Kaiser Aluminum Says It Does Not Intend to Make Scheduled Interest Payment, Names Advisors, and Defers Release of Fourth-Quarter Financial Results
HOUSTON--(BUSINESS WIRE)--Jan. 30, 2002--Kaiser Aluminum & Chemical Corporation, the operating subsidiary of Kaiser Aluminum Corporation (NYSE:KLU - news), today said it does not intend to make the $25.5 million interest payment on its 12-3/4% Senior Subordinated Notes due 2003 ($400 million outstanding) scheduled for Feb. 1, 2002, in light of current and anticipated business and capital market conditions.
The company also is considering restructuring alternatives that could result in the non-payment of principal and interest due Feb. 15 on the 9-7/8% Senior Notes due 2002 (approximately $174 million outstanding) and interest due April 15 on the 10-7/8% Senior Notes due 2006 ($225 million outstanding).
Although non-payment of interest on Feb. 1 will not cause a default until the expiration of a 30-day grace period, a default would occur if the company were to miss the Feb. 15 principal and interest payment on its 9-7/8% Senior Notes.
In connection with a potential restructuring, Kaiser has retained Lazard as its financial advisor and Jones, Day as its legal advisor. The company also has obtained a waiver and consent agreement with respect to its existing Credit Agreement such that the company will continue to have the ability to utilize the Credit Agreement as so modified.
``While we have not yet reached a definitive solution for our debt maturities, we have determined that it is in the company's best interest not to make this interest payment and to focus our financial resources on our operational priorities,'' said Jack A. Hockema, Kaiser's president and chief executive officer. ``I want to emphasize that we are making and shipping products with the same high standards of quality and service that customers expect from us -- and that we have adequate liquidity to run our operations.'' As of Jan. 29, 2002, the company had unrestricted invested cash of approximately $132 million.
The company also indicated that it has deferred the release of its fourth-quarter 2001 financial results and the associated conference call. No new date has been set. The release and conference call previously had been set for Jan. 31.
Kaiser Aluminum Corporation is a leading producer of alumina, primary aluminum and fabricated aluminum products.