The Cincinnati Enquirer from Cincinnati, Ohio on September 25, 1991 · Page 14
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September 25, 1991

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The Cincinnati Enquirer from Cincinnati, Ohio · Page 14

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Cincinnati, Ohio
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Wednesday, September 25, 1991
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B-6 WEDNESDAY, SEPTEMBER 25, 1991 THE CINCINNATI ENQUIRER BUSINESS NEWS: 369-1962 Amex stocksB-9 Mutual fundsB-8 NASDAQ selectB-9 NYSE stocksB-7 o) J3) " I -J Ml V- I. II ii. ,ii i iJ Portfolio xan seag extends talks Federated wants to delay reorganization hearing BY JOHN J. BYCZKOWSKI The Cincinnati Enquirer 3100 3050 3000 2950 2900 Federated and Allied stores have been unable to line up loans the companies need to finance inventory after 30-year fixed loan rates fall to low of 9.14 THE CINCINNATI ENQUIRER Home-mortgage rates in Greater Cincinnati fell to their lowest level this year for the fourth consecutive week, according to figures released Tuesday by the Cincinnati Board of Realtors. The average rate on a 30-year fixed-rate mortgage dropped to 9.14 for the week ended Monday, down from 9.18 for the week ended Sept. 16 and 10.14 from a year ago. The average rate on a 15-year fixed-rate mortgage also dropped, from 8.83 last week to 8.78 this week, the Realtors' figures showed. The 15-year rate for the same period in 1990 was 9.95. It was the ninth straight decline for 15-year rates. they emerge from bankruptcy, forcing the company to extend negotiations with creditors. 2850LUUUUUUUUU Federated was expected to file an cal Bank as an adviser in lining up money to fund operations after Federated emerges from bankruptcy a loan called a working capital facility. Chemical Bank would also look into whether it would provide that financing itself or lead a syndicate of lenders. Chemical Bank officials declined comment. Carol Sanger, Federated's vice president for corporate communications, acknowledged that credit markets are tight but said Federated is exploring alternative approaches. She would not comment specifically on Chemical Bank or Federated's negotiations with creditors. Judge J. Vincent Aug Jr. will decide Thursday whether to delay hearings for two weeks. nancing. "We have no evidence at this point that they have been able to obtain working capital, and I imagine that that is a large part of the reason that they're delaying" the hearings, said Karen Gebbia, attorney for Federat-ed's unsecured creditors. How Federated pays for inventory for its 260 stores is critical to all creditors. "I don't think it's possible for any of the parties to reach any agreements concerning the plan or to make any recommendations concerning the plan without some kind of outline of the terms of working capital and some assurance that these companies are going to have working capital," Gebbia said. In August, Federated hired Chemi amended plan of reorganization today, and hearings related to that plan were to begin Oct. 3. But Monday, Federated told U.S. Bankruptcy Court that the M 14 10 1 IB IS ii Sept. Dow Jones 30 Industrials Dally highs, with closes at arrow tip Area-Interest stocks In Industrial average (NYSE change from previous day) AT&T -18 GE 78 P&G 78 Cincinnati Stock Exchange volume Tuesday 2,219,300 hearings need to be postponed two weeks so they can "continue discussions with creditors and others on a number of (plan of reorganization) related issues, including alternative ap proaches to post-reorganization fi Dow overlooks bad indicators The stock market overcame bad news on consumer confidence and auto sales Tuesday to post a modest gain. The Dow Jones average of 30 industrials closed up Cyclops, Armco try deal again $156.1 million merger should aid both 18.56 to 3,029.07. Advancing issues out numbered declines by about 5-to-4 on the New York Stock Exchange. Volume on the floor of the Big Board came to 170.30 million shares as of 4 p.m., up from 145.54 million in the previous session. Consumers more pessimistic Disturbing signs emerged Tuesday that suggested consumers are increasingly in secure and pessimistic, boding ill for the already shaky economic recovery and the upcoming Christmas shopping season. s$l : sS?r - -)-: s I . ;M-; f ' j ;' . Llh -J! I" fit.' yl ii., Jr -t I ill iTtfc--' i rL-to'V ' . ' t The Conference Board, an economic research organization, said its consumer confidence index skidded in September, the third straight drop for the widely followed barometer of consumer attitudes. Americans are growing more worried about the current state of the economy and less sure about business conditions six months from now, the Conference Board said. Consumer expenditures account for two-thirds of the gross national product, making the economy's recovery from recession dependent on consumer willing ness to spend. U.S. auto sales decline The Cincinnati EnquirerGlenn Hartong in eye on quart bottles as a material handler at the Valvoline Oil plant on River Road, keeps i Cardell Miller of St. Bernard, thev roll