Business Digest

BUSINESS DIGEST

September 17, 2004

In The Region

Millenium Chemicals' restated results sought by SEC

Millennium Chemicals Inc., the Hunt Valley chemical maker being acquired by Lyondell Chemical Co., said yesterday that the Securities and Exchange Commission staff has asked for information on its financial restatements.

Last month, Millennium restated results for 2001 through 2003 and the first quarter of this year to correct deferred income-tax calculations related to its stake in Equistar Chemicals LP, a joint venture with Lyondell. The errors resulted from weak internal controls, Millennium said in a regulatory filing.

The restatement delayed the completion of Lyondell's $1 billion acquisition of Millennium until the fourth quarter. Millennium is the second-biggest producer of white pigment used to make paint and paper.

Lockheed Martin has deal to build military trucks

Lockheed Martin Corp. said yesterday that it will build military trucks targeted for military and government customers in the United States, Canada and Mexico under a licensing agreement with Britain's HMT Vehicles Ltd.

The Bethesda-based defense contractor plans to build a 4X4 vehicle weighing 8,800 pounds and a 6X6 version weighing 10,120 pounds, based on HMT's designs. Each vehicle will be able to tow up to 8,800 pounds of artillery.

Lockheed plans to build the trucks at its Systems Integration in Owego, N.Y. Terms weren't disclosed.

ConAgra to lay off 80 at Queenstown plant

Hot dog production at the ConAgra plant in Queenstown will stop today, and about 80 workers will lose their jobs when the plant closes by the end of the month.

ConAgra managers recognized many of the workers last week for their years of service at the plant. The plant, built in 1967 for another food-processing company and acquired by ConAgra in 1982, produced more than 2 million hot dogs a day.

ConAgra will consolidate its hot dog production at a Michigan plant.

Merrill Lynch gets OK to trade in power markets

Merrill Lynch & Co., the biggest securities firm by capital, won permission from federal regulators yesterday to trade power in U.S. wholesale markets, thwarting objections by utility owner Allegheny Energy Inc.

In an appeal of a July order by the Federal Energy Regulatory Commission granting the trading rights, Allegheny said fraudulent trades by Merrill in 1999 should disqualify the firm from participating in the power markets. The commission denied Allegheny's request for a new hearing.

Greensburg, Pa.-based Allegheny, formerly based in Hagerstown, bought Merrill's trading business in March 2001 for $490 million. The business collapsed in 2002, and now the two companies are suing each other over the sale. A trial in the matter is set for February.

USinternetworking buys Calif. services firm

Annapolis-based USinternetworking Inc., which sells and manages software applications over the Internet, has completed its acquisition of Appshop, a Santa Clara, Calif., company that provides similar outsourcing technology services to businesses both on and offshore.

Appshop's president and chief executive officer, Larry Abramson, will join USinternetworking as a senior vice president for sales and marketing, skirting the potential for layoffs acknowledged in June when USi announced its intentions to take over the California company. Appshop has 190 employees, and USi employs about 360.

Exact terms of the deal were not disclosed, but USi representatives have said they planned to acquire Appshop for between $41 million and $47 million in cash and stock.

Elsewhere

Northrop says head of Newport News shipyard to retire

The president of Northrop Grumman Corp.'s Newport News shipyard, the nation's only builder of nuclear-powered aircraft carriers, will retire early to pursue personal interests, the company said yesterday.

Northrop Grumman's board of directors elected C. Michael Petters to succeed Thomas C. Schievelbein, 51, on Nov. 1. Petters, 44, is now a vice president at the shipyard.

The announcement came a day after Northrop was criticized by the Navy's top acquisition official for "significant cost growth" and schedule delays in building the newest nuclear submarines. The Newport News shipyard is where Northrop is building its share of the submarines, along with General Dynamics' shipyard in Groton, Conn.

Corporate credit ratings for Delta are lowered

Delta Air Lines Inc.'s corporate credit ratings were lowered by Standard & Poor's and Fitch Ratings yesterday after the airline offered to exchange $680 million in debt to cut costs and avoid a bankruptcy filing.

S&P said Delta's offer may lead to a selective default on some bonds because the holders will get less than the original value, or a default on all bonds if the debt proposal fails and the airline seeks bankruptcy protection. Delta may save as much as $875 million in the exchange, S&P said.

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