VPI rejects restructuring plan proposed by T. Boone Pickens.
For Personal Use Only
>>>>>
biz.yahoo.com 
Tuesday June 4, 2002 6:05 pm Eastern Time
Vintage Pete Reiterates Business Plan, Debt Reduction
TULSA , Okla. -(Dow Jones)- Vintage Petroleum (NYSE: VPI - News) Inc. rejected a restructuring plan proposed by takeover veteran T. Boone Pickens, saying the plan entails "significant execution risk" and would fail to maximize shareholder value.
Instead, Vintage said in a press release Tuesday that it will rely on its own long-term strategic plan to reduce debt and boost value. Vintage Petroleum officials weren't immediately available to detail that plan.
Pickens, who is Vintage's largest outside shareholder owning about an 8.9% stake through his BP Capital investment vehicle, proposed in May to restructure Vintage as a company with little or no debt, and with continuing operations in Canada and South America.
The plan called for the creation of an income trust to hold all of Vintage Petroleum's Canadian producing properties and undeveloped acreage. It also involved the sale of Vintage's mature producing properties in the U.S. , and a public offering of Canadian Income Trust. BP Capital believed such sales would be "very tax efficient."
But Vintage said the plan is inefficient from a tax perspective and relies upon assumptions that the market will accept the trading value of a "pure-play" Latin American exploration and production company, especially one bearing a significant interest in Argentina .
Under the BP Capital plan, Vintage would hold Argentinean, Bolivian, Ecuadorian and Trinidad properties, as well as retain incentive rights to manage the Canadian Income Trust.
BP Capital representatives couldn't be immediately reached for comment.
Copyright 2002 Dow Jones
<<<<< |
