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INTERLINE RESOURCES CORP. GETS $2.5 MILLION LOAN FOR EXPANSION

SHARE INTERLINE RESOURCES CORP. GETS $2.5 MILLION LOAN FOR EXPANSION

Interline Resources Corp., which developed technology to economically recycle used oil, has received a $2.5 million loan from a North Carolina investor that will help it in its goal to build or license recycling plants around the world.

The loan, from Maurice D. Sabbah, a 17 percent owner of Interline, will be used for working capital in spreading the technology, said Interline spokesman Mark Fredrickson. Sabbah is chief executive officer and chairman of the board of Fortress RE, a reinsurance underwriter. The company is seeking joint ventures in developing more of its environmentally clean recycling plants.The company developed technology that recycles used oil chemically, without casting off pollutants into the air. The parts for the recycling plants are manufactured in Sandy, said Fredrickson. A young company, only one plant is in operation in the United States, and that one, in Salt Lake City, is still in the evaluation mode.

The Salt Lake plant, operated by Genesis Petroleum, a subsidiary of Quaker State, went into operation in late February. The company has six months to prove the quality of the yield and the viability of the technology economically, said Fredrickson. It is refining used oil into diesel fuel, Fredrickson said.

The plant is meeting expected yield, he said, but was taken off line recently to replace defective mechanical equipment. That extended an agreement for Genesis to purchase $600,000 in Interline common stock by 30 days. A Quaker State spokesman said the defective parts were supplied by third-party suppliers.

Interline has two recycling plants under construction, one in Stoke, England, and the other in Seoul, South Korea. The plant in England will begin operations this summer, refining used oil into a base lubricant or a diesel fuel. The South Korean plant is just beginning construction, and will also recycle used oil into base lubricants or diesel fuel, depending on the market.

A fourth plant, in Dubai, near the Persian Gulf, recycles the tailings, or bottoms of other recycling efforts into a bunker fuel for ships by removing the diesel that is still there. Gadgil Western, an India-based oil company, holds the Interline license for that plant.

Fredrickson said Interline envisions establishing recycling plants around the world and the $2.5 million loan from Sabbah is a beginning in that direction. The loan bears an interest rate of 9.25 percent and is secured by the stock of certain Interline subsidiaries. Interline also issued a warrant for Sabbah to purchase 250,000 shares of Interline common stock at $3.90 a share. The warrant expires Dec. 31, 1999.

The stock price closed Tuesday at $4 a share. But in the last four years it has ranged as low as 25 cents and as high as $9. Fredrickson said it has now settled to a more stable market. The symbol is IRC.EC on the American Stock Exchange.