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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: December 9, 1996
Date of earliest event reported: December 9, 1996
ASHLAND INC.
(Exact name of registrant as specified in its charter)
Kentucky
(State or other jurisdiction of incorporation)
1-2918 61--0122250
(Commission File Number) (I.R.S. Employer
Identification No.)
1000 Ashland Drive, Russell, Kentucky 41169
(Address of principal executive offices) (Zip Code)
P.O. Box 391, Ashland, Kentucky 41114
(Mailing Address) (Zip Code)
Registrant's telephone number, including area code (606) 329-3333
Item 5. Other Events
On December 9, 1996, the Registrant issued a press release announcing
several significant steps to improve the Company's profitability and enhance
returns to Ashland's shareholders. Ashland also announced that Providence
Capital, which had proposed nominating three directors to Ashland's board
at Ashland's annual shareholders' meeting has agreed to withdraw its
nominations.
The foregoing summary of the attached press release is qualified in
its entirety by the complete text of such document, a copy of which is
attached hereto.
Item 7. Financial Statements and Exhibits
(c) Exhibits
99 Press Release
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.
ASHLAND INC.
------------------------------
(Registrant)
Date: December 9, 1996 /s/ James G. Stephenson
------------------------------
Name: James G. Stephenson
Title: Vice President-Law
EXHIBIT INDEX
EXHIBIT NUMBER PAGE NO.
99 Press Release of the Registrant 5
dated December 9, 1996
FOR FURTHER INFORMATION:
Media Relations Investor Relations
Stan Lampe Bill Hartl
(606) 329-4061 (606) 329-5757
FOR IMMEDIATE RELEASE
December 9, 1996
Ashland Announces Plans
To Improve Profitability and
Shareholder Returns
Ashland, Ky. -- Paul W. Chellgren, chief executive officer of Ashland Inc.
(NYSE:ASH), announced today several significant steps to improve the
company's profitability and enhance returns to Ashland's shareholders.
These include reviewing strategic alternatives regarding certain business
units and realigning or reorganizing others. Efforts to evaluate and reduce
costs will also be implemented. Additional actions include the termination
of a continuous common stock offering program and the initiation of a
common stock repurchase program.
In announcing the program, Chellgren said, "Ashland's No. 1
priority is to improve returns in its refining and marketing segment. Many
of the elements in the plan announced today focus on that priority and are
aimed at continuing to build a basis for the long-term competitiveness of
this business."
Chellgren said, "Ashland has undertaken a rigorous review of its
strategic direction and has been actively soliciting the views of its major
investors."
The following are some of the plan's key elements:
o Establish a Petroleum Group, consisting of Ashland Petroleum,
SuperAmerica and Valvoline. J. A. (Fred) Brothers has been named Group
Operating Officer for the new Petroleum Group and will be responsible
for improving returns in these businesses. "Fred Brothers is a
seasoned performer who has been Group Operating Officer for Ashland
Chemical, Valvoline and SuperAmerica and a member of Ashland's Core
Management Group for many years. I am pleased that
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he is taking on this new role for the Company." said Paul Chellgren.
Reporting to Brothers will be Robert E. Yancey, Jr., president,
Ashland Petroleum Company; John F. Pettus, president, SuperAmerica;
and James J. O'Brien, president, The Valvoline Company.
o Reduce capital employed in refining. As part of this effort, 1997
capital expenditures for Ashland Petroleum are being reduced from $175
million to $150 million. Capital expenditures for refining will be
limited to $100 million, well below Ashland Petroleum's annual
depreciation of $122 million. The remaining $50 million in Ashland
Petroleum's 1997 capital budget will be earmarked for value-added
petrochemical and Ashland(R) branded marketing expansions. Future
capital spending for refining will remain materially less than Ashland
Petroleum's annual depreciation.
o Review options for strategic alliances. In view of recent developments
in the refining and marketing industry, Ashland will continue to
assess and actively explore strategic options regarding alignments or
partnering with others to enhance returns from this business.
o CS First Boston Corporation has been retained to evaluate strategic
alternatives including mergers and spin-offs, regarding Ashland
Exploration, Inc. The goal is to complete an evaluation and any
resulting business transaction before the end of calendar 1997,
subject to regulatory approvals, tax rulings and market conditions.
o Redirect capital freed as a result of reducing capital in our refining
and exploration segments to growth businesses, including Ashland
Chemical Company, the APAC highway construction group and Valvoline.
o Terminate a shelf registration statement providing for the offering
from time to time of up to $100 million in Ashland common stock. To
date, approximately $50 million of common stock has been sold under
this program.
o Implement a common stock repurchase program. This program will
authorize the repurchase of up to 1 million shares of Ashland common
stock annually. The stock repurchase program is designed to eliminate
further dilution of Ashland's stock through the operations of various
company benefit programs.
o Initiate a program to evaluate corporate general and administrative
expenses. Activities directly related to business unit support will be
allocated to those business units. Corporate G&A costs that are not
allocated to business units will be reassessed.
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Chellgren also announced that David J. D'Antoni, president of
Ashland Chemical, will become a member of Ashland's Core Management Group
and will report to Chellgren.
Chellgren further stated that Ashland will continue to encourage
the ongoing discussions between Ashland Coal, Inc. and Arch Mineral
Corporation, in which Ashland has separate equity ownership positions. The
two coal companies previously announced they are discussing a possible
business combination.
The new CEO said Ashland would report progress on the
profit-improvement plan as part of regular quarterly communications until
the program is substantially complete.
"Ashland is a return-oriented company with a goal to provide
superior returns on the investment made by our shareholders," Chellgren
said. "We will accomplish this goal by providing outstanding products and
services to our customers through a highly motivated and dedicated group of
employees and associates. Ashland will continue its traditional corporate
values and will remain committed to being a responsible citizen in the
communities where we live and work."
Ashland also announced that Providence Capital, which had proposed
nominating three directors to Ashland's board at Ashland's annual
shareholders' meeting, has agreed to withdraw its nominations. Herbert A.
Denton, president of Providence Capital, said, "Mr. Chellgren's program is
broadly responsive to our concerns and seems to have an appropriate sense
of urgency. We believe it is in the best interest of Ashland's shareholders
to give Mr. Chellgren, Ashland's new chief executive officer, some time for
implementation." Chellgren said, "Ashland recognizes that the views of
Providence Capital and those of other investors provided helpful
perspectives in formulating the program announced today." In connection
with the agreement by Providence Capital to withdraw its nominations,
Ashland agreed to reimburse Providence Capital for certain of its
out-of-pocket expenses not to exceed $75,000.
Ashland's annual shareholders' meeting will be held January 30,
1997, in Russell, Kentucky. Shareholders of record on November 25, 1996,
will be entitled to vote at the meeting. In addition to other agenda items,
shareholders at the annual meeting will elect six directors to Ashland's
board.
A worldwide energy and chemical company, Ashland Inc. is engaged
in petroleum refining and marketing; chemicals, highway construction, and
produces
- more -
natural gas, crude oil and coal. One of the nation's largest independent
refiners, Ashland is the largest distributor of chemicals and plastics in
North America and a leading worldwide specialty chemical supplier. Major
consumer brands include Valvoline(R) motor oils, Zerex(R) antifreeze and
Pyroil(R) automotive chemicals. Gasoline is marketed under the
SuperAmerica(R) and Ashland(R) brand names.