American Ecology Starts $23.5-Million Site Fund

American Ecology Corp., an Agoura Hills waste-management concern, plans to set aside $23.5 million in reserves in the fourth quarter for future costs of cleaning up and closing waste-disposal sites.

The reserves, which amount to a third of American Ecology’s annual sales, will result in the company posting a loss for all of 1988, said spokeswoman Nicki Hobson. American Ecology earned $4.7 million on sales of $68 million in 1987.

A significant part of the reserves will be earmarked for cleaning up a leaking chemical-waste disposal plant that American Ecology operated in Sheffield, Ill., the company said. American Ecology based the amount of reserves in part on a recent independent report, prepared for the U.S. Environmental Protection Agency, that outlined the site’s problems, Hobson said.

Separately, Browning-Ferris Industries, a waste-management conglomerate in Houston, signed a definitive agreement to invest $28.5 million in American Ecology. In exchange, Browning-Ferris would get preferred stock, convertible bonds and warrants which, if converted to common stock, would give Browning-Ferris 51% of American Ecology.

The deal, originally proposed last October, is expected to be completed in mid-April.