toward Dackanina. j I ZJ CJ Sales of North American-built vehicles plunged 15.8 in mid-September, with double-digit drops by the Big Three automakers more than offsetting a small rise in sales for Japanese companies, figures i indicated Tuesday. Sales of North Amen- Valvoline revs up motor oil can-made Japanese vehicles rose 4.8 Li mid-September, fueled by a 25.6 boost . in sales by Honda Motor Co. Ltd. But Firm's local plant to market synthetic products to general public General Motors Corp., the world's largest' BY MIKE BOYER The Cincinnati Enquirer Steelmakers Armco Inc. and Cyclops Industries Inc. hope the second time's a charm. After failing to complete an attempted merger last winter, the two companies Tuesday said they'll try again in a deal valued at $156.1 million. Parsippany, N.J.-based Armco will pay $22 in cash and common stock for each of Pittsburgh-based Cyclops' 7.1 million shares, unchanged from the earlier proposal. The earlier deal unraveled when Allegheny Corp., a major Cyclops shareholder, declined to purchase $100 million of Arm-co's preferred stock as part of the deal. This time, Armco said it would pay $11 in cash and $11 in common stock. The number of shares will be based on the average market price of Armco's common during a period before Cyclops' shareholders vote on the deal. News of the renewed deal pushed both companies' shares higher Tuesday in New York Stock Exchange trading. Armco closed up 25t at $4.75, and Cyclops closed up $2.75 at $19.87'i. In a joint statement, the companies said the mutual advantages of the merger overcame the earlier problems arranging the financing. "Our confidence in the significant synergies possible between Armco and Cyclops is even stronger than it was earlier this year," said Robert L. Purdum, Armco's chairman and chief executive officer. One new wrinkle is that James F. Will, Cyclops' president and CEO, will become president and chief operating officer of Armco. Purdum had retained the post of president since being named chairman. The marriage will particularly benefit the companies' stainless steel business. Armco has excess melting capacity at its Butler, Pa., specialty steel works, and Cyclops has a stainless steel finishing plant in Coshocton, Ohio. The merger could also provide an additional outlet for carbon steel made by Armco Steel Co., the Middletown, Ohio-based joint venture of Armco and Kawasaki Steel Co. Last year, Armco had revenues of $1.7 billion and 9,800 employees. Cyclops had sales of $1.2 billion and 6,400 employees. automaker, reported a 20.9 drop m vehicle sales for the Sept. 11-20 period Kish said there are several advantages compared with last year. Ford Motor Co. BY JEFF McKINNEY The Cincinnati Enquirer to synthetic motor oil compared with regu lar motor oil, including better engine protection, fuel economy and easier-to-start In a move to boost market share in a 1.5 billion industry, Valvoline Inc. has said its vehicle sales fell 17.4. Chrysler Corp.'s mid-September sales dropped an estimated 11.5. The nation's No. 3 automaker only reports sales figures for the month. The Associated Press estimate is based on the automaker's average engines in cold weather. begun making a new line of high-performance motor oil products at its Cincinnati u 'Ty'VW-- is - tswirurtc: " Valvoline decided to sell the products to the public after they were tested for two plant. monthly market share for the previous 12 years by professional race car drivers, According to NPD Automotive, a Houston-based research firm, Penn-zoil is the largest motor-oil manufacturer for passenger cars and light duty trucks with an 18.5 share of the market. Valvoline ranks second at 16.3. Havoline is a close third at 15, followed by Castrol, The products, originally designed for Kish said. The products will be available to months. Bell Atlantic expands consumers through mail order and to re race car drivers like Al Unser Jr., are now being made available to the general public, tailers who cater to owners of high-per said Martin A. Kish, a spokesman for Valvoline in Lexington, Ky. Valvoline has formance cars. "The synthetic oil market is a small Bell Atlantic Corp. Tuesday said it would acquire Metro Mobile CTS Inc. in a $1.65 billion stock swap, expanding the regional phone company's cellular phone not announced when the products will actually hit stores. Valvoline, a subsidiary of Ashland Oil 13.3, and Quaker pa" of our total sales, but this new product makes a tremendous statement network to New England, the Southwest and the Carolinas. Metro Mobile share holders will get $1.65 billion in Bell Atlan tic stock and Bell Atlantic will assume State, 11.9. "Hopefully, the exposure of this new product will help increase sales of other passenger-car products we make, such as other motor oils, greases, automotive fluids and filters," Kish said. Inc., has been testing the products by offering them via direct mail to high-performance car groups such as Sports Club of America and to show-car exhibitors. tor our emphasis on new technology, Kish said. Jim Jones, Valvoline's local plant manager, said the products are being produced in Cincinnati