Kaiser Aluminum liquidating commodity subsidiaries' plans confirmed

By Caroline Salls

Pittsburgh, Dec. 20 - Kaiser Aluminum Corp. said plans of liquidation for four of its commodity subsidiaries were confirmed on Tuesday by the U.S. Bankruptcy Court for the District of Delaware.

The four subsidiaries are Alpart Jamaica Inc., Kaiser Jamaica Inc., Kaiser Alumina Australia Corp. and Kaiser Finance Corp.

According to a company news release, the confirmation orders allow the four liquidating commodity subsidiaries to make partial distributions to some creditors, while reserving sufficient amounts for future distributions until the court can resolve outstanding disputes among the units' creditors.

The court ruling does not resolve a dispute between the holders of Kaiser's senior notes and the holders of its senior subordinated notes regarding their entitlement to some of the proceeds from the liquidating subsidiaries' sale of interests.

However, as a result of the confirmation, Kaiser will pay all restricted cash and other assets held on behalf of the four subsidiaries to a trustee, who will then be authorized to make partial distributions after setting aside about $213 million in reserves subject to the noteholders' dispute and for the payment of about $40 million in administrative and priority claims and trust expenses.

After the reserves are set aside, the partial distribution is expected to total about $430 million, of which about $196 million will be paid to the Pension Benefit Guaranty Corp. and $202 million will be paid to the indenture trustees for the senior notes for distribution to senior noteholders.

Of the remaining partial distribution, about $21 million will be paid to Kaiser Aluminum & Chemical Corp., the company's principal operating subsidiary, and $11 million will be paid to the Pension Benefit Guaranty on behalf of that subsidiary.

The company also said it believes that it will probably have to pay $8.5 million of Alternative Minimum Tax for 2005 as a result of the 2005 gain on sale of its interest in the Australian alumina refinery.

However, if the liquidating plans are implemented during 2005, some tax attributes would likely be available to reduce the $8.5 million payment by about $4 million.

According to the release, the confirmations further Kaiser's overall restructuring effort, which focuses the company's future primarily on its fabricated products business.

Kaiser, a Houston-based aluminum company, filed for bankruptcy on Feb. 12, 2002. Its Chapter 11 case number is 02-10429.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.