Private offering a boost to F&E Parent company of composting plant gets $1.8 million

April 20, 1996|By Ted Shelsby | Ted Shelsby,SUN STAFF

F&E Resources Systems Technology Inc., the parent company of a waste recycling and composting plant operator in Curtis Bay, announced yesterday that it has obtained $1.8 million through a private offering.

The money will be used to finance operations.

James Deveney, the company's general counsel, declined to identify the investor involved in the private transaction, but said, "It's a substantial institutional investor looking to take a stake in the company."

The announcement did not stimulate any new interest in F&E stock, which closed unchanged at $1.875 per share.

The cash infusion comes as two F&E subsidiaries are involved in bankruptcy actions.

Baltimore FERST L.P., the subsidiary that operates the struggling recycling center, filed for bankruptcy in February. The Chapter 11 reorganization filing, in U.S. Bankruptcy Court in Baltimore, came after a lender, Credit Suisse, moved to foreclose on a $35 million loan, according to Paul Williamson, F&E's executive vice president.

In another bankruptcy action involving the waste disposal company, Mr. Williamson said that a sister company, FERST O&M, which had operated the recycling center until last year, filed a Chapter 7 bankruptcy petition for liquidation last week. It listed assets of less than $50,000 and liabilities of more than $10 million.

Mr. Williamson said the liquidation of FERST O&M will not affect the recycling center's operations. He said he did not know how many people work for FERST O&M.

Mr. Deveney said F&E will use the $1.8 million in new capital to operate landfills that it owns in South Carolina, Georgia, Missouri and Michigan.

He said the money will help the company add a railroad spur to its South Carolina landfill and bring rail service to its other landfills.

Mr. Williamson said he could not say if any of the money would be applied to the recycling and composting plant, which needs repairs. He said that would be up to the court to determine.

The future of the recycling plant is in doubt. Both Mr. Williamson and Mr. Deveney said that F&E, which is expected to change its name to WasteMasters Inc. next month, is primarily in the business of operating landfills. Mr. Deveney said the recycling center is a secondary objective.

Pub Date: 4/20/96

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