrs of customer repos to offset pressures from the end of the two-week bank reserve maintenance period today. Some also look for a permanent reserve injection to offset seasonal pressures via an outright purchase of bills or coupons this afternoon. The Federal funds rate opened at 6-3/8 pct and remained at that level, up from yesterdays 6.17 pct average.
Kidder, Peabody and Co and E.F. Hutton Co Inc, acting as co-managers in the underwriting group, said Amplicon Incs initial public offering of 1,650,000 shares of its common stock was being offered at 12.25 dlrs per share. Of the shares being offered, 1,400,000 are being sold by the company and 250,000 shares are being sold by selling stockholders, Kidder Peabody said.
CNA Income Shares Inc said it filed with the Securities and Exchange Commission a registration statement covering a 30 mln dlr issue of convertible extendible notes due 1992. The proceeds will be used for investment purposes, the company said. CNA Inc named Drexel Burnham Lambert Inc as sole underwriter for the offering.
Photographic Sciences Corp said it has formed a new Metrology Division for the production and marketing of surface profiler measurement equipment. It said the equipment, a new market area, should add significantly to company revenues in the next few years.
U.S. National Transportation Safety Board
Tri-State Generation and Transmission Association
Great Lakes Chemical Corp said it registered with the Securities and Exchange Commission a proposed public offering of two mln shares of its common stock. Proceeds from the offering will be used to repay debt incurred in the acquisition of two chemical companies, to increase Great Lakes equity investment in Huntsman Chemical Corp and for general corporate purposes, it said. Underwriters are led by First Boston Corp, Goldman, Sachs and Co and Eberstadt Fleming Inc.
extensive corporate restructuring program
West Germanys total net direct investments abroad fell to 11.2 billion marks in 1986 from 13.6 billion in 1985, but investments in developing countries rose to 683 mln marks from 358 mln, the Economics Ministry said. Foreign investments in West Germany were a net 5.8 billion marks in 1986, up from 3.6 billion in 1985, with higher European investments largely responsible for this increase. The ministry noted that, despite last years rise in West German investments in developing countries, the 1986 level was below the investments of over two billion marks seen in 1981, 1982 and 1983.
Reynolds and Reynolds said that it filed a coutersuit in the U.S. District Court in Detroit against Advanced Voice Technologies and that it denied all allegations in Advanceds March lawsuit against Reynolds. As previously reported, Advanceds suit charges Reynolds with pirating a computer-based voice messaging system for auto dealer departments using confidential information it received while test marketing the system for Advanced. In the countersuit, Reynolds claimed that Advanced used its proprietary inofrmation contrary to an agreement between the companies. Reynolds also said Advanced interfered with its plans to enter the market and compete with Advanced through a public relations campaign and other activities. Reynolds said its suit asked the court for injunctive and monetary relief based on Advanceds activities.
Investment Technologies Inc said it will make available its online investment advisory service to Spear Securities Inc customers. Investment Technologies said that through a Spear rebate program, purchasers of the investment advisory service, VESTOR, can receive a cash rebate of up to the full subscription price of the investment advisory service from Spear Securities. Spears brokerage commission rebate program will allow money managers or individual investors who purchase VESTOR from Investment Technologies, or from other authorized distributors, to recive a rebate of the brokerage commissions, the company said. Each month Spear will send participating customers a check equal up to 25 pct of monthly commissions generated by the client account, it added.
Major cocoa exporters are likely to limit sales in the weeks ahead in an effort to boost world prices, sources close to a meeting of the Cocoa Producers Alliance (CPA) said. The sources said the depressed world market had been one of the main topics discussed in a closed door meeting of the 11-member CPA which began on Monday. They said producers agreed that cutting sales would aid the buffer stock manager of a new international cocoa pact in his effort to support prices. Major cocoa producing and consuming nations agreed operation rules for the buffer stock at a meeting in London last month and the stock manager is expected to enter the market soon. Prices, under the weight of three successive cocoa surpluses, recently fell to the level at which the manager has to buy cocoa under stock rules. The buffer stock aims to keep prices within a pre-set range by buying when prices fall and selling when they rise. The worlds cocoa price at present is just not interesting, commented one delegate representing a major CPA producer. Another source said that with much of the 1986/87 (October-September) world cocoa crop sold, limiting sales in the near term concerns essentially next years harvest. The sources noted, however, that the cocoa industry in Brazil, the worlds number two producer, is in private hands. This means limiting sales is more difficult than in major West African producers, where sales are made or authorized by commodity marketing boards. The CPA includes the worlds top three producers, Ivory Coast, Brazil and Ghana, and accounts for 80 pct of all output. The meeting here is due to end tomorrow evening.
International Business Machines Corp IBM
The New Jersey Hospital Association said it will hold a symposium on the quality of hospital care on Friday, April 10. Thirty-eight health-care executives from 18 nations will be on hand at the symposium.
Advanced Micro Devices Inc said it is developing a set of five computer chips for use in digital communications systems. The company said the new chips support the integrated services digital network, or ISDN, the international standard for digital voice and data communications. Advanced Micro also said it has signed a licensing agreement with American Telephone and Telegraph Co T under which ATT has provided it with certain digital communications specifications. Today T under which ATT has provided it with certain digital communications specifications. Today's announcement follows the companys announcement follows the company's introduction last week of a 32-bit microprocessor. s introduction last week of a 32-bit microprocessor. We have now reached a key point in the development of communications devices that implement a worldwide ISDN standard, standard," said John East, group vice president for Advanced Micro's logic businesses. He said the companys logic businesses. He said the company's new computer chips, to be available by the end of this year, should boost the acceptance and implementation of ISDN services. The chip set includes five separate devices in 100 unit quantities. The devices are priced from 7.25 dlrs to 29.25 dlrs. Similar chip sets for ISDN communications are already being sold by a number of companies including INTEL Corp INTC, ATT, Rockwell International ROK and a joint venture between Northern Telecom LTd NT and Motorola Inc MOT. The ISDN standard, portions of which are still being defined, will provide for the simultaneous transmission of voice, data and video. Advanced Micro chip sets will be used in equipment such as private branch exchanges and desktop computers. The company also said it is developing an ISDN protocol controller. It said the controller will connect directly with its current line of ISDN devices. The device supports several digital communications protocols, including ones from International Business Machines Corp IBM and ATT. Reuter"
Toronto Dominion Bank, Nassau Branch is issuing a 40 mln Australian dlr eurobond due May 15, 1990 paying 14-1/2 pct and priced at 101-3/8 pct, lead manager Hambros Bank Ltd said. The non-callable bond is available in denominations of 1,000 Australian dlrs and will be listed in London. The selling concession is one pct, while management and underwriting combined will pay 1/2 pct. The payment date is May 15.
The U.S. Senate Budget Committee ended its stalemate over a budget plan and approved by a single vote a revised 1988 budget proposed by chairman Lawton Chiles to cut the deficit to 133.7 billion next year. The new plan broke last week to cut the deficit to 133.7 billion next year. The new plan broke last week's gridlock in which the committee failed to approve a similar Chiles plan on a tie vote. Today, the measure was sent to the Senate 13 to 11. Among a series of changes to get the extra vote, Chiles added about 400 mln dlrs for additional, unspecified, agricultural spending programs to be paid with partly with higher user fees. Reuter
Office of Management and Budget Director James Miller said President Reagan will reject the tax increase called for in the House Budget Committees 1988 budget proposal which is before the House for a vote today. Its just completely unacceptable, Miller told a House Appropriations subcommittee on Treasury, Postal Service and General Government Appropriations. The plan, drafted by the Democratic-controlled Budget committee, calls for 22 billion dlrs in higher revenues, of which 18 billion would be from new taxes set by the tax-writing committees. The House committees budget proposal includes some increases in federal user fees as well as 18 billion dlrs in taxes. Miller warned that failure to reduce the federal deficit would jeopardize the U.S. economy. If we do not further reduce the deficit... we place this economic expansion that weve had in the last five years at risk, Miller told the subcommittee. The result of any kind of tax increase would be to increase substantially the prospects that the expansion would come to an end, Miller said.
Digital Communications Associates Inc said its board has named James Ottinger president and chief operating officer. The company said Ottinger replaces Bertil Nordin as president. Nordin will become chairman and chief executive officer, Digital Communications added.
Fidelcor Inc said it has completed the sale of its Industrial Valley Title Insurance Co subsidiary to a group of investors including the units management for undisclosed terms. Industrial Valley has assets of about 37.6 mln dlrs and was acquired last year along with IVB Financial Corp.
Le Peep Restaurants Inc said it is suing an Ohio company, charging it copied its restaurant from its menu to its design. The action is being taken against ShellyShelly's Inc, operator of three restaurants in Columbus, Ohio, the company said. The suit alleges copyright infringement and unfair competition, it said. The suit was filed in U.S. District Court of the Southern District in Ohio, and seeks damages in excess of 2,250,000, the company said. Reuter
Federal Paperboard Co Inc said it has entered into an agreement with Ozaki Trading Co Ltd of Osaka, Japan, allowing Ozaki to represent Federal Paperboards bleached paperboard sales in Japan. Federal added it will be opening an office in Japan in the near future.
