Browning-Ferris to Invest in American Ecology

American Ecology, the Agoura Hills waste management company, has agreed in principle to sell $28.5 million in preferred stock, bonds and options to Browning-Ferris Industries, the Houston-based waste management conglomerate.

If Browning-Ferris, which has $3 billion a year in sales, exercises all of its options, it would own about 51% of American Ecology’s shares of common stock. Browning-Ferris has three years to exercise its options. In the meantime, Browning-Ferris will be allowed to name two representatives to American Ecology’s board of directors.

American Ecology has suffered from financial uncertainty since it was spun off as a separate company in 1984 from Teledyne, the Los Angeles conglomerate. Two low-level radioactive dumps that American Ecology formerly operated have been leaking, and the company has been embroiled in lawsuits over the cleanup plans for the dumps. Last May, the company settled a lawsuit with the state of Illinois by agreeing to repair one dump site and maintain it for 10 years. Last spring, American Ecology set aside a $3.9-million reserve as part of its settlement of the lawsuit.