MG Corp to trim operations in US

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The Independent Online
Metallgesellschaft, the troubled German engineering group rescued after heavy losses in the oil futures market, is planning to reduce sharply its US operations.

A restructuring plan disclosed yesterday that its US operation, MG Corporation, will pare activities in oil and oil-producing, gas and oil-refining.

Shareholdings of the main creditor banks, Deutsche and Dresdner, will be increased. Deutsche holds just under 13 per cent of the group and Dresdner around 12 per cent. The banks would convert half their outstanding debt into shares on exercising their subscription rights.

Kajo Neukirchen, Metallgesellschaft's chairman, said yesterday: "At present, we're simply trying to conduct operations in the US on a considerably narrower basis." He would not go into details.

In the year to September 1993, MG Corporation had sales of more than DM8bn. This figure is to be reduced to DM5bn.

Metallgesellschaft said operating profit for the first quarter to December fell from DM1.5bn to DM10bn.