PS Group’s Stock Plunges on Word of Potential Ills

PS Group, which rode to a high of $72.25 in New York Stock Exchange trading earlier this year after noted investor Warren Buffett showed a decided interest in the company, fell to $52.25 during the past week after a Dow Jones news story described potential regulatory problems at a PS Group subsidiary in Illinois.

The Dow Jones story suggested that the Illinois Environmental Protection Agency might take action against Recontek, a Newman, Ill.-based PS Group subsidiary that plans to open a commercial-scale hazardous waste materials recycling plant.

George Shortley, president of PS Group, on Monday dismissed the possibility of action by Illinois regulators as “old news.” PS Group had explained the Illinois situation in stock-offering registration materials filed with the federal Securities and Exchange Commission, Shortley said.

Shortley, who at the company’s annual meeting in La Jolla on May 28, had downplayed the potential for regulatory action, said the company has “heard nothing from Illinois regulators since our last meeting in early April.”

PS Group, the former owner of Pacific Southwest Airlines, owns slightly more than 81% of Recontek, which hopes to soon begin extracting copper, zinc and other precious metals from waste that will be shipped to the company by manufacturers. During the company’s annual meeting, executives handed out pieces of copper that were extracted during testing of the plant’s proprietary technology.

PS Group’s stock has risen dramatically in the past year, after word that Buffett, chairman of Omaha-based Berkshire Hathaway, was interested in PS Group. Berkshire Hathaway, which now holds 22% of PS Group’s stock, has petitioned the Securities and Exchange Commission to acquire up to 54% of PS Group’s stock.

Besides Recontek, PS Group’s principal interests are aviation fuel sales and distribution, commercial aircraft leasing and travel management.