WCI Steel files for Chapter 11, is seeking $110 million DIP

By Carlise Newman

Chicago, Sept. 16 - WCI Steel, Inc. filed for Chapter 11 bankruptcy protection in the United States Bankruptcy Court for the Northern District of Ohio and said it is seeking $110 million in debtor-in-possession credit facilities.

WCI said it aims to restructure its work systems and reduce its debt burden. A new capital structure is needed that reduces the burden associated with the company's long-term debt, the company added.

Discussions have been under way since July with bondholders to improve the debt structure. These discussions will continue within the Chapter 11 process, WCI said. The company has retained Jefferies and Co. as its financial advisor.

The company also plans to obtain a capital infusion. As part of its endorsement of the strategic plan, Renco Group, Inc., its ultimate parent, has indicated that it is receptive to making a substantial capital infusion, WCI said.

The proposed DIP would consist of $100 million of secured financing from Congress Financial Corp., Bank of America, NA and other lenders under its existing $100 million working capital facility and an additional $10 million subordinated secured DIP facility from Renco.

The facilities are expected to provide the liquidity necessary to enable WCI to meet its obligations to its suppliers, customers and employees during the restructuring process and to emerge from Chapter 11 reorganization proceedings with its desired competitive financial and operating structure.

WCI Steel is a Warren, Ohio based steelmaker.

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