|
February 24, 2003
Monthly Update to Customers, Employees, Suppliers, and Friends of Kaiser Aluminum:
In Today’s Bankruptcy Court Hearing
The most notable item on the agenda at today’s Court hearing was approval of the sale of our interests in the Kaiser Center office complex for approximately $65 million in cash. The transaction is expected to close in March. The next regularly scheduled Court hearing is March 17, 2003.
Productive Committee Meetings
During the period February 5-7, and on February 14, members of company management had very productive meetings with the Unsecured Creditors’ Committee (UCC), the Asbestos Futures Representative, the UCC asbestos subcommittee and the chairs and advisors of the Asbestos Claimants’ Committee (ACC). The purpose of these meetings was to review business conditions and to discuss the status of the bankruptcy process. We continue to have good relationships with all of the committees and believe we are aligned in our desire to work through issues to achieve a consensus position regarding the plan of reorganization.
The Path Forward
As we have said previously, Kaiser’s advisors have developed a preliminary timeline that would enable the company to emerge from Chapter 11 in 2004. While we recognize that this timeline is subject to at least a few pacing items that may be beyond our direct control, our recent meetings with several stakeholders, including the UCC and ACC, confirm a mutual desire to see the company move expeditiously through Chapter 11. Between now and emergence, a number of key steps remain. Work has already started in some of these areas. Over the coming months, we will keep you informed as we move forward with these and other key tasks:
Analyzing and reconciling claims, Developing specific proposals to deal with legacy liabilities, Developing a formal plan of reorganization, and After soliciting input from stakeholders, obtaining approval from the Court on the plan of reorganization
Financial Position Remains Solid
Kaiser's cash and total liquidity have continued to be robust despite routine month-to-month fluctuations. What's more, the company still has no borrowings under its credit agreement. Clearly, cash proceeds from the sale of Kaiser Center will bolster our already healthy position.
Positive Signs in a Weak Economy
We’re encouraged to see continued strengthening in aluminum prices. LME cash prices have improved to about 64 cents, compared to approximately 59 cents last fall. Bookings for flat-rolled products are up significantly compared to this time last year, and bookings for engineered products have moved up modestly. On the other hand, the economy continues to exhibit weakness, and recent increases in energy prices have offset the gains of higher LME prices. So while the business environment is improving, it is still a challenging situation.
Customers Continue to be Supportive
With each passing month, we see additional evidence of customer support for Kaiser Aluminum. For example, we had two meetings with a large customer earlier this quarter – to review operating performance and the company’s progress in Chapter 11. We got positive feedback from these sessions and subsequently received additional orders – and that’s what really counts.
We Continue to Strengthen the Organization
We clearly need the efforts of all of our employees – veterans and newcomers – to continue the process of renewing the company. I am pleased that the company continues to be able to attract and hire exceptionally talented folks. To cite just a few examples, as some of you may know, we have recently filled a number of key positions:
Director of customer service for soft alloy distribution
(Marti Morgan) General manager for chemical-grade alumina
(Gary Bonham) Sales manager for aerospace products in Europe
(Phil Burgess) Regional sales manager for Engineered Products
(Michael Patterson) And a new director of compensation and benefits
(Lele Wentworth).
Thanks again to customers, employees, suppliers, and others for your ongoing support.
Jack A. Hockema
President and Chief Executive Officer
|