The Victorian Corporate Affairs Commission, CAC, said it had suspended the futures trading licence of G H Shintoh (Australia) Ltd after a receiver was appointed to the companys South Australian branch. The one month suspension followed consultation with the Sydney Futures Exchange, SFE, which was liaising with Shintoh concerning the open positions of its clients, the CAC said. The South Australian CAC had applied for the appointment of a receiver and manager over the Adelaide office of Shintoh, an associate member of the SFE, the CAC said. Shintohs is the first licence suspended under a Futures Industry Code introduced by Australian states from July 1, 1986, SFE chief executive Les Hosking told Reuters. Asiavest Pty Ltd, a commodities futures trader associated with Shintoh and incorporated in Queensland, was placed in receivership earlier this year, he said.
Argentine grain producers adjusted their yield estimates for the 1986/87 coarse grain crop downward in the week to yesterday after the heavy rains at the end of March and beginning of April, trade sources said. They said sunflower, maize and sorghum production estimates had been reduced despite some later warm, dry weather, which has allowed a return to harvesting in some areas. However, as showers fell intermittently after last weekend, producers feared another spell of prolonged and intense rain could cause more damage to crops already badly hit this season. Rains in the middle of last week reached an average of 27 millimetres in parts of Buenos Aires province, 83 mm in Cordoba, 41 in Santa Fe, 50 in Entre Rios and Misiones, 95 in Corrientes, eight in Chaco and 35 in Formosa. There was no rainfall in the same period in La Pampa. Producers feared continued damp conditions could produce rotting and lead to still lower yield estimates for all the crops, including soybean. However, as the lands began drying later in the week harvesting advanced considerably, reaching between 36 and 40 pct of the area sown in the case of sunflower. Deterioration of the sunflower crop evident in harvested material in Cordoba, La Pampa and Buenos Aires forced yield estimates per hectare to be adjusted down again. The seasons sunflowerseed production is now forecast at 2.1 mln to 2.3 mln tonnes, against 2.2 mln to 2.4 mln forecast last week and down 43.9 to 48.8 pct on the 1985/86 record of 4.1 mln. Area sown to sunflowers was two to 2.2 mln hectares, 29.9 to 36.3 pct below the record 3.14 mln hectares last season. Maize harvesting has also reached 36 to 40 pct of the area sown. It is near completion in Cordoba and Santa Fe and will begin in La Pampa and southern Buenos Aires later in April. Production estimates for maize were down from last week at 9.5 mln to 9.8 mln tonnes, against 9.6 mln to 9.9 mln estimated previously. This is 22.2 to 23.4 pct below the 12.4 mln to 12.6 mln tonnes estimated by private sources for the 1985/86 crop and 21.9 to 25.8 pct down on the official figure of 12.8 mln tonnes. Maize was sown on 3.58 mln to 3.78 mln hectares, two to seven pct down on last seasons 3.85 mln. Sorghum was harvested on 23 to 25 pct of the area sown in Cordoba, Santa Fe and Chaco. Harvest will start in La Pampa and Buenos Aires in mid-April. The total area sown was 1.23 mln to 1.30 mln hectares, 10.3 to 15.2 pct down on the 1.45 mln sown last season. The new forecast for the sorghum crop is 2.9 mln to 3.2 mln tonnes compared with three mln to 3.3 mln forecast last week, and is 23.8 to 29.3 pct down on last seasons 4.1 mln to 4.2 mln tonne crop. The soybean crop for this season was not adjusted, remaining at a record 7.5 mln to 7.7 mln tonnes, up 4.2 to 5.5 pct on the 7.2 mln to 7.3 mln estimated by private sources for 1985/86 and 5.6 to 8.5 pct higher than the official figure of 7.1 mln. The area sown to soybeans this season was a record 3.7 mln to 3.8 mln hectares, 10.8 to 13.8 pct up on the record 3.34 mln sown in 1985/86. The soybean crop is showing excessive moisture in some areas and producers fear they may discover more damage. Some experimental harvesting was carried out in Santa Fe on areas making up only about one pct of the total crop but details on this were not available. Preparation of the fields for the 1987/88 wheat crop, which will be sown between May and August or September, has so far not been as intense as in previous years.
Quebec mines minister Raymond Savoie said the province is prepared to offer money to help re-open (Noranda Inc))'s Murdochville, Quebec copper mine, shut down by fire last week, but said he could not give a specific figure until damage estimates have been completed. Federal member of parliament for the region, Charles-Eugene Marin, said last week the federal government is also prepared to provide financial help to restart operations as soon as possible. Noranda has estimated damage from the fire at about 10 mln dlrs and a company spokesman said it should have a more specific estimate by the end of the month. Noranda said it had hoped to have an estimate sooner, but has found that it will take longer than expected to gain access to the burned-out area. Noranda said the mine was not insured. said the mine was not insured. We decided many years ago...that the costs of insuring all of NorandaNoranda's underground operations would have been prohibitive, underground operations would have been prohibitive," Larry Taylor, NorandaNoranda's risk management and insurance director, said. Taylor said before last week said before last week's fire, the company had only had one previous mine accident many years ago. Last weeks fire, the company had only had one previous mine accident many years ago. Last week's fire killed one miner and trapped 52 other underground, some for up to 24 hours. It was believed to have started on a new conveyor system. Noranda has said it would take four to five months to return the mine to normal operating capacity. It produced 72,0000 tons of copper anode last year, Coffin said. Reuter"
Western Digtial Corp said it has completed the redemption of its 47 mln dlr, 6-3/4 pct convertible subordinated debentures due 2011. The redemption resulted in the issuance of 2,685,142 shares of the companys common stock, Western Digital said.
certain digital communications specifications
Home Intensive Care Inc said it has opened a Dialysis at Home office in Philadelphia, its 12th nationwide.
The EC Commission confirmed it granted export licences for 118,350 tonnes of current series white sugar at a maximum export rebate of 46.496 European Currency Units (ECUs) per 100 kilos. Out of this, traders in France received 34,500 tonnes, in the U.K. 37,800, in West-Germany 20,000, in Belgium 18,500, in Spain 5,800 and in Denmark 1,750 tonnes.
World output of staple foods maintained growth in 1986, following a record harvest the year before, and most of the increase was in developing countries, the director general of the U.N.s Food and Agriculture Organisation (FAO) said. Speaking to FAOs committee on world food security, Edouard Saouma said sub-Saharan Africa registered a cereal production increase of 3.6 pct in 1986 and the Far East also continued to increase production. Despite ample supplies worldwide, many countries face problems in paying for all the food they need, he said. Saouma said many of the developing worlds food problems were the result of chaotic world trade. He said it was vital to promote employment to improve the food-security situation of the poor, with policy reforms in developing countries to remove existing disincentives to production so that agriculture could play a greater role in stimulating economic growth.
Data I/O Corp said it unveiled a software package that helps engineers design complex integrated circuits that fit on circuit boards built by Mosaic Systems Inc. It said the Mosaic boards allow engineers to develop the circuits at one-tenth their present size. The software will be marketed in conjuction with the circuit boards, the company said.
Federal Paper Board Co Inc said it has named Ozaki Trading Co Ltd of Osaka to represent it it Japan on the sale of bleached paperboard. Federal said it plans to open its own Japanese office in the near future.
several digital communications protocols
Todays dollar convertible eurobond for Federal Realty Investment Trust has been increased to 100 mln dlrs from the initial 75 mln, lead manager Salomon Brothers International said. The coupon has been fixed at 5-1/4 pct compared with the indicated range of 5-1/4 to 5-1/2 pct. The conversion price has been fixed at 30-5/8 dlrs compared with last nights close in the U.S. Of 25-1/2 dlrs. This represents a premium of 20 pct. The put option after seven years was priced at 120 pct to give the investor a yield to the put of 7.53 pct.
Raytheon said a 10 pct rise in its first quarter net to 101.8 mln dlrs reflected improved operations and a lower effective tax rate. The company said revenue gains in electronics, major appliances and other lines were offset by decreases in energy services and aircraft products. Revenues in the quarter rose 1.4 pct to 1.75 billion dlrs, it said. The company said backlog stood at 7.520 billion dlrs, down from 7.912 billion dlrs a year earlier. It said a five year 3.55 billion dlr U.S. defense contract was awarded shortly after the close of the first quarter.
Volkswagen AG VOWG.F, VW, is due to make a formal announcement about its 1986 dividend tomorrow after saying the 1985 level of 10 marks per ordinary share would be held, despite massive losses because of a suspected foreign currency fraud. A spokesman said VWs supervisory board will meet tomorrow to discuss the payout. A statement will be made afterwards. VW has also said disclosed profits for 1986 will reach their 1985 level, despite provisions of a possible 480 mln marks linked to the currency affair. The figure is virtually the same as the 477 mln mark 1985 parent company net profit. When VW first confirmed the currency scandal on March 10 it said the management board would propose an unchanged 10-mark dividend to the supervisory board. A dividend of 11 marks would be proposed for the companys new preference shares. Share analysts said they saw supervisory board approval of the management board proposal as virtually a formality. Anything else would be more than a surprise, one said. Company sources said VW would have to dig into reserves to maintain the disclosed profit. Parent company reserves stood at around three billion marks at end-1985.
shr 1.22 dlrs vs 1.28 dlrs net 226.4 mln vs 233.9 mln assets 80.45 billion vs 70.23 billion loans 35.16 billion vs 35.99 billion deposits 45.22 billion vs 39.68 billion return on assets 1.14 pct vs 1.35 pct return on common equity 18.20 pct vs 22.08 pct NOTE: 1987 qtr net was reduced by 20 mln dlrs because 1.3 billion dlrs of loans to Brazil were placed on non-accrual. loan loss provision 35 mln dlrs vs 70 mln year earlier.
