Compounder ICO Inc. of Houston has closed three plastics-related sites and sold a fourth since October as it struggles with decreased demand and tries to restructure debt.
The closed ICO sites include:
* Tec-ma, a compounding and grinding plant in Verdellino, Italy.
* Wedco Machinery, a maker of grinding equipment in Bolivar, Tenn.
* A color compounding operation in Oyonnax, France.
Also, ICO sold Impact Colours, a color compounding site in Rushden, England, to an undisclosed buyer.
All employees from the Bolivar plant transferred to a grinding plant in Grand Junction, Tenn. Job-cut totals for the Verdellino and Oyonnax sites were unavailable, as was the transaction price for the Impact plant.
The closings leave ICO with an estimated 1,800 employees at 35 sites in North America, Europe, Asia and Australia.
Traditionally, ICO has generated two-thirds of its sales from plastics processing and one-third from oil-field services. Those businesses headed in different directions in its 2001 fiscal year, which ended Sept. 30.
ICO's total sales were relatively flat at $327 million, but plastics processing sales dropped 11 percent to $196 million, while sales from oil-field services climbed 25 percent to $131 million. Overall, ICO lost more than $13 million in 2001 after earning $2.5 million the previous year.
Complicating matters is Travis Street Partners' withdrawal of its offer to buy ICO for $3.10 a share. Travis Street, a Houston investment firm, voided its offer when ICO's planned sale of its oil-field business to rival Varco International Inc. fell through.
When a special committee of ICO's directors rejected Travis Street's offer in early August, ICO's per-share price was around $2.40. The shares now trade at about $1.20.
ICO shareholders elected five Travis Street officials onto ICO's board in June, ousting longtime ICO executives Al and Sylvia Pacholder. Travis Street, which had accumulated 5 percent of ICO stock, blamed the Pacholders for ICO's underperformance in recent years.
Travis Street's Tim Gollin was named ICO president and chief executive officer after the Pacholders left. Chris O'Sullivan, another Travis Street investor, was named the firm's chief financial officer.
The Travis Street group is up for re-election to four-year terms at ICO's annual meeting, set for March 15 in Houston.
In a Dec. 18 news release, ICO announced that it supported Travis Street's intentions to split ICO into separate plastics and oil-field companies, but said that prospects for such a split were hampered by $118 million of senior debt on ICO's books. The firm is looking into ways to restructure that debt.
``During the proxy contest fought last spring, Travis Street Partners pointed out on numerous occasions that the company's two major businesses ... had little, if anything, in common,'' officials said in the release. ``Management's experience over the last six months has confirmed this point of view.''