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) January 22, 1997
Petroleum Heat and Power Co., Inc.
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(Exact name of registrant as specified in its charter)
Minnesota 2-88526 06-1183025
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(State or other jurisdiction (Commission File Number) (IRS Employer
of incorporation) Identification No.)
2187 Atlantic Street, Stamford, CT 06902
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (203) 325-5400
Not Applicable
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(Former name or former address, if changed since last report.)
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Item 5. Other Events
This Form 8-K consists of a copy of a Press Release from the Registrant
dated January 22, 1997.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
PETROLEUM HEAT AND POWER CO., INC.
(Registrant)
Date: 1/24/97 By: /s/ Irik P. Sevin
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Irik P. Sevin
Chairman of the Board, Chief Executive
Officer, Chief Financial and Accounting
Officer and Director
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Exhibit 99.1
NEWS ANNOUNCEMENT
CONTACT:
George Leibowitz Joseph N. Jaffoni
Senior Vice President David C. Collins
203/325-5470 Jaffoni & Collins
212/505-3015
I. Joseph Massoud
Director of Corporate Development
203-325-5458
FOR IMMEDIATE RELEASE
PETROLEUM HEAT AND POWER CO., INC.
STAMFORD, CT (January 22, 1997) -- Petroleum Heat and Power Co., Inc. ("the
Company") (NASDAQ:HEAT) announced today that in connection with the positive
initial results of its regionalization efforts, it has adopted a strategy to
delever its capital structure and has reaffirmed its commitment to
professionalize its management team, thereby enhancing its ability to pursue
opportunities offered by that program.
The following four actions are being undertaken as part of that strategy. First,
the Company will be offering for sale to institutional investors $30 million of
Exchangeable Preferred Stock under rule 144A of the Securities Act. Second, it
intends to reduce its annual dividend to $0.30 per share, from the current $0.60
per share. The additional equity and internally generated funds that these two
activities will provide will be used to finance the remainder of the Company's
operational restructuring, the acquisition of heating oil distributorships on a
selective basis, and possibly the reduction of outstanding long-term debt.
Third, the Company has reached an agreement in principal to extend from 1998 to
2002 the final maturity on $60 million of its institutionally held Senior and
Subordinated Notes. In conjunction with that extension, $30 million of those
Notes will be converted from Subordinated to Senior Debt. As a result of this
action, the Company is no longer seeking modifications to certain covenants on
its outstanding publicly held Notes.
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Fourth, Thomas M. Isola, the Company's Chief Operating Officer, has been elected
to the post of President, reflecting both his role in designing and achieving
the initial success of the regionalization and organizational restructuring
program, and the role Mr. Isola is expected to play in the Company's achievement
of further operating improvements. While historically the Company's growth has
come from its heating oil acquisition program, the future success of the Company
is expected to result, in large measure, from internal operating and marketing
advances, which should also serve to increase the positive financial impact of
future acquisitions.
In recognition of this strategy, and based on the anticipated financial results
from these actions, members of the Board of Directors, management and certain
other major stockholders have also announced their intention to reinvest the
cash dividends received on approximately 3.5 million common shares through the
Company's dividend reinvestment program.
Finally, the Company announced today preliminary 1996 year end results. Retail
heating oil volume is expected to be an estimated 455.0 gallons to 457.0
gallons, with EBITDA (excluding charges related to the Company's operational
restructuring program and accounting for the Company's investment in Star Gas on
an equity basis, including four quarters of cash distribution from Star Gas) of
$46.0 million to $49.0 million.
In commenting on these events, Irik P. Sevin, Chairman and CEO said:
"In the fourth quarter of 1996, the first winter quarter following
implementation of the regionalization program in Long Island, that region's oil
delivery, repair and maintenance activity and customer attrition statistics all
improved 5% to 15%, as compared with the same period in 1995. We are, of course,
very pleased with these initial results. However, what is probably more
important is that they suggest that the significant changes in how Petro
conducts and manages its business can produce very attractive improvements in
the Company's
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operating and marketing performance. These changes should not only improve the
Company's existing operations, but should also enable the Company's acquisitions
to become increasingly accretive. I also believe that our decision to pursue the
deleveraging of our Company and to adjust our common stock dividend will provide
us with the financial flexibility to more effectively capitalize on the
opportunities available to the Company.
While I am disappointed with the effect of December's extremely warm Northeast
weather on 1996 results, I believe that the fourth quarter's operating results
on Long Island suggest that the Company's fundamental operating strategy is
sound and that the Company is very well positioned for the future. I am
personally very excited about the promotion of Tom Isola to the position of
President. Tom has worked hard at sensitively transitioning the Company from an
entrepreneurial enterprise to a professionally managed business, while combining
the best features of both management styles. This promotion further serves to
ensure the Company's commitment to full implementation of its operational
restructuring."
Petroleum Heat and Power Co., Inc., is the largest retail distributor of home
heating oil in the nation, serving approximately 400,000 customers in the
Northeast and Mid-Atlantic states, including the metropolitan areas of Boston,
Providence, Hartford, Baltimore, New York and Washington, D.C. Through its
investment in Star Gas Partners, L.P. (NASDAQ:SGASZ), Petro has a major presence
in the propane distribution industry, serving 150,000 customers in 14 states
through 67 branches in the Midwest and Northeast.
The Exchangeable Preferred Stock will not be registered under the Securities Act
of 1933 and may not be offered or sold in the United States absent registration
or an applicable exemption from such registration requirements.
