Document Dy3Y6jYmXMozGYqZ0nwNYpan

To: All VCM Employees Interoffice Communication From: Date: Subject: R. A. Conrad July 20, 1984 FORMATION OF VISTA CHEMICAL COMPANY VISTA I am very happy to report to you that Vista Chemical Company has officially begun operationsl The investment group and Du Pont reached final agreement and just today completed the sale of Conoco Chemicals' assets by signing all the necessary documents. The major financial transactions were also completed today. A few remaining details, relating mainly to inventory valuations, will be finalized within the month. More details are included in the attached news release, which was given to the press today. As employees of a major, new and independent chemical company, all of us have good reason to be proud. We can look to the future with confidence, because all of us have a stake in Vista Chemical. The new company starts off with a number of significant advantages, including an excellent mix of high-quality products, seven well maintained and efficient manufacturing plants run by an operations organization second to none, highly qualified and dedicated marketing, engineering, research and technical service teams, and a strong and experienced management group and support staff. The U.S. economy is on the rebound and we're looking at goodto-excellent sales prospects for our product lines over the next year or two. This is a critical time in Vista Chemical's history, because during this period we plan to make significant reductions in the company's debt. If every one of us does his or her job for Vista Chemical with the same dedication we have shown in the past for Conoco Chemicals, I have every confidence we'll rise to the challenge and be even more successful than before. Periods of transition between old and new are always busy and can be stressful. Now is no exception. It's most important that all of us remember, our commitment to safety. Be assured CUJH 000005751 Formation of Vista Chemical Company Page 2 that the safety and well being of all employees remain our most important objectives. There's no need to change our traditional safety philosophy: no job is so urgent or important that we cannot take the time to do it safely. R. A. Conrad Plant Manager br Distribution Bulletin Boards Supervisors CUH 0000057 FOR IMMEDIATE RELEASE Editorial Contacts: Mike Reynolds (713) 531-3210 Peg Donahue (713) 531-3211 HOUSTON, Tex., July 20 -- Vista Chemical Company, the nation's newest major chemical manufacturer, officially began operations today. Vista Chemical consists of Conoco Chemicals Company assets purchased for about $500 million in cash from the Du Pont Company by an investment group headed by executives of Conoco Chemicals. Final agreements between the investors and Du Pont were signed in New York this morning. The new company, a privately held corporation with headquarters in Houston, Texas, manufactures both large volume commodity and specialty chemicals. Employees number some 1500 worldwide. These include all employees of the Conoco Chemicals* plants and business areas involved in the purchase, plus over 200 employees who worked in staff or chemicals support positions with Conoco Inc. "Vista Chemical has an outstanding team of men and women who are pledged to provide the same high quality products and technical service our customers have always expected from Conoco Chemicals," said John D. Burns, president and chief executive officer of Vista Chemical Company and former executive vice president of Conoco Chemicals. "Over 35 former Conoco Chemicals managers are members of the Vista Chemical investment group and are actively involved in day-to-day operations OUH 0000057 of the new company. We are all committed to the success of Vista Chemical and are excited about the challenge and opportunity which lie ahead," said Burns. Gordon A. Cain, a former Conoco vice president who, with The E.F. Hutton Group Inc., organized the investment team, is chairman of the board of Vista Chemical. In addition to Cain and Burns, other members of the Vista Chemical board of directors include: John J. Langford and Robert E. Lehmkuhl, executive vice presidents of Vista Chemical Company; Clarke Ambrose, executive vice president of The E.F. Hutton Group Inc.; William R. Thomas, president and chairman of the board of Capital Southwest Corporation; and Norman Haekerman, President of Rice University. Sales in 1983 of S523 million for the Conoco Chemicals businesses included in the purchase would have placed the company about 445th within the Fortune 500, had it been a publicly held corporation at that time. Sales in 1984 for Vista Chemical are projected to be higher, due to the general upturn in the economy. The E.F. Hutton Group represented the investors in negotiating the terms of the loan agreements. Skadden-Arps, Slate, Meagher & Fiom were the principal attorneys for the investor group. Coopers & Lybrand served as financial consultants to the investors and will beVista Chemical's auditors. Vista Chemical Company's domestic manufacturing sites include: Lake Charles, La.; three plants which produce ethylene, normal paraffins, methyl chloride, ALFOL Alcohols, CATAPAL* Alumina, ALFONIC* Ethoxylates, vinyl chloride monomer and NALKYLENE* Detergent Alkylates; Baltimore, Md., and Hammond, Ind.; where plants produce NALKYLENE* Detergent Alkylates and derivatives; Aberdeen, Miss., and Oklahoma City, Okla.; where plants produce polyvinyl chloride resins, compounds and dryblends. -more- CUH 00000575^ Vista Chemical's research and development operations will lease Conoco facilities in Ponca City, Oklahoma for the next several years under terms of the purchase agreement. International operations for Vista Chemical are directed through three subsidiary companies; Vista Chemical Company Latin America, headquartered in Houston; Vista Chemical Company Far East, located in Tokyo; and Vista Chemical Europe, headquartered in Brussels, Belgium. Polyvinyl chloride manufacturing and commercial operations are managed through Vista Polymers Inc., a wholly owned subsidiary of Vista Chemical. Vista Chemical also holds the following interests in foreign affiliates: 50 percent of Nissan-Nalken Corp., a Japanese affiliate which manufactures detergent alkylate (the company formerly was known as Nissan-Conoco Corporation); 25 percent of Petroquimica Argentina, S.A., an Argentinian manufacturer of styrene, synthetic rubber and aromatics; 25 percent of Nippon Aluminum Alkyls, Ltd., a Japanese manufacturer of aluminum triethyl and other aluminum alkyls used for making catalysts. Du Pont's 50 percent interest in Petroquimica Espanola S.A. (PETRES A), a Spanish affiliate manufacturing detei'gent alkylate, was not included in the assets sold to Vista Chemical. Du Pont's interest in the affiliate has been sold to its partner, CEPSA. "Vista Chemical Company has an efficient mix of businesses,*' said Burns. "Our integrated set of manufacturing processes utilize a few feedstocks to produce large volume commodities such as linear alkvlbenzene and polyvinyl chloride, in which we are well-positioned. These businesses, in turn, fit well with our alumina, methyl chloride and alcohols specialty businesses," said Burns. -more- 00^7 000 C^vX Burns said that no substantive changes are planned in the company's operations and product lines in the near future. "Vista Chemical will direct its efforts toward operating the existing businesses as efficiently and safely as they were under Conoco," said Burns. "Vista Chemical will work hard to continue the achievements of Conoco Chemicals in the areas of health, safety and the environment, We're proud of the company's outstanding safety record. In 1983 Conoco Chemicals had no lost time accidents, and our five-year average lost work day rate is well below that of the U.S. chemical industry as a whole. All of us in Vista Chemical's management are committed to providing our employees with a clean and safe work environment, and we will continue to be a 'good neighbor' and a positive presence in the communities in which we operate,''said Burns. #### 7/20/84 T 0 T SH L CWH 000005756