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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):
JUNE 3, 1998
ARCO CHEMICAL COMPANY
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(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE
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(STATE OR OTHER JURISDICTION OF INCORPORATION)
1-9678 51-0104393
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COMMISSION FILE NUMBER (IRS EMPLOYER IDENTIFICATION NO.)
3801 WEST CHESTER PIKE, NEWTOWN SQUARE, PA 19073-2387
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(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
(610) 359-2000
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(REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE)
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Exhibit Index on Page 3
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Item 7. Financial Statements and Exhibits.
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99.1. Press Release dated June 3, 1998 of ARCO Chemical Company
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SIGNATURE
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.
ARCO CHEMICAL COMPANY
By: /s/ Robert J. Millstone
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Name: Robert J. Millstone
Title: Vice President
Dated: June 3, 1998
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EXHIBIT INDEX
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Exhibit Description Page
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99.1. Press Release dated June 3, 1998 of ARCO
Chemical Company 5
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EXHIBIT 99.1
FOR RELEASE: IMMEDIATELY
ARCO CHEMICAL COMPANY REACHES AGREEMENT FOR REDUCED ARCO OWNERSHIP
HIGHLIGHTS
. ARCO OWNERSHIP IN ACC TO BE REDUCED FROM 82% TO 50%
. SIGNIFICANT INCREASE IN PUBLIC FLOAT OF ACC STOCK
. STOCK REPURCHASE BY ACC FROM ARCO
. ACCRETIVE TO PRO FORMA FIRST QUARTER 1998 EARNINGS PER SHARE
Newtown Square, PA, June 3, 1998 -- ARCO Chemical Company (NYSE:RCM)
announced that it plans to repurchase from Atlantic Richfield Company
(NYSE:ARC) up to $850 million in common stock as part of an initiative
undertaken by ARCO to reduce its ownership in ARCO Chemical from 82% to 50%.
In addition to the stock repurchase, ARCO Chemical intends to file with the
SEC for a public offering of approximately 26 million shares of ARCO
Chemical common stock owned by Atlantic Richfield, which includes a 10% over-
allotment option. The actual number of shares to be sold to the public and
the number of shares to be repurchased by ARCO Chemical will be determined at
the time of the offering. If the over-allotment option is exercised in full,
the amount of stock to be repurchased will be reduced to approximately $600
million. The price at which ARCO Chemical will purchase stock from Atlantic
Richfield will be equal to the public offering price. The stock repurchase
is contingent upon the successful completion of the public offering. The
transaction is currently expected to close in the third quarter of 1998.
Commenting on the transaction, Marvin O. Schlanger, President and Chief
Executive Officer of ARCO Chemical Company, said, "We believe this is
excellent news for our shareholders. It will provide additional float for
our stock, thus opening a larger universe of potential shareholders.
Furthermore, we believe the
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stock repurchase from Atlantic Richfield represents an attractive opportunity
for our Company."
"The repurchase, had it occurred in the first quarter, would have been
accretive to our earnings per share," said Walter Tusinski, Senior Vice
President and Chief Financial Officer. ARCO Chemical intends to finance the
share repurchase with debt. "While this will require more financial leverage
than we have had in the past, we are confident of our ability to execute our
5-year $1.6 billion capital plan while maintaining our $2.80 per share annual
dividend," said Tusinski.
The $1.6 billion capital plan builds on ARCO Chemical's leadership
position in propylene oxide (PO) and derivatives and includes the PO/styrene
monomer (PO-11) plant under construction in Rotterdam and the adjacent world-
scale butanediol (BDO) plant as well as a number of cost-effective expansions
of existing facilities. The Company will continue to commercialize its
Impact technology for urethanes and will also continue its Manufacturing
Excellence Initiative. The $1.6 billion plan is 30% less than the $2.3
billion program previously announced. "The Company has become more efficient
in the use of capital and more disciplined in the selection of investments.
For example, capital for future polyols expansion will be about 25 percent of
the company's historical costs for such polyols investment," Schlanger
explained.
"While we recognize that this transaction will require stronger financial
discipline and a continued relentless focus on efficiency," Schlanger
concluded, "we believe the end result will be a more independent and
competitive company with broader options for building shareholder value."
ARCO Chemical Company is a leading worldwide manufacturer and marketer of
propylene oxide and derivatives and other intermediate chemicals. Its
products are used in a wide range of consumer and industrial goods, including
automotive components, cushioning, paints and coatings, plastics, home
furnishings and reformulated gasoline.
ARCO Chemical has scheduled a conference call for today, June 3, at 2:00
Eastern time. Hosting the call will be Marvin O. Schlanger, President and
Chief Executive Officer, Walter J. Tusinski, Sr. Vice President and Chief
Financial Officer, and Sami Ahmad, Manager, Investor Relations. To
participate, please dial (612) 288-0318 ten minutes before the conference is
scheduled to begin. A replay will be available Wednesday afternoon, June 3,
at 5:00 P.M. ONLY. To access the replay, dial 800-475-6701 (domestic) or
320-365-3844 (international), access code: 392997.
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# # # # #
A registration statement relating to the common shares will be filed with
the Securities and Exchange Commission. These securities may not be sold nor
may offers to buy be accepted prior to the time the registration statement
becomes effective. This release shall not constitute an offer to sell or the
solicitation of an offer to buy nor shall there be any sale of these securities
in any State in which such offer, solicitation or sale would be unlawful prior
to registration or qualification under the securities laws of any such State.
Except for historical facts, the matters discussed in this press release
concerning the company's outlook and business plans and the consummation of the
public offering and stock repurchase are forward-looking statements. Since
these statements are based on certain assumptions and involve risks and
uncertainties, they are subject to change at any time. Actual results could
differ materially from expected results based on numerous factors, including
changes in market prices, market demand, raw material costs or supply
arrangements; the effect of the additional borrowings for the stock repurchase
on the Company, including its capital expenditures and dividends; increased
costs of operation; loss of business from major customers; unanticipated
expenses; changes in financial markets, interest rates, and capital market
conditions; changes in general economic, business and industry conditions;
increased competition; the Company's ability to implement cost reductions; the
timing and scope of technological advances by the Company or its competitors;
the Company's ability to complete construction projects on schedule; adverse
developments in foreign markets; environmental or other regulatory developments;
legislative changes; and other risks detailed in the registration statement
relating to the secondary offering by ARCO or reflected from time to time in the
company's filings with the Securities and Exchange Commission, including the
company's Report on Form 10-Q for the quarterly period ended June 30, 1997.
For further information, contact:
Sami Ahmad, Investor Relations (610) 359-3171 or
Sallie D. Anderson, Media Relations (610) 359-5773.
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