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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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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): May 21, 1997
STERLING CHEMICALS HOLDINGS, INC.
(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C> <C>
Delaware 1-00059 76-0185186
(State or other jurisdiction of (Commission File Number) (I.R.S. Employer Identification No.)
incorporation or organization)
</TABLE>
1200 Smith Street, Suite 1900
Houston, Texas 77002-4312
(713) 650-3700
(Address of principal
executive offices
and zip code)
(713) 650-3700
(Registrant's telephone number,
including area code)
STERLING CHEMICALS, INC.
(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C> <C>
Delaware 333-04343-01 76-0502785
(State or other jurisdiction of (Commission File Number) (I.R.S. Employer Identification No.)
incorporation or organization)
</TABLE>
1200 Smith Street, Suite 1900
Houston, Texas 77002-4312
(713) 650-3700
(Address of principal
executive offices
and zip code)
(713) 650-3700
(Registrant's telephone number,
including area code)
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Item 5. Other Events
The press release issued on May 21, 1997, by Sterling Chemicals
Holdings, Inc., is filed as Exhibit 99.1 to this Current Report on Form 8-K, and
the contents of such Exhibit are incorporated herein by reference.
Item 7. Exhibits
Exhibit 99.1 -- Press Release dated May 21, 1997.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrants have duly caused this report to be signed on their behalf by the
undersigned hereunto duly authorized.
STERLING CHEMICALS HOLDINGS, INC.
STERLING CHEMICALS, INC.
(Registrants)
Date: May 22, 1997
By: /s/ Jim P. Wise
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Jim P. Wise
Vice President-Finance and
Chief Financial Officer
Exhibit 99.1
FOR IMMEDIATE RELEASE For Additional Information:
Jim P. Wise (713) 650-3700
STERLING CHEMICALS HOLDINGS AGREES TO PURCHASE
SASKATOON CHEMICALS FROM WEYERHAEUSER CANADA
Houston, Texas, May 21, 1997 . . . . . Sterling Chemicals Holdings,
Inc. (OTC:STXX) today announced that it has reached an agreement to purchase the
assets of Saskatoon Chemicals, Ltd. ("SaskChem"), a subsidiary of Weyerhaeuser
Canada. The transaction is expected to be completed as soon as possible within
the next sixty days. Terms of the sale were not disclosed. The acquisition will
be financed with a combination of debt and new equity.
SaskChem produces five products - sodium chlorate, caustic soda,
calcium hypochlorite, chlorine and hydrochloric acid. SaskChem has an annual
sodium chlorate production capacity of 55,000 tons. Sterling is the second
largest producer of sodium chlorate in the world and the acquisition will
increase Sterling's total annual production capacity of sodium chlorate by about
10% to over 500,000 tons.
Annual production capacity of other SaskChem products are: caustic soda
- - 40,700 tons; chlorine - 36,300 tons; calcium hypochlorite (65% basis) - 9,350
tons; and hydrochloric acid (35% basis) - 49,500 tons. Weyerhaeuser is expected
to continue to be a major customer under a long-term supply agreement.
Approximately 50% of the products manufactured by SaskChem will be sold to
Weyerhaeuser's pulp mills in Prince Albert, Saskatchewan and Kamloops, British
Columbia.
Caustic soda, chlorine, hydrochloric acid and sodium chlorate have
wide-spread application in the pulp and paper industry. The calcium hypochlorite
is used primarily for swimming pool water treatment, is sold under a long-term
marketing and distribution agreement, and is marketed across
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North America. SaskChem is one of three producers of calcium hypochlorite in
North America and the only one in Canada.
SaskChem employs 165 people at a facility located on 277 acres near
Saskatoon, Saskatchewan. Revenues for this business for calendar 1996 were
approximately US $45 million.
Frank P. Diassi, Chairman of the Board of Sterling said, "This
acquisition is an important strategic move by Sterling to increase our more
stable product lines. Styrene and acrylonitrile, our primary petrochemical
products, are cyclical in performance, and growth of pulp chemicals helps reduce
the effect of their cyclicality. Our pulp chemical business provides a
significant and stable contribution to our earnings before interest, taxes,
depreciation and amortization ("EBITDA"), and this acquisition will be acretive
to our financial results."
Robert W. Roten, President and Chief Executive Officer of Sterling,
said "The synergy created by this acquisition is important to Sterling and
Sterling Pulp Chemicals. We are expanding our geographic coverage in Canada,
gaining a strong, dedicated work force and retaining a solid customer base for
our products, while expanding our product lines. SaskChem is an excellent fit
with our core pulp chemical business and should provide operating synergies and
efficiencies. We also are pleased to expand our significant ongoing relationship
with Weyerhaeuser."
Based in Houston, Texas, Sterling Chemicals Holdings, Inc. is a holding
company that, through its operating subsidiaries, manufactures petrochemicals,
pulp chemicals, fibers, and provides large-scale chlorine dioxide generators to
the pulp and paper industry. The Company has a petrochemical plant located in
Texas City, Texas, pulp chemical plants in four Canadian locations and one U.S.
location, and a fibers plant located near Pensacola, Florida.
Certain statements in this news release regarding the acquisition of
the SaskChem assets, future expectations of the performance of such assets, the
Company's other businesses, and the
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Company's results of operations may be regarded as "forward looking statements"
within the meaning of the Securities Litigation Reform Act. Such statements are
subject to various risks, including the Company's high financial leverage, the
cyclical nature of the markets for the Company's products and raw materials, as
well as other risks discussed in detail in the Company's SEC filings, including
its Annual Report on Form 10-K for the year ended September 30, 1996.
Actual outcomes may vary materially.
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