Honduras will tender April 13 under Public Law 480 for approximately 52,500 tonnes of various wheats in bulk, an agent for the country said. The agent said Honduras is seeking U.S. no. 2 or better northern spring/DNS, with 14 pct protein minimum and 13 pct moisture maximum, and U.S. no. 2 or better hard red winter, with 12 pct protein minimum and 13 pct moisture maximum. The agent said NS/DNS laydays include July 1-10 for 7,500-9,500 tonnes, Aug 1-10 for 8,000-10,000 tonnes, and Sept 15-25 for 12,500-14,500 tonnes. HRW laydays include June 20-30 on 5,000-7,000 tonnes, July 15-25 for 6,500-8,500 tonnes, and September 15-25 for 7,000-9,000 tonnes. Offers are due by 1550 hrs EDT, April 13, and will remain valid until 1000 hrs EDT, April 14, the agent said.
The Zambian government has no immediate plans to follow last weeks increase in the producer price of maize with a hike in the retail price of maize meal, an official of the ruling party said. Last December, a 120 pct increase in the consumer price for refined maize meal, a Zambian staple, led to food riots in which at least 15 people died. That price increase, which President Kenneth Kaunda later revoked, followed pressure by the International Monetary Fund (IMF) to reduce the governments subsidy bill. However, if the producer price rise, from 6.10 dlrs to 8.67 dlrs per 90-kg bag, is not accompanied by a retail price increase, the government will have to spend more on subsidies, a practice discouraged by the IMF. There is no way out but to raise the subsidy levels of meal. It (the government) would have to choose between the demands of the IMF and those of the people, a Ministry of Agriculture economist said.
Preston corp said it expects to report a loss of about 300,000 dlrs or five cts per share for the first quarter, compared with a profit of 1,081,000 dlrs or 19 cts per share a year before. The trucking company attributed the loss to the continued rate of discounted in its primary markets, flat revenues and increased costs, including uninsured claims expense resulting from adverse weather conditions during the last three months. It said results outside the Northeast were strong, and it expects to show improved results for the rest of the year. Reuter
AutoSpa corp said it will redeem all its common stock purchase warrants on May Five at 7.5 cts each. Through May Four, each warrant may be exercised into one common share at 1.75 dlrs.
Faulty repair work by The Boeing Company BA.N was a contributary cause to a Japan Air Lines Co Ltd JAPN.Y 747 crash on August 12, 1985, that killed 520 people, the final draft of a Ministry of Transport report says. There were only four survivors when the aircraft crashed into a mountain north of Tokyo. The report said inadequate inspection of the aircraft by Japanese inspectors after the repairs was another factor in the crash. The crew were cleared of any responsibility for the disaster. The report, which was sent on March 23 to the U.S. National Transportation Safety Board for comment, should be released in late May. Under an international convention the draft must be submitted for final comments to the relevant authorities. Boeing spokesmen were unavailable for comment. On April 4, a Boeing spokesman at the firms headquarters said the company would probably make no comment on the Japanese investigation teams report until it was officially released. On September 6, 1985, Boeing said in a statement that the 1978 repairs it had undertaken were faulty. This statement did not, however, connect the faulty repairs with the cause of the crash.
Emerson Radio Corp said it has sold 10 mln dlrs of eight pct senior notes due March 1992 to a major institutional investor it did not name. The company also said 5,800,000 dlrs of its convertible subordinated notes due 1997 have been converted into 728,476 common shares.
Demand for shares in state-owned engine maker Rolls Royce Plc is expected to be substantial when the government privatises it at the end of April, Christopher Clark of the groups bankers Samuel Montagu and Sons Ltd said. He told a press conference after the release of an initial prospectus for the float that the issue would be offered to U.K. Institutions, company employees and the general public. As in previous flotations, clawback arrangements would be made if public subscriptions exceeded initial allocations. He declined to say how the shares would be allocated beyond saying that a significant proportion would go to institutions. A decision on what percentage would go to each sector would be made shortly before the sale price was announced on April 28. Minimum subscription would be for 400 shares with payment in two tranches, again a method broadly in line with previous privatisations. Chairman Sir Francis Tombs denied suggestions that Rolls was a stock that should be left to the institutions. He noted that although the aircraft industry was cyclical, Rolls had several operations -- such as spare parts and military equipment -- that evened out the swings. Rolls 1986 research and development expenditure in 1986 was 255 mln stg and could be expected in the future to vary according to changes in turnover. He noted that net research and development expenditure was written off in the year it occurred, a policy that received inadequate recognition in one or two of the more extravagant forecasts of future profits. He made no forecast himself. In 1986, Rolls reported that pretax profit rose 48 pct to 120 mln stg on turnover 12 pct higher at 1.8 billion.
National Guardian Corp said it has acquired a number of security services companies recently, with aggregate revenues of about 3,500,000 dlrs, for an aggregate cost of about 2,700,000 dlrs. It said it acquired guard service companies C.S.C. Security Gaurd Service of Paramus, N.J., from Cartel Security Consultants Inc, the Guard Services Division of Security Services of America of Wayne, N.J., Capital Investigations and Protective Agency of Hackensack, N.J., and Meyer Detective Agency Inc of National Park, N.J. The company said it bought alarm service operations Certified Security Services Inc of Key West, Fla., Custom Security Services of Myrtle Beach, S.C., A-T-E Security Group Inc of Houston and the Louisville, Kent and Nashville, Tenn, offices of Wells Fargo Alarm Services.
Dutch state-owned chemical firm NV DSM (DSMN.AS), the former Dutch state mines, which today reported a 2.5 pct increase in 1986 net profit to 412 mln guilders, said it was poised to be privatised, possibly next year. DSM chairman Hans van Liemt told journalists We have done our homework. Were ready. It is up to the state now. He said a public sale of 30 pct of DSMs assets in 1988 was not unlikely, but the timing of the sell-off was entirely in the hands of Parliament. Dutch Finance Minister Onno Ruding is known to be a proponent of privatisation, and the centre-right government coalition mentioned plans to privatise DSM in its policy declaration last autumn. Van Liemt would not speculate on a possible market price, but said his company had raised its total 1986 dividend to 98 mln guilders, almost 25 pct of 1986 net profit. We ought to be able to match our German competitors on price earnings ratio, although the Amsterdam bourse generally has a lower ratio than the worlds major exchanges, he said. The average Dutch price/earnings ratio is 10.
Wedgestone Realty Investors Trust said shareholkders have approved the acquisition of its advisor, Wedgestone Advisory Corp, for 600,000 shares. It said completion is expected to take place April 10.
Pemberton Houston Willoughby Bell Gouinlock Inc
Yankee Cos Inc said its Eskey Inc ESK subsidiary has decided not to sell its Yale E. Key unit. Further details were not disclosed.
The Readers Digest Association Inc said it sold its subsidiary, Source Telecomputing Corp, to the venture capital firm of Welsh, Carson, Anderson and Stowe. The purchase price was not disclosed, Readers Digest said. It said it purchased an 80 pct stake in Source in 1980 and earned an unspecified profit on 14 mln dlrs in revenues in 1986.
Donald Trump and Interstate Properties said they were holding preliminary discussions regarding a possible joint acquisition of Alexanders Inc at 47 dlrs per share. The possible acquisition is subject to any applicable real estate gains and transfer taxes, the joint statement said. Trump and Interstate, which presently own about 40 pct of Alexanders common stock, said they intend to keep the company as a retailer if they succed in their acquisition. There can be no assurances that the parties will reach any agreement regarding an acquisition or what price might be offered, the statement said.
Securities and Exchange Commission John Shad said he wanted Congress to write a better definition of insider trading but thought action should wait until the Supreme Court ruled on an insider trading case. Id like the benefit of the Winans decision before deciding on a definition, Shad told a Senate Appropriations subcommittee hearing. Shad was refering to the appeal by former Wall Street Journal reporter R. Foster Winans of his conviction on insider trading charges for telling a friend in advance what stocks he was going to write about in his column. The stocks usually went up or down in price depending on Winans recommendation. He said insider trading accounted for only 11 percent of the SECs enforcement activities last year despite the publicity given to recent major cases. Insider trading makes up only a tiny fraction of one pct of the 50 billion dlrs of daily securities trading, Shad said. Shad asked for a budget increase so the SEC could enlarge its enforcement staff by 20 this year and 73 next year to deal with all types of securities fraud. Shad said he hoped to start his new duties as U.S. Ambassador to the Netherlands by June. He said he did not know when his successor would be named by President Reagan.
Teradyne Inc said Digital Equipment Corp signed a multi-license purchase agreement valed at over one mln dlrs for Teradynes Lasar Version Six Simulation System. The company said the agreement includes the option for futrue lasar purchases by Digital.
