Kaiser to sell assets for cash flow
Company doesn't disclose which properties will be sold
John Stucke - Staff writer
Kaiser Aluminum Corp. officials told shareholders Wednesday it will ease inventory levels and sell assets to boost the company's cash flow.
The company remained mum about which properties will be sold. The company owns properties worldwide, including the Trentwood rolling mill and idled smelters in Mead and Tacoma.
An announcement is expected next month.
The emphasis on cash flow is part of a companywide performance initiative to give the highly leveraged firm some financial flexibility, president and CEO Raymond Milchovich said. Shareholders added chairman to his list of titles during annual meetings in Houston of Kaiser and its parent, Maxxam Corp.
The plan aims to increase cash flow to between $225 million and $235million per year by 2003. Last year the company's cash flow was about $135 million.
The biggest improvements will be expected from Kaiser's majority-owned Valco aluminum smelter in the African country of Ghana, and its Alpart alumina refinery in Jamaica.
Other efficiencies will be found at the company's Gramercy, La., alumina refinery, and a reduction in overhead expenses using consolidation at its Houston headquarters.
Both Kaiser and Maxxam are troubled with poor stock performance, expensive legal battles and the prospect of much higher electricity prices for Kaiser's smelters in Washington state. Maxxam owns about 63 percent of Kaiser stock, and it depends on the aluminum maker to provide about 88 percent of its revenues.
Maxxam's clearcutting of California redwoods has angered environmental groups. And it's pitted against the United Steelworkers of America, who accuse Maxxam CEO and Chairman Charles Hurwitz of gutting Kaiser's historical holdings, wiping out union jobs and running a company steeped in debt. Moody's bond rating service last year downgraded Kaiser bonds because of its $924 million debt.
Hurwitz has brushed aside such criticisms, and his closely held Maxxam rejected several proposals backed by a group called Concerned Maxxam Shareholders.
The dissident shareholders tried unsuccessfully to change voting procedures, declassify the board of directors and and require a majority of directors on the board to consist of people meeting a rigid definition of "independent."
Both sides claimed some sort of victory.
Steelworkers spokesman John Youngdahl said in a telephone interview Wednesday that a majority of shares not held by Maxxam supported the resolutions.
The votes, he said, show there is still serious discontent among shareholders about how the company is being run.
The company points out that the measure failed as 90 percent of share votes were cast against.
Speakers at the meeting who were critical of Hurwitz were Julia Butterfly Hill, Rabbi Les Scharnberg and John Goodman, a Trentwood Steelworker and president of the Alliance for Sustainable Jobs and the Environment.
They asked when the company will open itself up to the concerns being expressed by shareholders.
Goodman said they didn't receive a clear answer.