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Tobacco Stocks Rise with More Positive
Outlook
U.S. tobacco stocks rose yesterday amid a more benign litigation outlook
and, analysts said, speculation that Philip Morris Cos. Inc. was
interested in buying Nabisco Holdings Corp., according to Reuters.
Shares of Philip Morris, the world's biggest tobacco company as well as
the owner of Kraft Food Corp, the largest U.S. food company, were up
nearly 10 percent by midday. Cigarette makers, whose share prices have
languished over the past year, received some help last week when the
Florida state legislature passed a bill relieving them of much of the
risk involved with posting a security bond in the Engle
class-action trial in Miami. Previously, the industry faced posting a
bond worth billions of dollars to file an appeal, which could have
brought the industry into bankruptcy. 'The stocks are moving up based on
a positive sentiment shift in terms of investors digesting that the
worse is behind these companies,' said analyst William Pecoriello of
Sanford Bernstein. 'Engle is not a bankrupting threat and Philip
Morris is back making food acquisition offers.' Offers for Nabisco Group
Holdings, which owns 80 percent of the food company, are due on Monday,
according to analysts.
Washington Times Owner Acquires UPI
The owner of The Washington Times, a company linked to the
Unification Church, announced yesterday it has acquired the nearly
100-year-old United Press International (UPI) wire service, according to
Reuters. UPI, which broke the news of President John Kennedy's
assassination, had fallen on hard times since its peak in the 1950s. In
1982, UPI's owner, the Scripps Howard newspaper chain, paid two
Nashville, Tenn., entrepreneurs $5 million to take it over, but the news
agency continued to lose money and clients, and sold off its assets -
including its overseas news pictures operation to Reuters - eventually
filing chapter 11. In an article yesterday, UPI said that News World
Communications, established by the Rev. Sun Myung Moon, head of the
Unification Church, 'plans to maintain UPI as an independent
news-gathering operation while upgrading its capacity with new
technologies and distribution practices.' Terms of the sale, which
includes such assets of UPI as its corporate name and trademark, were
not disclosed. The Washington Times, the more conservative of
the Washington newspapers, was established by Moon in 1982.
Dow Chemical, Thermatrix Agreement Approved by Bankruptcy
Court
Industrial company Thermatrix Inc., Knoxville, Tenn., announced
yesterday that the bankruptcy court approved the purchase and service
agreement between Thermatrix and The Dow Chemical Co., according to a
newswire report. The agreement sets forth the terms and conditions for
designing and supplying multiple Thermatrix Flameless Thermal Oxidizer
(FTO) systems to various Dow plant sites over the next several years.
'The approval of this agreement should provide a great deal of assurance
to our other customers and employees of the viability of the FTO
business,' said Thermatrix President Daniel S. Tedone. 'We are pleased
the bankruptcy court recognized the true value of this agreement to all
of our constituents and we are extremely appreciative of the confidence
that Dow has demonstrated in Thermatrix as evidenced by this commitment.
We continue to believe that the Dow relationship is the foundation for
Thermatrix's recovery and a profitable future.' As a result of the
ruling, The U.S. Trustee's office withdrew its motion for the
appointment of a chapter 11 Trustee in the case. The first two projects
have a combined value of more than $20 million for Thermatrix; the
initial design phase is nearly complete and the detailed engineering and
procurement will be started within the next several weeks.
Pittsburgh Penguins Break Even
The Pittsburgh Penguins hockey team, which emerged from bankruptcy in
September, did better than expected under former team member Mario
Lemieux's first year of ownership by breaking even on an operating
basis, increasing ticket sales and selling the naming rights to their
arena, The Associated Press reported. The Penguins had anticipated
losses of between $2 million and $3 million during the season following
its emergence from bankruptcy. 'It's pretty remarkable - this franchise
lost $13 million last season,' Lemieux said yesterday. 'Our franchise is
worth a lot more today than we paid for it, and I'm very optimistic
about the future.' However, Lemieux added, the team won't jump directly
into the free-agent market, and some ticket prices will rise a little
next season. 'We're going to keep getting our players through the draft,
the way we did it in the past,' Lemieux said. 'We just can't afford
(free agents)...that's why we went into bankruptcy. Sooner or later, you
have to pay it off when you sign a lot of guys. We've said all along
that we're going to run this team like a business.' After Lemieux and
his group of investors took over the team in September, the Penguins cut
ticket prices and designated some upper-tier seats as family sections,
with prices as low as $10; Lemieux said those seats will remain.
However, in spite of the team's improved financial state, chief
financial officer Ken Sawyer said they still aren't breaking even on a
debt-to-revenue basis. Lemieux's investor group is still paying off $23
million in bank debt and $15 million in past debt, including money owed
former players in deferred compensation. But the team is no longer
seeking out new investors because Lemieux said the current group is
happy with its current makeup, and some of the investors have increased
their stakes. 'I'm willing to put more money in,' he said. 'We have a
great group of investors who want to keep this group intact.'
Maritime Telecommunications to Purchase Bankrupt
CruisePhone
According to a newswire report, Maritime Telecommunications (MTN), a
Miramar, Fla., maritime communication company has announced they will
purchase specific assets of CruisePhone for approximately $1 million.
CruisePhone filed chapter 11 in New York and proceedings held last
Thursday allowed for CruisePhone to complete their sale to MTN. By June
31, CruisePhone is expected to complete the transfer of all services to
MTN. 'We look forward to serving these new customers and expanding our
state-of-the-art C-Band maritime telecommunication,' says Bradford
Briggs, senior vice president and general manager of MTN. MTN will
support several cruise lines, including Radisson Seven Seas Cruises'
Radisson Navigator and Western Geophysical's Western Inlet. MTN is a
subsidiary of the American Tower Corp.
Report Corrected in Nextel Stock Sell
Eagle River Investments, L.L.C., which owns or controls more than 40
million shares of Nextel stock, corrected a report yesterday that
insinuated that they would sell stock in Nextel Communications Inc., to
finance a venture in satellite communications according to a newswire
report. Eagle River announced two months ago that it had contributed
almost 3 million Nextel shares to ICO Global Communications. At the
time of the contribution, ICO had to borrow against the shares order to
use the proceeds to help them out of bankruptcy. A report on Friday
stated that Eagle River's principle owner Craig O. McCaw 'is using his
stake in Nextel CommunicationŠto help finance the acquisition of the
London-based ICO.'
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