Entourage International Inc said it had a first quarter loss of 104,357 dlrs, after incurring 70,000 dlrs in costs for an internal audit, a report for shareholders and proxy soliciation and 24,000 dlrs in startup expenses for opening London offices. The company went public during 1986. Entourage also said it has started marketing a solid perfume packaged in a lipstick tube called Amadeus, retailing at 15 dlrs. The company also said it has acquired North Country Media Group, a video productions company.
Britain intends to negotiate further agreements on international securities regulation to match those now in force with the U.S. And Japan, government sources said. The Department of Trade and Industry said earlier it had concluded a memorandum of understanding with Japans Finance Ministry to swap supervisory and investigatory information. The agreement covers stocks, shares and government bonds, but not commodity futures, whose regulation in Japan does not come under the Finance Ministry. It therefore does not cover some transactions on the London International Financial Futures Exchange and the London commodities and metal exchanges. The DTI said it hoped to seek further understandings with other countries which met in the U.K. Last December. The meeting involved delegates from the U.K., Switzerland, the U.S., Canada, Australia, Hong Kong, Japan, France, West Germany and Holland. Government sources said the deal with Japan completes arrangements linking Tokyo, the U.S. And London. A U.K. Agreement with the U.S. Securities and Exchange Commission (SEC) was signed last September. Todays agreement will deal with requests for information on a case by case basis, U.K. Government sources said. It is not legally binding and comes into force immediately.
Sci-Med Life Systems Inc said its directors approved a previously proposed agreement of merger with Bristol-Myers Co. The proposed transaction is subject to completion of a due diligence investigation, including a review by Bristol-Myers of a patent infringement suit served on Sci-Med by Advanced Cardiovascular Systems Inc on March 31, 1987. Bristol-Myers has the right to call off the agreement under certain circumstances, it said. Sci-Med said it continues to believe the patent suit is without merit.
Entourage International Inc said it plans to package solid perfume in a lipstick tube and retail the product, called Amadeus, for 15 dlrs. The company said the product was first test marketed in Feburary after six months of research and development.
House Appropriations subcommittee on Treasury, Postal Service and General Government Appropriations
Synergen Inc said it has filed for an offering of 1,500,000 common shares through underwriters led by Alex. Brown Inc ABSB, Hambrecht and Quist Inc and Boettcher and Co Inc. It said proceeds will be used to fund research and testing and for other general corporate purposes. Reuter
The Senate Budget Committee ended its stalemate over a budget plan and approved by a single vote a revised 1988 budget proposed by chairman Lawton Chiles to cut the deficit to 133.7 billion next year. The new plan broke last weeks gridlock in which the committee failed to approve a similar Chiles plan on a tie vote. Today, the measure was sent to the Senate 13 to 11. Among a series of changes to get the extra vote, Chiles added about 400 million dlrs for additional, unspecified, agricultural spending programs to be paid with partly with higher user fees.
J.P. Morgan and Co Inc said its first-quarter earnings fell by 3.2 pct, largely reflecting its previously announced decision to place on non-accrual status its 1.3 billion dlrs of medium- and long-term loans to Brazil. That decision, spurred by Brazils suspension of interest payments on February 20, reduced the quarters net income by 20 mln dlrs to 226.4 mln dlrs, compared with 233.9 mln in the first three months of 1986. Morgan also reported a loss of 1.8 mln dlrs from securities underwriting and trading, in contrast to a gain of 45.4 mln dlrs in the year-earlier period. In the fourth quarter of 1986, Morgan posted other trading losses of 5.5 mln dlrs because of setbacks in the trading and underwriting of Euromarket securities. Conditions in some sectors of the Euromarket remained difficult last quarter, with floating rate notes suffering heavy price falls, but a spokeswoman was unable to say whether Morgans trading losses were restricted to the Euromarket. On the positive side, Morgan reduced its provision for loan losses to 35 mln dlrs from 70 mln a year earlier. Foreign exchange trading income rose to 82 mln dlrs from 72.6 mln and trust income increased to 95.9 mln dlrs from 75.9 mln. Morgan said other operating income, mainly fees and commissions, rose to 102.2 mln dlrs from 88.4 mln, but net investment securities gains dropped to 43.1 mln from 58.1 mln. Net interest earnings were 490.4 mln dlrs in the first quarter, down from 499.4 mln a year earlier, and net yield fell to 2.79 pct from 3.20 pct. If Brazil had not been placed on non-accrual, which means that interest can be recorded as income only when payments are actually received, net interest earnings would have been 525.9 mln dlrs and net yield 2.99 pct. If Brazil does not resume payments, 1987 net would be cut by 72 mln dlrs, Morgan added. After the provision for loan losses, Morgans allowance for credit losses at the end of March totaled 953 mln dlrs compared with 910 mln at end-1986 and 815 mln a year earlier. It reported net recoveries of six mln dlrs after charge-offs of eight mln, compared with net charge-offs of 49 mln dlrs after recoveries of three mln a year earlier. Excluding Brazil, non-accruing loans at quarters end were 583 mln dlrs, down from 633 mln at end-1986 and 684 mln a year earlier. Non-interest expenses rose to 371.1 mln dlrs from 303.5 mln dlrs, with more than half the increase related to personnel costs, Morgan said.
Plans to rejuvenate Polands economy by reducing central government control would help reassure Western creditors that the countrys economy was safe to invest in, a senior Polish official said. The business of granting loans to Poland is not as bad a business as you might imagine, senior Polish government spokesman Jerzy Urban told a news conference in Stockholm. Urban, visiting the Swedish capital to deliver a lecture at the Foreign Policy Institute, announced earlier this week that Poland would soon offer shares to private citizens in state companies in a bid to make the economy more responsive. This was part of a major economic reform to be announced in the coming weeks, he said. Urban said the main problem with his countrys foreign debt burden of 32 billion dollars was short term interest charges but the long term looked more secure. He said he hoped talks under way with the Paris Club, grouping Polands main government creditors, would shortly solve the problem of short term servicing. Urban told reporters that debt servicing was hampering the expansion of the national economy, but that the new plans for economic reform would open new vistas for Polish exports. He criticised the blocking efforts of some Western governments, whom he declined to name, for putting political considerations ahead of economic co-operation. After the lifting of U.S. Sanctions against the Polish economy we considered all political obstacles had been removed, but that has not been the case, Urban said.
The Brotherhood of Railway and Airline Clerks said more than 5,500 former Republic Airlines workers will receive an average of 10,000 dlrs each as part of a stock payout. It said some members will receive almost 19,000 dlrs in payments. The total 56 mln dlr payment comes from an employee stock ownership plan negotiated by several unions representing Republic employees before the carriers takeover by Northwest Airlines in 1986, it said.
The Bank of France said it will offer 9.5 billion francs worth of negotiable Treasury bills at its next weekly tender on April 13. The total includes four billion francs worth of 13-week bills, 2.5 billion francs of two-year bills and three billion francs of five-year bills. At this weeks tender on Monday the Bank sold a total of 7.7 billion francs worth of 13 and 26-week bills against an original offer of seven billion and demand for 22.66 billion.
The Federal Reserve entered the U.S. Government securities market and offered to buy all maturities of Treasury notes and bonds, a Fed spokesman said. He said this coupon spokesman said. He said this coupon pass,pass," which adds permanent reserves to the banking system, was for regular delivery tomorrow. Dealers said that Federal funds were trading at 6-7/16 pct when the Fed announced the operation. Economists had been expecting the Fed to do this because of the need to offset seasonal factors expected to drain reserves heavily over the next few weeks. The Fed had previously offered to buy all coupon issues on March 31. Reuter"
Thermwood Corp said it is extending the expiration date of its 620,000 common stock warrants through Dec 31, 1987. It said the warrants to purchase one share of common stock, which have an exercise price of 3.00 dlrs, were to expire April 11. The company noted that its stock price has more than doubled since late last year and is now much closer to the exercise price of the warrants. Thermwood is trading at 1-7/8, off 1/8.
Tunisia is expected to tender April 14 for 100,000 tonnes of French soft wheat for delivery between May and August and which would be covered by the French export credit agency, COFACE, export credits, traders said here. No official tender has been announced yet by Tunisia, they said. France has sold a total of 200,000 tonnes of soft wheat to Tunisia since the begining of the current campaign which was covered by COFACE export credits. Of this amount, a total of 150,000 tonnes was exported by March 1, they said.
Southmark Corp said it acquired 28 long-term care facilities containing for approximately 70 mln dlrs in cash. It said the facilities, which contain approximately 2,500 beds in seven western states, were bought from Don Bybee and Associates, of Salem,Ore. The acquistion brings to 57 health care facilities acquired in the last three months, the company said.
Shared Network Technologies Inc said it entered into a cooperative marketing agreement with MCI Communications Corp involving services designed specifically for the university market. Under the agreement, the companies will jointly promote and support TelNet Plus, a combination of MCIs PRISM family of services, and TelNet, Shared Networks telephone billing and network management services, the company said. TelNet Plus keeps track of all calls made through a universitys telephone system, rates the calls and produces monthly invoices for each student or departmental account, Shared Network said. The system also offers a variety of reportes, which aid college telecommunications directors in controlling and managing their telephone systems, it added.
