Report says Kaiser may sell smelter
Company seeks extension on reorganization plan
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John Stucke
Staff writer
Kaiser Aluminum Corp. is seeking six more months to file a reorganization plan outlining how it would emerge from bankruptcy.
Extensions are common requests by companies working through the complexities of Chapter 11 bankruptcy, said company spokesman Scott Lamb.
If granted by the bankruptcy judge, the extension of what is called an "exclusivity period" would stretch through Dec. 12. Such periods are basically time frames that allow companies to file reorganization plans before outside parties such as creditors can file their own competing plans.
Kaiser CEO Jack Hockema called the extra time necessary and noted that the bankruptcy has not affected day-to-day operations.
If Kaiser cannot file its plan to reorganize by Dec. 12, it may seek additional extensions of the exclusivity period, Lamb said.
As Kaiser executives envision what the company will look like post-bankruptcy, speculation about asset sales persist.
A report in the trade publication American Metal Market cited unnamed sources and analysts as saying Kaiser may sell its Mead smelter and other properties to raise money -- a key ingredient to the company climbing out of bankruptcy.
Kaiser has listed liabilities of about $3.1 billion. That was before an administrative law judge of the National Labor Relations Board ruled that Kaiser owed members of the United Steelworkers of America some $180 million.
The ruling found Kaiser illegally locked out its 2,900-member union work force and owes them back pay for the period stretching from Jan. 14, 1999, to Sept. 20, 2000, said Dave Carlson, president of Steelworkers Local 338 representing Trentwood.
Kaiser said it intends to appeal the May ruling and has filed for a 90-day extension.
Fueling the asset divestiture speculation was the recent sale of its coating machine in the Trentwood rolling mill. Alcoa paid about $15.8 million for the large machine, used to put a special coating on metal for lids and tabs on aluminum cans.
Lamb said the company won't talk about asset sales, and cautioned against trying to interpret Kaiser's "no comment."
"It's just that. We won't comment on these issues," he said.
Kaiser idled its Mead and Tacoma smelters in December 2000 as it became more profitable to sell electricity than make aluminum.
As Kaiser's right to resell its allotment of electricity from the Bonneville Power Administration expired, a slumping economy made restart unprofitable.
Mead and Tacoma have remained closed and the Trentwood rolling mill has slowed production as big customers such as Boeing ease order volumes.
One analyst suggested that Glencore International AG, a Swiss-based aluminum company, may make an offer for Mead only to dismantle it and rebuild it in another country such as China or Vietnam.
Another analyst said Mead's equipment was simply too old to be a good purchase.
Last weekend, the Sunday Independent newspaper of London quoted officials with Russian Aluminum as saying they're interested in buying Kaiser's assets.
Lamb declined to respond to the reports. If such a deal was in the works, it would have to be disclosed to the bankruptcy court and the creditors committee. Any sale would have to be approved by the court.
"We have made no such filings," Lamb said.