2/22/76 by Joan Hirtz
NORTH BRUNSWICK The 360 employees of the Okonite plant on Route 1 here may find themselves on the opposite side of the corporate fence by June 30 — They could be among the owners of this company instead of just working for it.
They are among the approximately 1,590 Okonite employes in plants throughout the United States, moie than half in New Jersey.
If the employees proposal is approved, Okonite, would be the
largest employee owned firm in the United States, under the Employee Stock Ownership Trust (ESOT) plan, a company source said.
Okonite’s parent company, Omega-Alpha Co., is bankrupt. Okonite, its only operating asset, manufactures wire and cable.
In Dallas, Texas, where Omega’s headquarters are located, bankruptcy referee Dean Gandy is studying a request to allow the Okonite employes to purchase the firm for $38 million. Gandy; the Securities and Exchange Commission and stockholders, must give final approval to the reorganization plan filed Feb. 13 with Gandy. If the plan is approved, sale of stock to a still-to-be formed Okonite Employes Stock Ownership Trust would have to take place by June 30.
In addition to the $38-mi!lion cash transaction, a $3-million claim by Okonite against Ome-ga-Alpha on an unfunded pen-' on liability would be canceled. 'The claim would be assumed by Okonite.
The proposal is one of several under consideration, among them a joint .venture involving companies in Luxembourg and Switzerland. The employe bid, however,-apparently is receiving favorable consideration.
According to the company source, the court-appointed trustees of the bankrupt parent company said continued interest by several parties resulted in substantial increases being made over previous offers. The trustees said they regarded the employee offer as “superior to any other received the Okonite spokesman said. That offer was made through a trust composed of officers of Okonite and their legal counsel.
New Jersey Rep. Robert A. Roe, D~8th Dist, chairman' of the House Economic Development Committee, said government funding is involved if the employes take over the firm. He said the federal government wbuld provide a ’ grant to the State of New Jersey for the purpose of lending $$13 million sd employes can purchase the firm.
In addition, $2 million would be guaranteed by New Jersey's State Economic Development Authority, The rest of the money would be raised by the employees.
Roe noted the $13-miliion loan would be paid back over 25 years to the state and the money would go into an economic development revolving fund, according to provisions of the federal grant.
This would be the largest such economic development grant ever issued to any state, Roe said,
The money would be returned to the state for the express purpose of establishing this revolving development fund to provide monies for other economic development projects throughout the state.
Roe said the reasons for governmental concern with Okon-ite are threefold: fear of loss of jobs, loss of a firm from the state and the desire to keep a company with advanced technology in wire and cable manufacturing in New Jersey,
We’ve got to stabilize the economic base of the older cities in our state,” Roe noted, adding that jobs in urban centers need to be protected.
He applauded this involvement of state and federal government with private enterprise because “everybody is participating and coming up with something tangible.”
The congressman pointed out Okonite has plants in Paterson and Passaic as well as North Brunswick and Ramsey, where its headquarters are,
Okonite plants also are in Rhode Island, Massachusetts, Kentucky and California