Western Digital Corp said its 47 mln dlrs of 6-3/4 pct convertible debentures due 2011, which had been called for redemption, were converted into 2,685,142 common shares. Reuter
Public Service Co of Colorado said it has reached a preliminary agreement to resolve a territorial dispute with Union Rural Electric Association of Brighton, Colo. The company said, . The company said, The tentative agreement protects UnionUnion's boundaries and also would set in motion a vote of UnionUnion's membership, which could lead to acquisition of Union by Public Service Co.." Union provides electrical service to about 14,000 members in cities and rural areas north of Denver. The company said the settlement, which is pending before the Colorado Public Utilities Commission, is under review by the Tri-State Generation and Transmission Association, which supplies power to Union, and is subject to approval by the Public Service Colorado board and UnionUnion's membership. It also will be discussed with the Colorado Rural Electric Association. It said legislation that would halt the acquisition of electric utility service territories by annexation will remain active in the Colorado House of Representatives until Union and Public Service assure legislators they are in agreement. Reuter"
Promising new findings in the use of a controversial experimental drug called Interleukin-2 as a cure for cancer will be published in the April 9 issue of the prestigious New England Journal of Medicine, according to a Wall Street analyst who has obtained an advance copy of the magazine. Among interleukins principal U. S. makers are Cetus Corp CTUS, headquartered in Emeryville, Calif., and Immunex Corp IMNX, based in Seattle, Wash. The journal, to be released late today, contains two articles reporting high remission rates several cancer types. The journal also contains a signed editorial concluding that the new results mark a significant milestone in the search for a successful immunotherapy for cancer. Interleukin-2, also known as IL-2, is a substance naturally produced by living cells in the laboratory. The drug is controversial because it was widely praised as a promising cancer treatment in early reports on its effectiveness in late 1985, only to come under criticism a year later for its failure to live up to its promise and due to its ravaging side effects. One of the new studies, conducted by Dr. William West of Biotherapeutics Inc of Franklin, Tenn., is particularly significant because it found far fewer harsh side effects after it changed the way in which the drug is administered. In that study, researchers administered IL-2 to 48 cancer patients and found a 50-pct remission rate for kidney cancers and a 50 pct remission rate for melanoma, a type of skin cancer, according to Prudential-Bache Securities Stuart Weisbrod, who obtained the advance copy of the magazine. For rectal and colon cancer, the researchers found no remissions, but none of the 48 patients treated had side effects serious enough to be placed under intensive hospital care, according to the article. In the second study, whose principal author is Dr. Steven Rosenberg of the National Cancer Institute, researchers administered IL-2 to 157 cancer patients and found a 33 pct remission rate in cancers of the kidney, a 27 pct rate in melanomas and a 15 pct rate in cancers of the colon and rectum. In the National Cancer Institute trials, a total of four patients died, the magazine reported, confirming the harshness of the drugs side effects as originally administered. Perhaps we are at the end of the beginning of the search for successful immunotherapy for cancer, said the editorial, signed by John Durant of Philadelphias Chase Cancer Center. These observations reported by Rosenberg and West surely did not describe successful practical approaches ready for widespread applications in the therapy of cancer patients, the editorial said. On the other hand, if they reflect, as seems possible, a successful manipulation of the cellular immune system, then we may be near the end of our search for a meaningful direction in the immunuotherapy of cancer, the editorial concluded.
Investment Canada said it has allowed the indirect takeover of Holt, Rinehart and Winston Canada Ltd., W.B. Saunders Co of Canada Ltd and Les Editions HRW Ltd by Harcourt Brace Jovanovich Canada Inc. The government agency said, however, Harcourt Canada has agreed to sell control of the firms to Canadian interests within two years. Harcourt Canadas U.S. parent, Harcourt Brace Jovanovich Inc HBJ, indirectly acquired the Canadian book publishing companies when it purchased Holt Rinehart and Winston from CBS Inc CBS last October.
Fleet Financial Group said its shareholders approved an increase in shares of the companys authorized common stock to 100,000,000 shares from 75,000,000 shares currently. The company said shareholders approved the move at the annual meeting in Providence today when the company reported that its first quarter earnings rose to 38.5 mln dlrs, or 73 cts a share, from 31.7 mln dlrs, or 60 cts a share, in the first quarter 1986. J. Terence Murray, chairman and president of Fleet Financial, said, Fleets mortgage banking activities in particular continued to produce signficant income increases (in the first quarter). Murray said Fleets mortgage servicing portfolio reached 22.1 billion dlrs by March 31, including 1.8 billion dlrs purchased in March.
management information system department
Madeira Inc said it signed a letter of intent to be acquired by Tradevest Inc through a stock-for-stock exchange. After completion of the transaction, Tradevest would own 90 pct of the issued outstanding stock of Madeira.
AVX Corp said it filed with the Securities and Exchange Commission a registration statement covering a 75 mln dlr issue of convertible subordinated debentures. The company named Shearson Lehman Brothers Inc as manager of the offering.
Highland Superstores Inc said its March sales rose to 50.6 mln dlrs from 47.4 mln dlrs a year ago. On a comparable store basis, it said the sales decreased nine pct.
4th qtr Shr loss 17 cts vs loss 22 cts Net loss 14.5 mln vs loss 18.0 mln Revs 27.3 mln vs 23.7 mln Year Shr 58 cts vs 1.01 dlrs Net loss 48.3 mln vs loss 84.2 mln Revs 111.7 mln vs 141.9 mln NOTE: Atlas Consolidated Mining and Development Corp of Manila. Translated from Philippine pesos at 20.3489 pesos to dollar vs 18.5571 in quarter and 20.2315 vs 18.2743 in year.
Cheap oil feedstocks, the weakened U.S. dollar and a plant utilization rate approaching 90 pct will propel the streamlined U.S. petrochemical industry to record profits this year, with growth expected through at least 1990, major company executives predicted. This bullish outlook for chemical manufacturing and an industrywide move to shed unrelated businesses has prompted GAF Corp (GAF), privately-held Cain Chemical Inc, and other firms to aggressively seek acquisitions of petrochemical plants. Oil companies such as Ashland Oil Inc (ASH), the Kentucky-based oil refiner and marketer, are also shopping for money-making petrochemical businesses to buy. I see us poised at the threshold of a golden period, said Paul Oreffice, chairman of giant Dow Chemical Co (DOW), adding, Theres no major plant capacity being added around the world now. The whole game is bringing out new products and improving the old ones. Analysts say the chemical industrys biggest customers, automobile manufacturers and home builders that use a lot of paints and plastics, are expected to buy quantities this year. U.S. petrochemical plants are currently operating at about 90 pct capacity, reflecting tighter supply that could hike product prices by 30 to 40 pct this year, said John Dosher, managing director of Pace Consultants Inc of Houston. Demand for some products such as styrene could push profit margins up by as much as 300 pct, he said. Oreffice, speaking at a meeting of chemical engineers in Houston, said Dow would easily top the 741 mln dlrs it earned last year and predicted it would have the best year in its history. In 1985, when oil prices were still above 25 dlrs a barrel and chemical exports were adversely affected by the strong U.S. dollar, Dow had profits of 58 mln dlrs. I believe the entire chemical industry is headed for a record year or close to it, Oreffice said. GAF chairman Samuel Heyman estimated that the U.S. chemical industry would report a 20 pct gain in profits during 1987. Last year, the domestic industry earned a total of 13 billion dlrs, a 54 pct leap from 1985. The turn in the fortunes of the once-sickly chemical industry has been brought about by a combination of luck and planning, said Paces John Dosher. Dosher said last years fall in oil prices made feedstocks dramatically cheaper and at the same time the American dollar was weakening against foreign currencies. That helped boost U.S. chemical exports. Also helping to bring supply and demand into balance has been the gradual market absorption of the extra chemical manufacturing capacity created by Middle Eastern oil producers in the early 1980s. Finally, virtually all major U.S. chemical manufacturers have embarked on an extensive corporate restructuring program to mothball inefficient plants, trim the payroll and eliminate unrelated businesses. The restructuring touched off a flurry of friendly and hostile takeover attempts. GAF, which made an unsuccessful attempt in 1985 to acquire Union Carbide Corp UK, recently offered three billion dlrs for Borg Warner Corp BOR, a Chicago manufacturer of plastics and chemicals. Another industry powerhouse, W.R. Grace (GRA) has divested its retailing, restaurant and fertilizer businesses to raise cash for chemical acquisitions. But some experts worry that the chemical industry may be headed for trouble if companies continue turning their back on the manufacturing of staple petrochemical commodities, such as ethylene, in favor of more profitable specialty chemicals that are custom-designed for a small group of buyers. Companies like DuPont (DD) and Monsanto Co MTC spent the past two or three years trying to get out of the commodity chemical business in reaction to how badly the market had deteriorated, Dosher said. But I think they will eventually kill the margins on the profitable chemicals in the niche market. Some top chemical executives share the concern. The challenge for our industry is to keep from getting carried away and repeating past mistakes, GAFs Heyman cautioned. The shift from commodity chemicals may be ill-advised. Specialty businesses do not stay special long. Houston-based Cain Chemical, created this month by the Sterling investment banking group, believes it can generate 700 mln dlrs in annual sales by bucking the industry trend. Chairman Gordon Cain, who previously led a leveraged buyout of Duponts Conoco Incs chemical business, has spent 1.1 billion dlrs since January to buy seven petrochemical plants along the Texas Gulf Coast. The plants produce only basic commodity petrochemicals that are the building blocks of specialty products. This kind of commodity chemical business will never be a glamorous, high-margin business, Cain said, adding that demand is expected to grow by about three pct annually. Garo Armen, an analyst with Dean Witter Reynolds, said chemical makers have also benefitted by increasing demand for plastics as prices become more competitive with aluminum, wood and steel products. Armen estimated the upturn in the chemical business could last as long as four or five years, provided the U.S. economy continues its modest rate of growth.
