SPARATECH WILL RESTRUCTURE DET, EQUITY

ST. LOUIS Spartech Corp. has reached agreements with various parties to restructure its debt or equity holdings.

"This will result in significant improvements in the company's balance sheet," said Bradley B. Buechler, president and chief executive officer of the firm.

"We have agreed in principle with holders of approximately $27 million of the company's subordinated debt to exchange such debt for new issues of preferred stock or common stock of the company," said Buechler. "In addition, as part of the restructuring, British Vita, a significant investor in the company, will purchase additional common stock for $1.5 million and favorably adjust certain provisions of its existing preferred stock."

Buechler said the total restructuring will reduce interest-bearing indebtedness from $75 million to $46 million.

"The ratio of the company's funded debt to shareholders' equity will be reduced from 13 to 1 to approximately 1.4 to 1," said David B. Mueller, vice president of finance and chief financial officer. "This will reduce annual interest expense by $3 million and will allow Spartech to concentrate its operational activities on improving market share as well as operating margins."

The board of directors has approved the plan subject to receiving a fairness opinion from an independent investment banker. The restructuring is expected to be completed by mid April.

Spartech announced its 1991 audited results for the fiscal year ending Nov. 2. The company reported a net loss from continuing operations of $5.7 million, or $1.85 per share, compared to net income of $4.2 million, or 80 cents per share for fiscal 1990.

The company previously had reported several nonoperating charges incurred during 1991 that caused virtually all of its 1991 net loss from continuing operations. During 1991, a charge of approximately $2.5 million was made relating to severance liabilities resulting from the Oct. 1 resignation of Lawrence M. Powers, the company's former chairman of the board and chief executive officer.

An additional provision of $12 million, or $3.17 per share, was made to the company's loss reserve for its discontinued polyethylene film division, reflecting a previously announced shutdown of the Monroe, La., facility and the write-down of the company's investment in the Brooklyn facility to net realizable value.

"Fiscal 1991 was obviously a very difficult year for the company." said Buechler. "Not only did the recession have a negative impact on our ongoing businesses, but we incurred substantial nonoperating charges as well.

"Now that these special charges are behind us, we look forward to a return to profitability in 1992. This turnaround has already commenced in the first quarter of 1992, the results of which should be announced in about two weeks."