Kaiser Aluminum files for Chapter 11

New York, Feb. 12 - Kaiser Aluminum Corp. said that it and its operating subsidiary Kaiser Aluminum & Chemical Corp. and some of its wholly owned subsidiaries made voluntary Chapter 11 filings in the United States Bankruptcy Court for the District of Delaware.

The Houston, Texas company said it faces "significant near-term debt maturities at a time of unusually weak aluminum industry business conditions, depressed prices, and a broad economic slowdown that was further exacerbated by the events of Sept. 11.

"In addition, the company has become increasingly burdened by asbestos litigation and growing legacy obligations for retiree medical and pension costs. The confluence of these factors has created the prospect of continued operating losses and negative cash flow, resulting in lower credit ratings and an inability to access the capital markets."

Kaiser Aluminum said it expected to enter into definitive documentation Tuesday for $300 million of debtor-in-possession financing from Bank of America.

The DIP facility along with the company's current invested cash should provide sufficient liquidity to meet operating needs, Kaiser said. The company anticipates production and shipment of bauxite, alumina, primary aluminum products and fabricated aluminum products will continue without interruption.

Excluded from the filing are: the 65% owned Alpart alumina refinery and the 49% owned Kaiser Jamaica Bauxite Co. in Jamaica; the 20% owned QAL alumina refinery in Australia; the 90% owned Valco aluminum smelter in Ghana; the 49% owned Anglesey aluminum smelter in Wales; and the 100% owned extrusion plant in Ontario, Canada.

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