U.S. District Court of the Southern District in Ohio
The coupon on the 75 mln dlr, 15-year, convertible eurobond for Atari Corp has been set at 5-1/4 pct compared with indicated range of five to 5-1/4 pct, lead manager Paine Webber International said. The conversion price was set at 32-5/8 dlrs, representing a premium of 20.38 pct over yesterdays Atari share close of 27 dlrs.
Blocker Energy corp said an offering of 20 mln common shares is underway at 2.625 dlrs per share through underwriters led by Drexel Burnham Lambert Inc and Alex. Brown and Sons Inc ABSB. The company is offering 19.7 mln shares and shareholders the rest. Before the offering it had about 33.6 mln shares outstanding.
Key Tronic corp said it has received contracts to provide seven original equipment manufacturers with which it has not done business recently with over 300,000 computer keyboards for delivery within the next 12 months. The company said The new contracts represent an annual increase of approximately 25 pct in unit volume over last year.
American Midland Corp said Braodway Casinos Inc has entered into a letter of intent for a new company to be formed by Carnival Cruise Lines Inc and Continental Hotel Cos to operate Broadways planned hotel/casino in the Marina area of Atlantic City, N.J. American Midland has agreed to spin off its 8.2 acre Atlantic City property to Broadway, a new company in which American Midland shareholders would initially own an 85 pct interest.
London International Financial Futures Exchange
Datron Corp said it agreed to merge with GGFH Inc, a Florida-based company formed by the four top officers of the company. According to terms of the proposed transaction, each share of Datron common stock, excluding those shares owned by the four officers, will be bought for six dlrs a share, it said. Datrons officers hold about 73 pct of the total 896,000 Datron common shares outstanding. Upon completion of the proposed transaction, the officers of Datron would own 100 pct of the company. The merger is subject to GGHFs receiving financing for the plan, Datron said. Shareholders of Datron will be asked to approve the plan at their annual meeting to be held in June or July, and the merger is expected to be completed by July 31, it said.
two-week bank reserve maintenance period today
Roughly half of this years expected 130,000 hectare Dutch sugar beet crop is already in the ground, a spokesman for Suiker Unie, the largest sugar processor in the Netherlands, told Reuters. Conditions are generally good and the average sowing date for the crop is expected to be around April 11, against April 23 last year, and a 10-year average of April 14, the spokesman added. It is far too early yet to say what kind of output we can expect when it comes to harvest in September, but at least the crop is off to a very good start, he said. Last year, the Netherlands planted a record 137,600 hectares of sugar beet and produced a record 1.2 mln tonnes of white sugar, substantially more than the countrys combined A and B quota of 872,000 tonnes. This year, however, a self-imposed quota system has been introduced with the aim of cutting plantings to 130,000 hectares and reducing white sugar output to around 915,000 tonnes to minimise the amount of non-quota C sugar produced. Only farmers with a record of growing suger beet have been allotted quotas. This is expected to prevent the area being boosted by dairy or cereal farmers moving into sugar.
Storage problems with Brazils record grain crop are likely to result in losses of about five mln tonnes, an Agriculture Ministry spokesman said. Ministry spokesman Leonardo Brito, speaking from Brasilia, told Reuters he believed that about five mln tonnes of this years estimated crop of 65 mln tonnes would be lost. He said part of this would be the normal loss inevitable in harvesting, but that most of it would stem from storage problems. Brazil has a storage capacity of 66 mln tonnes, theoretically sufficient for the crop. But Brito said that the storage capacity was badly distributed. The states of Sao Paulo, Parana and Rio Grande do Sul had between them 70 pct of the nations capacity, but were responsible for only 50 to 60 pct of production. The biggest problems are concentrated in the Centre-West growing regions, where rising production has outpaced storage capacity. Brito said the Centre-West, whose crops include soya and maize, had between 30 and 40 pct of the nations grains production but only 20 pct of its storage space. In addition to the poor distribution of storage units, there is the problem that too much of the capacity is geared to storing grain in sacks, while not enough is suitable for storing loose grain, Brito said. Finally, there is a shortage of lorries to transport the crops. The sheer scale of the task in transporting the record crop has been evident from television reports, which have shown enormous queues of lorries waiting outside granaries.
Japans Ministry of International Trade and Industry (MITI),
General Motors Acceptance Corp, a unit of General Motors Corp, is raising 500 mln dlrs via offerings of 300 mln dlrs of notes due 1990 and 200 mln dlrs of notes due 1994, said lead manager Merrill Lynch Captial Markets. The three-year notes have a 7-1/4 pct coupon and were priced at 99.682 to yield 7.37 pct, or 52 basis points over comparable Treasury securities. The seven-year notes were priced at 99.473 with an eight pct coupon to yield 8.10 pct, or 71 points over Treasuries. Both issues are non-callable for life and are rated AA-1 by Moodys Investors and AA by Standard and Poors.
Exchanges and telecommunications authorities should abolish their restrictions on full and free dissemination of information to the investment and banking communities, Reuters Holdings Plc RTRS.L chairman Sir Christopher Hogg said. In the 1986 annual repoprt, he said lengthy negotiations had brought agreement with the Tokyo and London Stock Exchanges for fuller, but still not complete, access to market data through Reuter services. Many other markets maintain restrictions, he added. Hogg said members of some markets appear to believe that information restrictions protected their interests. In other cases, exchanges seem to be limiting the distribution of data in order to provide competitive advantage to their own commercial information businesses. He also noted that despite increasing liberalisation in the telecommunications field, some countries continue to protect their state monopolies at the expense of other economic sectors. Reuter dealing services remain excluded from such countries. As a result, banking communities serving entire economies are put at a competitive disadvantage, he added. Reuters increased its 1986 pre-tax profit by 39 pct from the previous year to 130.1 mln stg on a 43 pct rise in revenues to 620.9 mln stg. Earnings per ordinary share were up 47 pct to 19.4p. The annual shareholder meeting will be held in London on April 29.
Montedison SPA of Italy said net consolidated profit for its Agrimont Group, formed in June 1986, totalled 1.5 billion lire in 1986. Agrimont SPA, the holding company for Montedisons Agro-Industrial businesses, had sales of 810 billion lire and a net profit of about 1.1 billion lire, after amortization costs of 35 billion lire and a 13 billion lire reduction in the value of inventory due to falling market prices, Montedison said. Agrimont, still wholly owned by Montedison, is taking steps to be traded on the Milan exchange, the company said. The company said that 1986 was characterized by an unstable fertlizer market due to the weak dollar and the decline of international prices for products sold in Europe and the U.S where Agrimont operates through its Conserv division. In pesticides and in animal health care products Agrimont maintained its previous level of revenues and market share in 1986, Montedison said. Montedison said it named Ettore dellIsola to the newly created position of president of Agrimont. Montedison also said it named Renato Picco, managing director of Eridania SPA and Gianfranco Ceroni, managing director of Italiana Olii e Sifi, both of whom are members of the the Ferruzzi Groups management board, to Argimonts board of directors. Ferruzzi owns about 40 pct of Montedison, the company said.
Ameribanc Inc is raising 15 mln dlrs through an offering of convertible subordinated capital notes due 1995 with an eight pct coupon and par pricing, said lead manager Stifel, Nicolaus and Co Inc. The debentures are convertible into the companys common stock at 18.75 dlrs per share, representing a premium of 27.1 pct over the stock price when terms on the debt were set. The issue is non-callable for two years. It was not rated by Moodys Investors or Standard and Poors at the time of the pricing, Stifel said. Burns, Pauli and Co Inc co-managed the deal.
Eastman Kodak Co is issuing a 200 mln Australian dlr zero-coupon bond due May 12, 1992 and priced at 54-3/8 for an effecitve yield of 13.52 pct, said Merrill Lynch Capital Markets as lead manager. The securities, which are available in denominations of 1,000 and 10,000 dlrs, will be listed on the Luxembourg Stock Exchange. Eastman Kodaks outstanding issues are rated AAA/AA. There is a 7/8 pct selling concession and 1/2 pct combined management and underwriting fee. Payment is due May 12, 1987.
First Boston Corp analyst William Randol recommended the purchase of Texaco Inc today, saying the discount that investors have made in the share price to reflect the ongoing litigation with Pennzoil has been overdone relative to how we expect the case to conclude. Texacos stock rose 1/8 to 34-1/8. On Monday, the stock tumbled four points after the Supreme Court overturned a lower court decision that cut Texacos bond in the 10.3 billion dlr legal dispute with Pennzoil Co PZL to one billion dlrs. Yesterday, a Texas court granted a temporary injunction on the bond issue pending a hearing next week. The current litigation arose from Texacos buyout of Getty Oil Co in 1984. Pennzoil sued, arguing its earlier agreement to buy Getty was binding. Two Texas state courts upheld Pennzoils position. Randol, noting that the stock has suffered a great deal in the two years since the litigation was filed, said we recognize the legal problems but think investors have overdone it. He said the stock is selling at 48 pct of its asset value, and we think it represents a good value at this level.
