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November 17, 2003
Monthly Update to Customers, Employees, Suppliers, and Friends of Kaiser Aluminum:
In Today’s Court Hearing
The Court:
- Considered our request to sell three surplus parcels of land near the currently curtailed smelter at Mead, Washington. The sale of one parcel for $1.37 million was approved directly, and we expect to complete a competitive bidding process within the next several weeks on the other two parcels, which will be sold together. We plan to ask the Court for approval of the winning bid at the next regularly scheduled hearing on December 15. (Also at the December hearing, we expect the Court to consider our recently filed request to sell/seek bids on an additional three surplus parcels of land near Mead. We expect to close all of these transactions by early 2004. None of these sales affects the Mead smelter itself.)
Prior to Today’s Hearing, the Court also Approved the Following Motions
- A settlement with the Port of Tacoma to exit a lease and an operating agreement related to alumina storage and transport facilities. As I had said in my October letter, the settlement will eliminate roughly $1 million per year in ongoing costs.
- A request by the Committee of Retired Salaried Employees to retain legal counsel.
- A motion that authorizes Kaiser to reimburse certain expenses of prospective purchasers in connection with the possible sale of commodity assets.
Update on Commodity Asset Sale Process
As many of you know, November 7 was the deadline for bids in connection with the possible sale of our interests in Anglesey, Alpart, and Gramercy/KJBC. With our advisors, we are currently reviewing the proposals that were submitted. As I have described previously, detailed review of the proposals is likely to be a lengthy process, and any definitive agreements on asset sales are ultimately subject to approvals from Kaiser’s Board of Directors and from constituent groups, including our DIP lenders and the Unsecured Creditors’ Committee. In the meantime, it’s business as usual at these facilities.
Company Confirms Target Date for Emergence: Mid-2004
As we further refine the preliminary timeline developed by our advisors, it has become increasingly clear that we are on a path that could position us to emerge by mid-2004. We still have much work to do and, while we all recognize that there are no guarantees in this complex process, we and our advisors think this timeline is achievable.
Article Highlights Transformation of Trentwood
The company’s aluminum rolling mill in Trentwood, Washington, was the subject of a feature story in the October 30 edition of the Spokane Business Journal. Titled, “Trentwood Lean, Refocused,” the article included favorable customer comments and described the way in which the plant has successfully reoriented itself as one of the world’s premiere suppliers of heat treat sheet and plate. If you would like a copy of the article, please send your request to Terri.Sebek@kaiseral.com.
Liquidity Update
The company’s liquidity has continued to be approximately $200 million.
Jack A. Hockema
President and Chief Executive Officer
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