THE VIRGINIAN-PILOT
Copyright (c) 1996, Landmark Communications, Inc.
DATE: Tuesday, November 5, 1996 TAG: 9611050426
SECTION: BUSINESS PAGE: D1 EDITION: FINAL
SOURCE: BY CHRISTOPHER DINSMORE, STAFF WRITER
LENGTH: 36 lines
Newport News Shipbuilding will in all likelihood be independent on Dec. 11.
Tenneco Inc., the shipyard's parent, announced late Sunday that the Internal Revenue Service has ruled that its restructuring plan, including spinning off the yard, will be tax-free to Tenneco shareholders.
Now the only thing standing in the way of the spinoff is a perfunctory vote of Tenneco shareholders planned for Dec. 10.
If the owners of Tenneco stock approve the restructuring, as expected, they will get one share of stock in Newport News Shipbuilding for every five Tenneco shares they own on Dec. 11.
After that Newport News Shipbuilding will be on its own.
Tenneco has been waiting for a favorable tax ruling from the IRS to proceed with the restructuring and the shareholders' vote.
Tenneco will conduct the vote at a meeting at its new Greenwich, Conn., headquarters. Tenneco was based in Houston until earlier this year.
``Seeking shareowners' approval is the final step in our comprehensive plan to create a powerful `new' Tenneco with both clear focus on our highly successful automotive parts and packaging businesses, and excellent potential for value creation,'' said Dana G. Mead, Tenneco chairman.
Newport News Shipbuilding didn't fit in Tenneco's vision of a fast-growing company. Navy spending on new shipbuilding has declined and the commercial market for the yard's services remains uncertain.
The yard's employment has declined to about 18,000 from nearly 30,000 little more than five years ago.
Still, the yard has a $3.6 billion backlog, including two aircraft carriers and nine petroleum product tankers. It also expects to begin preparing for the construction of the new attack submarine in the coming year. by CNB