WAINOCO OIL <WOL> RECAPITALIZING COMPANY
Wainoco Oil Corp said it is undergoing
a recapitalization program with a proposed offering of two mln
units consisting of common shares and warrants, the planned
redemption of its shareholder value rights, and a change in its
corporate structure that substantially reduces futurer income
taxes.
    Wainoco said it had filed a registration statement with the
Securities and Exchange Commission for the offering of the two
mln units consisting of two shares of common stock and one
warrrant per unit for a total of four mln shares of common
stock and two mln warrants.
    Included in the two mln units to be offered are 280,000
shares of common stock to be sold by <Waverly Oil Co>,
 a selling shareholder of Wainoco, it said.
    Proceeds of the offering will be used to reduce bank debt,
the company said. It said its outstanding 10-3/4 pct
subordinated debentures may be used at face value to pay the
exercise price of the warrants.
    Wainoco said the offering will be underwritten by  E.F.
Hutton and Co Inc, Kidder Peabody and Co Inc, and Smith Barney
harris Upham Inc.
    Simultaneous with the offering, Wainoco said it intends to
redeem its shareholder value rights attached to each common
share at 10 cts per right. Wainoco said without redemption of
the value rights, the company would not have sufficient
authorized and unissued shares of common stock to complete the
units offering.
    Due to certain covenants under the company's 10-3/4 pct
subordinated debentures, the value rights redemption is
contingent upon the success of the units offering, it said.
    Wainoco's said its shareholders purchase rights distributed
to the shareholders in June 1986 are unaffected and remain
valid.
    It said as a result of the liquidation of its Canadian
subsidiary into the parent company, it will be able to offset
all of its corporate overhead expenses and some of its
debenture interests against Canadian income for tax purposes.
    Wainoco said its pool of future Canadian tax deductions has
been increased by an amount which should generate savings that
will exceed existing deferred income tax liability.
    Existing U.S. tax loss carryforward benefits in the U.S.
are not materially affected, the company said. It added this
will considerably reduce future income taxes in Canada and add
to Wainoco's net income and cash flow for a number of years.
    John Ashmun, chairman of Wainoco, said "as a result of this
recapitalization, Wainoco will be in a strong financial
position.
    "Our net income and cash flow will benefit from lower
interest expense, lower Canadian taxes, and the considerable
savings achieved over the past few years from cost reductions,"
he said.
    Ashmun said the company will be able to "utilize enhanced
cash flow to develop its large resource base and explore for
additional reserves at a time when exploration and development
costs are low and opportunities abound rather than using a
disproportiaonate share of cash flow for debt service."
 Reuter
