Business Desk

This article is from the archive of The New York Sun before the launch of its new website in 2022. The Sun has neither altered nor updated such articles but will seek to correct any errors, mis-categorizations or other problems introduced during transfer.

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INTERNATIONAL


STELMAR SHIPPING ACCEPTS $67 7 MILLION BUYOUT BID


Stelmar Shipping Ltd., a Greek-based oil transporter, yesterday said it has agreed to be acquired by affiliates of Fortress Investment Group LLC for about $677 million. Fortress, which is based in New York, is an investment firm with about $10 billion under management. Stelmar, which operates 41 oil tankers, said the $38.55-a-share purchase price represents a 55% premium over the share closing price on May 14, the last trading day before tanker owner and operator OMI Corp. of Stamford, Conn., announced it was seeking to merge with Stelmar. Stelmar’s board refused to hold talks with OMI, and the bid was abandoned, despite the support of Stelmar founder Stelios Haji-Ioannou. He and his family own 27% of the company. The price to be paid by Fortress also represents a premium of 8% over the closing price of Stelmar’s stock Friday. The stock finished at $35.55 on the New York Stock Exchange. Stelmar’s shares closed at $38.15 yesterday, up $2.60,or 7.31%,on the Big Board. The transaction is expected to close during the fourth quarter.


– Associated Press


NATIONAL


DELTA, PILOTS UNION INK TENTATIVE AGREEMENT ON RETIREMENT ISSUE


Delta Air Lines’ pilots union agreed yesterday to allow the struggling carrier to bring pilots out of retirement on a limited basis to deal with staff shortages that threaten to ground flights. The move came after the company agreed not to terminate the pilots’ pension plan before February even if it files for bankruptcy. The tentative agreement must be ratified by the 7,500 active Delta pilots. The nation’s third-largest airline has warned that it would have to file for bankruptcy if did not stem a wave of early pilot retirements by the end of September. The agreement still does not resolve Delta’s larger problem: getting the pilots to agree to $1 billion in concessions. The Atlanta-based airline has also warned of the possibility of a Chapter 11 filing without the concessions. Delta fears that its pilots could jump ship en masse because they are worried about their pensions amid United Airlines’ threat to terminate its employee retirement plans. Several hundred Delta pilots have retired early in recent months, and more have threatened such moves, the chief executive, Gerald Grinstein, has said.


– Associated Press


NIKE’S 1ST-QUARTER NET RISES 25%


Nike Inc., the world’s biggest athletic shoe maker, said first-quarter earnings surged 25% as demand for Shox running shoes and Converse sneakers fueled the fastest American sales gain in more than a year. Net income beat analysts’ estimates, rising to $326.8 million, or $1.21 a share, from $261.2 million, or 98 cents, a year earlier, the Beaverton, Ore.-based company said in a statement. Sales in the quarter ended August 31 jumped 18% to $3.56 billion, led by Asia.


Nike’s chief executive, Phil Knight, 66, added lines of Shox for women and offered updated versions of Converse’s Chuck Taylor canvas shoes for the first back-to-school season since buying the company a year ago.


That led sales to rise 12% in America Nike’s top market. Television advertisements during the Olympic Games featuring athletes such as tennis star Serena Williams also spurred demand.


Orders in America rose 11%, the biggest increase in more than seven years, helped by the offering of exclusive shoe lines through retailers Finish Line Inc. and Foot Locker Inc., Nike’s biggest customer. Shares of Nike rose $1.44 to $78 in New York Stock Exchange composite trading. They had risen 12% this year.


– Bloomberg News


IN THE COURTS


FIRST ENRON TRIAL BRINGS A WALL STREET TOUCH


A judge overseeing the first criminal trial involving former Enron Corp. executives told prospective jurors yesterday he didn’t expect them to have “come out of some hole somewhere” and not know of the former energy-trading giant.


Those chosen for the panel will decide if four former Merrill Lynch & Co. executives and two former midlevel Enron executives participated in the sham sale of electricity-producing Nigerian barges to the brokerage in 1999 to prop up Enron’s earnings.


None of the six defendants have the notoriety of Enron’s former top managers, such as founder Kenneth Lay and former CEO Jeffrey Skilling.


Prosecutors contend that Merrill Lynch’s hunger for lucrative banking business from Enron prompted the Merrill Lynch defendants to help push through the sham sale nearly two years before Enron crashed in scandal. While not alleged to have contributed to Enron’s December 2001 bankruptcy, prosecutors say it’s one of many schemes the company used to polish a facade of success.


The six defendants are charged with conspiracy and fraud, and three face additional charges of lying to investigators or a grand jury. Prosecutors say they knew the sale was a sham because Enron secretly promised to buy back the barges.


The defendants, who have pleaded innocent, are: Daniel Bayly, former chairman of investment banking for Merrill Lynch; Robert S. Furst, the former Enron relationship manager for Merrill Lynch; James A. Brown, former head of Merrill Lynch’s asset lease and finance group; William Fuhs, former Merrill Lynch vice president who answered to Brown; Dan Boyle, a former finance executive on Fastow’s staff; and Sheila Kahanek, a former in-house Enron accountant.


– Associated Press

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NEW YORK SUN CONTRIBUTOR

This article is from the archive of The New York Sun before the launch of its new website in 2022. The Sun has neither altered nor updated such articles but will seek to correct any errors, mis-categorizations or other problems introduced during transfer.


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