Top officials of leading industrial nations arrived at the U.S. Treasury main building to begin a meeting of the Group of Five. Officials seen arriving by Reuter correspondents included West German Finance Minister Gerhard Stoltenberg and Bundesbank President Karl Otto Poehl, French Finance Minister Edouard Balladur and his central banker Jacques de Larosiere. Also seen arriving were Japanese Finance Minister Kiichi Miyazawa and Japans central bank governor Satoshi Sumita and British Chancellor of the Exchequer and central bank governor Robin Leigh Pemberton. There was no immediate sign of Italian or Canadian officials. Monetary sources have said a fully blown meeting of the Group of Seven is expected to begin around 3 p.m. local time (1900 gmt) and last at least until 6 p.m. (2200 gmt), when a communique is expected to be issued. Italian sources said Italian acting Finance Minister Giovanni Goria met Treasury Secretary James Baker last night. At those talks Baker apparently convinced Goria, who declined to attend the February meeting of the Group of Seven in Paris, that Italy would participate fully in any meaningful decisions.
Hanover Insurance Co said its stockholders approved a two-for-one stock split. As a result of the split, Hanover said it increases the number of authorized shares of capital stock from 10.4 mln, having a par value of one dlr, to 20.9 mln, also having a par value of one dlr. The stock split is payable April 30 to stockholders of record April 10, Hanover said.
Moodys Investors Service Inc said it affirmed the long-term debt ratings but cut the commercial paper to Prime-2 from Prime-1 of Avco Financial Services Inc, a unit of Avco Corp. Avco Financial has 2.5 billion dlrs of debt outstanding. For the paper cut, Moodys cited a higher risk profile inherent in the companys core business. Moodys said the affirmation reflected its assessment of a less diversified risk profile in the companys receivables. Affirmed were Avco Financials A-3 senior debt, Baa-2 senior subordinated debt and Baa-3 junior subordinated debt.
Helen of Troy Corp said it filed with the Securities and Exchange Commission a registration statement covering a 20 mln dlr issue of covertible subordinated debentures due 2007. Proceeds will be used for general corporate purposes, including possible repayment of bank debt, product development and possible acquisitions, Helen of Troy said. The company named Drexel Burnham Lambert Inc as sole underwriter of the offering.
NV Philips Gloielampenfabrieken PGLO.AS expects volume turnover to show a satisfactory increase in the first 1987 quarter, chairman Cor van der Klugt told the annual shareholders meeting. But an average dollar rate of only 2.07 guilders against the 2.69 guilders in the first quarter of 1986 would take turnover for January to March this year in guilder terms to less than the 13.06 billion guilders posted in the comparable 1986 period. He said all the first quarter figures were not yet available and would be released on April 29.
Iran decided to continue its operations east of Basra to destroy Iraqs forces, Iranian Prime Minister Mir-Hossein Mousavi told Tehran Radio. That seems to be the best spot for the complete destruction of (Iraqi President) Saddams forces. This is why it was decided that the operations would forcefully continue there, he said. At the same time, we have maintained our ability to act throughout the length of the fronts, Mousavi told the radio, monitored by the British Broadcasting Corporation. Tehran Radio reported over 1,500 Iraqi casualties today as Iran continued its Karbala-8 operation launched early yesterday. Iran said over 2,600 Iraqis had been killed or wounded yesterday. Iraq said today its forces had beaten back the latest attacks inflicting heavy casualties. Mousavi told Tehran radio that on the whole, our advances have broken the back of the military forces of Saddam. Earlier today the Iranian news agency IRNA said Tehrans forces were stabilising new positions after their assault on Iraqi lines defending Basra, Iraqs second city. In Baghdad, a military spokesman said Iraqi warplanes today destroyed an oil pumping station and a production unit at Irans Ahvaz field.
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NV Philips Gloeilampenfabrieken PGLO.AS shares are due to start trading on the New York Stock Exchange on April 14, Philips chairman Cor van der Klugt told the annual shareholders meeting. In March, the Dutch electronics group announced it would end its current over the counter listing on the New York NASDAQ system and move to the NYSE. Philips said the big board listing in New York is expected to boost its profile in the U.S., Where 10 pct of all outstanding Philips shares are held.
Senior Japanese officials tomorrow open talks with American trade negotiators in a last-ditch effort to avert new high U.S. tariffs to be imposed on a wide variety of Japanese electronic exports. Makoto Kuroda, vice minister of Japans Ministry of International Trade and Industry (MITI), is to hold two days of meetings with the Deputy U.S. Trade Representative, Michael Smith, and the Under Secretary of Commerce, Bruce Smart. The new tariffs, to go into effect on April 17, are in retaliation for Japans failure to adhere to an agreement to end dumping semiconductors in world markets at below cost and to open its home market to U.S. semiconductor shipments. They are to be imposed on goods which use semiconductors, including television and audio equipment and computers. Both U.S. and Japanese officials have said there was little likelihood the talks would do anything to avert the 100 pct duties on 300 mln dlrs worth of Japanese shipments. President Reagan announced the planned tariffs on March 27 after he said that close monitoring of the July 1986 U.S.-Japanese semiconductor pact convinced U.S. officials that Japan was not honoring the agreement. In making the annoucement, Reagan said I am committed to the full enforcement of our trade agreements designed to provide American industry with free and fair trade. Trade analysts said his move was aimed as much at Japans semiconductor trade practices, which are said to have injured the U.S. semiconductor industry, as Congress, which has complained about presidential timidity on trade issues. Congressional Democrats have pledged to enact aggressive trade laws to counter what they contend has been Reagans inaction to redress the growing U.S. trade deficit, which last year reached 169.8 billion dlrs. About one-third of the deficit was with Japan. Reagan said there were recent signs Japan was beginning to adhere to the pact and that was why he was not terminating it. Kuroda said on leaving Tokyo today he had no new proposals but did have an explanation of the semiconductor situation. He told the daily newspaper Ashai Shimbun that Reagans decision was based on inaccurate data and an exaggerated sense of MITIs power to control Japanese traders. The United States has excessive expectations., he said. To stabilize supply-demand relations which have been disrupted by excess inventories since 1985 will take some time. He also said that U.S. firms had not been aggressive enough in trying to sell in the Japanese market.
Nantucket Industries Inc said James Adams has been named president of its hosiery division, replacing John Wineapple, and Terry Hampton has been named vice president of manufacturing for the division, replacing Howard Fromkin. No reason was given for the changes.
Avnet Inc said it filed with the Securities and Exchange Commission a registration statement covering a 150 mln dlr issue of convertible subordinated debentures due 2012. Proceeds will be used for general working capital and the anticipated domestic and foreign expansion of Avnets businesses, the company said. Avnet named Dillon, Read and Co Inc as manager of the offering.
Sun Co's Sun Refining and Marketing Co subsidiary said it is decreasing the price it charges contract barge customers for heating oil in ny harbor by 0.50 cent a gallon, effective today. The 0.50 cent a gallon price reduction brings Suns heating oil contract barge price to 50 cts a gallon, the company said.
American Telephone and Telegraph Co said it has developed superconducting wires that can easily be formed into coils. It said when cooled to 91 degrees Kelvin, or 296 degrees below zero Fahrenheit, the wires conduct electricity without resistance. ATT said the wires are made of a barium-yttrium-copper oxide compound. It said while many engineering details remain to be worked out, The ability to draw the material into fine wire and to wind the wire into coils and other forms is key for many superconductor applications now being considered.
An audit submitted to the Georgia Public Service Commission claims that between 944 mln dlrs and 1.8 billion dlrs of the costs of the Plant Vogtle nuclear power station should be disallowed, a Southern Co spokeswoman said. Southerns Georgia Power Co subsidiary has a 45.7 pct interest in the plant and estimated earlier this year it would cost a total of 8.87 billion dlrs. Last year, the plants owners pledged to Georgia regulators they would limit the cost passed on to rate payers to 8.4 billion dlrs. The Southern spokeswoman said the company feels the report by OBrien-Kreitzberg is flawed and biased. She said the report was released yesterday by the state attorney general. Responding to the report today, Georgia Power Chairman Robert W. Scherer told a news conference the conclusions drawn by the firm are not only wrong -- they also reflect the same bias against nuclear power that these auditors have demonstrated in similar cases accross the country. Saying he was not suggesting Georgia power was without fault, Scherer said the audit identified several things I wish we had done differently. Scherer pointed out a report OBrien-Kreitzberg submitted to Georgia regulators in March 1986 projected Georgia Power would not finish Plant Vogtle unit one before the end of 1987. Noting unit one is finished, and we expect it to be in commercial operationg by June, he said the firms latest report ignored the earlier projection, gave the utility no credit for the completion and actually penalized us by suggesting that costs to maintain t he schedule be disallowed. Scherer said the latest audit alleges Georgia Power could have saved 95 mln dlrs if it had stopped using four shifts, seven days a week to speed construction three years sooner. He said this would have delayed completion of the plant for another year and it would have cost several hunderd million dlrs more. Noting the audit said costs were increased 600 mln dlrs by schedule delays totaling 20.5 months, he said First, we have the best concrete placement record in the industry, Second new government regulations after the Three Mile Island incident significantly increased construction time.
