Shareholders Get Upbeat Report from Management on Post-Bankruptcy Comeback
ATLANTA (AP) _ Texaco Inc. officials faced the company’s stockholders Tuesday for the first time since its post-bankruptcy restructuring, saying the problems that jolted the oil giant during this decade are over.
″After several years of some very special challenges, a new Texaco has emerged - a company with its own vision for greatness, a company with its sights set firmly on the future,″ Texaco Chairman Alfred C. DeCrane said at the company’s annual stockholders meeting in Atlanta.
DeCrane and James W. Kinnear, Texaco’s president and chief executive officer, presented an optimistic portrayal to the attentive gathering.
The officials said the White Plains, N.Y.-based company is in good financial health and ready to reclaim its position as an industry leader. Noting the recent Exxon Valdez oil spill in Alaska, Kinnear also stressed that Texaco is committed to preventing another environmental disaster.
The shareholders voted the company line on proxy matters, overwhelmingly approving two special dividends worth about $2 billion, a proposal to strengthen the company’s defense against unsolicited takeover offers, an employee compensation plan tied to performance, the hiring of a new auditor and the election of five directors.
The stockholders rejected two separate proposals urging the company to curtail its operations in South Africa and an item aimed at making proxy ballots secret.
Texaco, the nation’s third-largest oil company, asked a federal bankruptcy court in 1987 to protect it from creditors. The move followed a $10.3 billion judgment won against Texaco by Pennzoil Co., which charged Texaco with blocking Pennzoil’s plans to acquire Getty Oil Co.
The company also faced an attempt last year by New York investor Carl Ichan to take over Texaco.
Texaco emerged from Chapter 11 bankruptcy protection last year and launched a restructuring program that included the projected sale of more than $5 billion in operating assets. In February, the company completed the sale of Texaco Canada Inc. to Imperial Oil Ltd. for $3.24 billion.
Texaco also reached a ″standstill agreement″ with Ichan, who owns 42.2 million shares or 17.6 percent of the company’s common stock, under which he would cast his votes in accordance with the expressed will of other shareholders.
Texaco’s first quarter 1989 net income was $1.4 million.
″There are clear signs that we’re on the right path,″ DeCrane said.
″True, we are trimmer,″ he said. ″But we still provide fully 5 percent of the free world’s energy needs.″
Kinnear said Texaco is becoming more selective in its investments, including upgrading its refining capabilities, exploration efforts and laboratories. The company also plans to repurchase $500 million worth of Texaco stock by August 1990, he said.
Kinnear also discussed the Valdez spill, calling it ″regrettable.″
He defended Texaco’s environmental record, saying its policy is to ″ensure the most stringent training and prevention to ensure the safe operation not only of our tanker fleet and fleets, but of all our operations from rigs to pipelines to refineries and to distribution and marketing.″