MORE U.S. FIRMS OUTLINE RESTRUCTURING MOVES

More U.S. companies are taking measures to restructure operations and cut costs in the wake of disappointing U.S. market conditions.

Among the latest actions:

• Transco Energy Co., Houston, has approved restructuring plans that call for it to pull out of upstream oil and gas and coal operations, sell assets, and cut its workforce.

• Tenneco Inc. has cut capital spending and taken a charge against earnings spurred by cost cutting measures.

• Edisto Resources Corp., Dallas, has taken steps to focus upstream assets and trim overhead expenses.

TRANSCO RESTRUCTURING

Transco's restructuring steps are intended to reduce debt, improve financial flexibility, and boost earnings while sharpening its focus on core pipeline, gas marketing, and power generation businesses.

Transco's plan calls for reducing 1992 capital spending to about $275 million from $475 million estimated in 1991.

About 75% of the 1992 budget will be earmarked for Transco's Transcontinental Gas Pipe Line Corp. (TGPL) and Texas Gas Transmission Corp. subsidiaries, which Transco Pres. John P. DesBarres called "cornerstones of our business that will fuel our future growth."

He said Transco will continue to be an aggressive natural gas marketer and will pursue opportunities in independent power generation.

Streamlining will require elimination of about 500 jobs, saving the company about $31 million/year when fully implemented. The reductions will be achieved through early retirement, voluntary severance plans, and terminations.

The program includes at least $65 million in working capital reductions and a cut in the company's quarterly dividend to 15/share from 34/share.

TRANSCO ASSET SALE

Transco has identified at least $100 million in assets nonessential to core businesses and readily marketable the next 6-12 months at prices near book value, DesBarres said.

Included are certain coal, gas gathering and processing facilities, and nonstrategic joint venture pipeline facilities.

DesBarres does not expect an early sale of Transco's coalbed methane development project.

"Divestiture of the coal and exploration and production businesses will be accomplished in the next 18-24 months as financial markets, industry conditions, and commodity prices warrant," he said. "We will balance our desire for prompt action with our need to realize a fair value."

Transco also will sell about $100 million in common stock when the restructuring plan is under way and market conditions allow.

TENNECO

Tenneco Inc. has cut its 1992 capital spending budget by $250 million to $606 million.

That's about $200 million less than projected outlays for 1991.

In addition, Tenneco has taken a $504 million charge against third quarter earnings as a result of cost cutting programs.

It recently disclosed efforts to trim capacity, rationalize product lines, and cut operating costs in its farm and construction unit and chemical operations.

Tenneco's charge includes $239 million for workforce reductions, $143 million for product rationalization, and $122 million for plant closings.

EDISTO

Edisto plans to raise as much as $50 million through sales of oil and gas assets.

After completing the sales, Edisto's exploration and production activities will be focused primarily in the Gulf of Mexico. The company said Gulf of Mexico gas reserves have greater access to marketing and transmission systems and thus can be used to support its downstream activities in the gas market. Edisto's pipeline unit has begun construction on a 124 mile extension of its pipeline serving the St. Louis market. The pipeline from St. Louis into Franklin County, Mo., and west along the Interstate 44 corridor to Fort Leonard Wood will be funded by a recently completed $25 million project financing credit facility. The Franklin County extension should be in service by yearend, and construction of the spur to Fort Leonard Wood is to be complete by June 1992.

Meanwhile, Edisto has begun a significant cost cutting program intended to cut general and administrative expenses across the board by more than $3 million/year. That includes a substantial cut in its workforce.

In addition, Edisto expects to save more than $4 million by redeeming 208,083 senior preferred shares by issuing about 949,400 shares of its common stock rather than redeeming them for cash. It plans to earmark the savings for its Gulf of Mexico drilling program and a planned cut in debt in its exploration and production unit.

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