Union Rural Electric Association of Brighton, Colo
Brotherhood of Railway and Airline Clerks
Asarco Inc said it completed the sale of four mln shares of Asarco common stock to an underwriting group led by First Boston Corp. The underwriters sold the shares to the public at a price of 22.50 dlrs a share, the minerals and energy company said. Proceeds of about 86 mln dlrs will be used to reduce outstanding debt, it said. The offering included 3.5 mln shares announced April 1 and 500,000 to cover overallotments.
Hoechst Celanese Corp said it sent propsective customers a confidential report describing its polyester textile fiber facilities in North Carolina and South Carolina. The company did not disclose any prices. The report describes the facilities in Darlington County, S.C., and Fayetteville, N.C., the company said. The report also decribes related manufacturing, marketing, administrative and technical resources that could be made avialable to a buyer. Hoechst Celanese was formed Feb 27 by the merger of Celanese Corp and American Hoechst Corp. The merger took place after an agreement was reached with the Federal Trade Commission that certain domestic polyester textile fiber assets of the combined companies would be divested, it said. Hoechst Celanese said it has the option of divesting either the South Carolina facilities of the former American Hoechst or a package of polyester textile fiber facilities of the former Celanese.
Merck and Co Inc said a combination heart drug is available by prescription in the U.S. The drug is Vaseretic, a once-a-day medication combining an angiotensin converting enzyme inhibitor (ACE) and a diuretic to treat high blood pressure. The inhibitor is a new class of antihypertensive drugs. Last year Merck introduced Vasotec, an ACE inhibitor. The new drug combined Vasotec and HydroDiuril, a frequently prescribed diuretic.
The Association of White Metals has decided to publish a daily tin price here in French francs per 100 kilos, the French Federation of Non-Ferrous Metals said. The price, quoted for the first time yesterday, was introduced as the lack of tin quotes was causing problems for some French companies, a spokesman for the non-ferrous metals association said. Todays price was set at 4,776 francs per 100 kilos and Tuesdays at 4,790. The International Chamber of Commerce stopped publishing a tin price after the London Metal Exchange (LME) stopped tin trading on October 24, 1985. The Association has tested the basis it uses to calculate a French franc price over the last few months to ensure it was reliable, the spokesman said. The French franc price is pre-tax, for specified quality, a minimum 99.9 pct purity, at a French port or border railway station and a minimum delivery of 10 tonnes. The French Federation of Non-Ferrous Metals groups various metal associations including the Association of White Metals.
Standard and PoorStandard and Poor's Corp
Canadian Bashaw Leduc Oil and Gas Ltd said it agreed to merge with Erskine Resources Ltd. Terms were not disclosed. Ownership of the combined company with 18.8 pct for the current shareholders of Canadian Bashaw and 81.2 pct to the current shareholders of Erskine, the companies said.
Atlas Consolidated Mining and Development Corp
The Chicago Mercantile Exchange, CME, said it has added a new chief compliance officer and will expand its regulatory surveillance program. Paul OKelly, currently assistant regional administrator of the Securities and Exchange Commission, was named vice-president of compliance for the exchange, the CME said. The expanded compliance program, which calls for an increase in the exchanges compliance budget and addition of staff, was in response to recent criticisms that the CMEs current surveillance was not able to keep up with increased demands of recent volatility and volume, the CME said. The new surveillance program calls for the addition of three floor investigators and five compliance investigators, the CME said. Some of the new staff will monitor the exchanges new Computerized Trade Reconstruction system, scheduled to start July 1. In addition, three computer programmers will be added to assist in regulatory support for the exchanges management information system department. Recent criticism has been especially directed at the CMEs Standard and Poors stock index futures and options division. A special membership referendum to prohibit CME members from filling customer orders and trading for their own account in S and P 500 futures and options will be voted on April 13. In a letter dated March 12, CME chairman John Sandner and Executive committee chairman Leo Melamed urged members to reject the referendum in favor a series of new rules. Included in the rule changes was the requirement that futures brokers in the S and P pit manually record all personal trades to the nearest minute, intended to enhance the effectiveness of surveillance and compliance functions, We made a promise to our members that we have kept, Melamed said in a release today. He said the new surveillance program represents a commitment to a vigorous enforcement policy.
The Federal Reserve entered the U.S. Government securities market to arrange overnight System repurchase agreements, a Fed spokesman said. Dealers said that Federal funds were trading at 6-3/8 pct when the Fed began its temporary and direct supply of reserves to the banking system.
Celltronics Inc said its directors declared a one-for-10 reverse stock split of its common stock. It said the split will be payable April 17 to shareholders of record April 16.
Eastman Kodak Co is raising 25 mln dlrs through an offering of notes due 1997, said sole underwriter Morgan Stanley and Co Inc. The notes have a 7-1/2 pct coupon and an initial offering price of 99.625 to yield 7.34 pct, or 20 basis points over five-year Treasury notes. MorganMoodyMoody's Investors Service Inc and AA by Standard and PoorStandard and Poor's Corp. Investors can sell the notes back to the company in 1992. Reuter
The largest U.S. textile maker focused on its own business as its competitors found merger partners, but now Burlington Industries Inc may have restructured itself into an attractive takeover candidate, analysts said. The takeover spotlight fell today on Burlington, which rose 4-7/8 to 52-7/8 on speculation that investor Asher Edelman and Dominion Textiles Inc of Canada bought an almost five pct stake. A published report said Edelman and Dominion jointly acquired a stake in Burlington and were weighing a takeover offer. Edelman would not comment, and a spokesman for Montreal-based Dominion called the report just rumors. Burlington said it did not know if the report was true. Wall Street professionals said they were not convinced of the story or that Edelman and Dominion would be the victors if Burlington actually came into play. Arbitragers said past comments from Dominion, however, added credence to the speculation. Dominion has said that it was looking for a takeover in the U.S. Last year, Dominion unsuccessfully bid for Avondale Mills and has maintained a 120 mln dlr line of credit to be used for a U.S. acquisition. A Dominion spokesman said Canadas largest textile producer has been negotiating with many U.S. textile companies, but would not say whether Burlington was among them. There have been acquisitions in this area. Its not unusual that someone could be looking at Burlington after the housecleaning theyve done, said Eileen Gormley of Thomson McKinnon. Burlington sold its domestic operations, which made sheets and other linens, to J.P. Stevens and Co Inc for 110 mln dlrs last year. It also has reorganized management, and focused its operations on businesses that would be less affected by foreign competition, Gormley said. Theyve pulled back so as not to be a commodity marketer, said Gormley. She said in moving more heavily into industrial fabrics, Burlington bought C.H. Masland, which supplies carpets and other fabric to the auto industry. In the past, they just spent and never realized the return on the outlays they did make, she said. You look at their record over the year, and I think theyre poised to be more profitable than they had been in the past, Gormley said. She estimated 1987 earnings of 2.50 dlrs per share, up from 2.01 dlrs per share. Some analysts today recommended clients not buy Burlington at its current levels. Edward Johnson of Johnson Redbook said he recommends selling. He said he believes the stock is worth only about 50 dlrs on a takeover basis and about 46 dlrs on an earnings basis. Some arbitragers, however, said takeover values have been placed on the company of 60 to 65 dlrs per share. After Ashers (Edelman) recent history, a lot of people dont find him very credible anymore, said one arbitrager. Another, however, said Edelman succeeds in forcing managements to take steps to enhance shareholder values even if he doesnt win the target company. Edelman was unsuccessful last year in offers for Lucky Stores Inc and Fruehauf Corp. He did succeed in buying Ponderosa Inc. The stocks of other textile makers rose along with Burlington. J.P. Stevens STN climbed 5/8 to 44-7/8, and Fieldcrest Cannon Inc FLD, the result of a merger of Fieldcrest and Cannon, rose 1-1/8 to 39-3/4. West Point-Pepperell Inc WPM rose 1-7/8 to 67-1/8.
Freeport-McMoRan Oil and Gas Royalty Trust
General Electric Co Plc (GECL.L) (GEC) declined comment on rumours on the London stock market that it is planning another purchase in the U.S. Medical equipment field, in addition to its existing U.S. Subsidiary Picker International Inc. A GEC spokesman said that it is company policy not to comment on acquisition rumours. Stock Exchange traders said the rumour helped GECGEC's share price to rise 5p, to a final 206p from yesterday share price to rise 5p, to a final 206p from yesterday's closing price of 201p. Reuter
Pan Am Corps Pan Am World Airways said it began hiring pilots and flight engineers for the first time in 19 years. The need for about 130 to 150 new pilots has been created by the Pan AM shuttle, it said. Processing of applicants began March 30 and the first class of new-hire pilots will begin training on APril 15. Pan Am said it also completed the recall of more than 250 pilots. Most of the new hires will begin as flight engineers, but as many as 50 will move directly into the first officer position, it said.
Qtly distribution 7-1/2 cts vs 7-1/2 cts prior (excluding 2-1/2 cts special) Pay April 30 Record April 22 NOTE: Full name is Universal Medical Buildings L.P.