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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): July 10, 1998
THE GNI GROUP, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 0-10735 76-0232338
(State or other jurisdiction (Commission file number) (IRS employer
of incorporation) identification no.)
2525 BATTLEGROUND ROAD DEER PARK, TEXAS 77536-0220
(Address of principal executive offices) (Zip code)
Registrant's telephone number, including area code: (281) 930-0350
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Item 5. Other Events.
On July 10, 1998, the Company was awarded a contract to blend and
recycle a mixture of gasoline, polystyrene and benzene for the U.S. Navy. The
Company will be a subcontractor to Battelle Memorial Institute ("Battelle"), the
primary U.S. Navy contractor for the project. During the 25-month term of the
subcontract, the Company could recycle up to approximately 3.4 million gallons
of the fuel mixture and up to approximately 2.5 million pounds of shredded
aluminum canisters. However, under the subcontract, Battelle has no obligation
to ship the material to the Company, and management has been advised that
Battelle will be conducting further negotiations with two other firms for
additional contract awards. In the event that the Company disposes of the entire
volume, management estimates that the subcontract would generate approximately
$9 million of revenues for the Company.
Item 7. Financial Statements and Exhibits.
(c) Exhibits
Exhibit
Number Identification of Exhibit
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99.1 Press Release of The GNI Group, Inc. dated July 10, 1998
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Company has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
THE GNI GROUP, INC.
(Registrant)
By:/s/ Carl V Rush, Jr.
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Carl V Rush, Jr.
President
Dated: July 15, 1998
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INDEX TO EXHIBITS
Exhibit
Number Identification of Exhibit
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99.1 Press Release of The GNI Group, Inc. dated July 10, 1998
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EXHIBIT 99.1
[The GNI Group, Inc. Letterhead]
FROM: Pierpont Communications CONTACT: The GNI Group, Inc.
Carolyn Magnuson Carl V Rush, Jr.
Media Relations Investor Relations
(713) 355-5844 (281) 930-0350
FOR IMMEDIATE RELEASE
BATTELLE AWARDS NAVY
RECYCLING CONTRACT TO THE GNI GROUP
Deer Park, Texas, July 10, 1998 -- The GNI Group, Inc. (NASDAQ: GNUC)
announced today that it has entered into a recycling contract with Battelle
Memorial Institute, primary contractor for the U.S. Navy. The contract involves
processing and recycling up to 3.4 million gallons of Vietnam-era napalm and 2.5
million pounds of shredded aluminum canisters in which the napalm was originally
contained.
These materials have been stored by the U.S. Navy in Fallbrook,
California, since the 1970's. Napalm is a stable, gelatinous mixture of
gasoline, polystyrene and benzene. GNI will receive the material in 6,000-
gallon Department of Transportation approved containers, and the shredded
aluminum will be delivered in 55-gallon steel drums.
Carl V Rush, Jr., President and Chief Executive Officer of GNI, said he
is pleased that GNI has been awarded the contract. "This project has received a
lot of attention, because of the word 'napalm'," he explained. "However, the
napalm GNI will be receiving is less volatile than commercial gasoline. At GNI,
we are accustomed to handling materials of this nature. We do it safely and
responsibly, and that's how we will handle this project."
The first shipment of napalm is expected to arrive at GNI's plant in
about a week, and Battelle estimates the recycling project will occur over a
two- year period. GNI's plant in Deer Park will process the material so that it
can be recycled for use as an alternative fuel, replacing fossil fuels such as
oil and coal.
The GNI Group, Inc., headquartered in Deer Park, Texas, is engaged in
hazardous and non-hazardous waste management and the manufacture of specialty
chemicals.
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