periodically based on supply and demand. $800 million in Metro Mobile debt. The deal, which the parties hope to conclude in six months, is the latest in a series of cellular-phone mergers as the industry Kish said the company now plans to sell moves toward seamless coverage of the Kish said the Cincinnati plant was se lected because it has the largest produc the products to consumers to use in private passenger cars. Valvoline, the na country with wireless networks. The trend will make calling and billing more convenient for users and will streamline Valvoline is marketing the new product as a synthetic motor oil that allows more horsepower in engines than petroleum-based oil. The product line also includes synthetic gear oil and synthetic grease. tion capacity. The Cincinnati plant is the largest of nine packaging plants Valvoline tion's second largest motor-oil manufacturer, also is celebrating its 125th administration and marketing for the cel operates in the United States. anniversary this year. lular companies, industry analysts said. Salomon plans for loss Salomon Inc. said Tuesday that it would create a reserve to pay for government fines and lawsuits stemming from its Ireasury bond violations, resulting in a OPEC split on oil output Saudi Arabia won't cut back production levels Pan Am Corp. files reorganization plan large charge against third-quarter earn- ings. The firm also said its balance sheet had shrunk by more than $40 billion because of asset sales to raise money amid borrowing difficulties during the scandal. Salomon asserted, however, that it re mained financially healthy. P&G settles with New York Procter & Gamble Co. has agreed not to run an advertisement that promoted its diapers as compostable in response to complaints from the Consumer Affairs THE ASSOCIATED PRESS NEW YORK Pan Am Corp. and its creditors filed a reorganization plan in bankruptcy court Tuesday, with Pan Am saying it faced a number of hurdles, including continued losses of substantial amounts of money. Pan Am's losses could conceivably force it to shut down before the reorganization plan is put into effect, the carrier said in its filing at U.S. Bankruptcy Court. Judge Cornelius Blackshear is scheduled to consider the plan at a hearing Oct. 24. "We recognize that there are roadblocks ahead, but we are working with Delta and the creditors committee to overcome them," Pan Am spokesman Jeffrey Kriendler said. Pan Am, which landed in Chapter 11 in January, has agreed to sell most of its assets to Delta Air Lines. It then hopes to move its headquarters from New York to Miami and operate as a small carrier that will be owned 45 by Delta and 55 by creditors, concentrating on service in Latin America and the Caribbean. Pan Am stock traded at 62.5t a share Tuesday oh the New York Stock Exchange. the fourth quarter with or without OPEC's blessing. "Nobody has got to approve what Saudi Arabia produces," he told reporters. Nazer's remarks undermined some strength in the petroleum market, which had been rallying on new tensions in the Persian Gulf caused by Iraq-U.N. standoff on Baghdad's compliance with terms of the cease-fire that ended the war. On the New York Mercantile Exchange, the price of benchmark light sweet crude had been up 29t a barrel on the Gulf uncertainty but finished up only 12t higher at $22.19. Nazer dismissed suggestions that the kingdom reduce its flow BY SALLY JACOBSEN The Associated Press GENEVA Saudi Arabia, the biggest exporter in OPEC, said Tuesday that it would keep oil flowing at a high level during the winter, but other cartel members called for cutbacks to boost crude prices. Ministers of the 13-nation Organization of Petroleum Exporting Countries opened a strategy session divided about their production level for the October-December period. After an hour-long session, they adjourned until today. Saudi Arabia's influential minister, Hisham Nazer, said his country intended to produce 8.5 million barrels of crude a day in to make room for increased output from Iraq, expected later in the year. "Saudi Arabia will not cut its production," Nazer said. The kingdom pumped about 8.4 million barrels a day last month, accounting for more than a third of OPEC production of 23.6 million barrels. The group's output last month exceeded by more than 1 million barrels a day the group's informal ceiling of 22.3 million barrels set for the July-September quarter. Nazer already has said he would like the ceiling raised but has not specified by how much. Other sources suggested that the kingdom favored a cap of as much as 24.5 million barrels a day. Office of New York uty that the ad misled consumers. The ad, published in national magazines in March and April, pictured a handful of soil-like compost next to a headline that said: "Ninety days ago this was a disposable diaper." In settling the dispute, P&G agreed to note in any future ads on the same topic that composting centers are limited. The company also agreed to pay New York $5,000 for the cost of the investigation. Compiled by Dick Benson from staff and news service reports

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