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December 19, 2002 Monthly Update to Customers, Employees, Suppliers, and Friends of Kaiser Aluminum: In today’s Bankruptcy Court Hearing . . . We obtained approval on two noteworthy items:
On a related matter . . . on December 12, we filed a motion with the Bankruptcy Court to extend the period of exclusivity. By filing such a motion, we automatically obtained an extension of this deadline until the next regularly scheduled Court hearing on January 27, 2003. On that date, we then expect the Bankruptcy Court to grant our formal request to extend the period of exclusivity until April 30, 2003. Also at the January 27 hearing, we expect Court approval of the sale of the Tacoma, Washington aluminum smelter to the Port of Tacoma for initial net cash proceeds of $12 million and up to an additional $4 million in the future. We expect the sale of this non-core asset to close in the first quarter of 2003. We elected to seek a buyer for this 60-year old facility because we determined that Tacoma was unable to compete with the much larger, newer, and more efficient smelters that dominate the primary aluminum industry today. Update on Pension Matters Many of you may know the company issued a press release and an employee letter on December 18 concerning potential limits on the payment of lump-sum distributions from the Salaried Employee Retirement Plan. Although this issue could potentially create a technical default under our credit facility, we are working with our lenders to resolve any technical default that may arise. I want to emphasize that as we deal with these and other bankruptcy-related issues, we are working very hard to keep our eyes on the ultimate objectives. Again, those objectives are to emerge from Chapter 11 and remain viable long into the future. And as I have said before, we recognize that the company needs to provide suitable compensation and benefits to retain and motivate our employees to help us accomplish these objectives. Financial Position As of October 31, 2002, the company's cash and cash equivalents amounted to $74.1 million, there were no outstanding borrowings under the credit agreement, and outstanding letters of credit were approximately $40.7 million. Liquidity remains robust at approximately $250 million. Kaiser Maintains Strong Market Presence Despite tough business conditions, we continue to have success in maintaining significant market presence. Here are just a few examples.
As 2002 draws to a close, I’d like to recap our achievements. We have made good progress in the bankruptcy process and, despite adverse business conditions, we have maintained substantial liquidity. We have introduced new products, improved our cost performance, invested capital in growth and efficiency projects, and gained additional business. I thank the employees, customers, suppliers, and others who have figured so prominently in our continuing journey. We look forward to an equally busy and productive 2003. Best wishes for the holiday season. Jack A. Hockema Monthly Operating Reports: Update Archive:
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