A Message for Employees, Customers, and Suppliers of Kaiser Aluminum Operations in London, Ontario:

As many of you know, today Kaiser issued a press release announcing that nine additional wholly owned subsidiaries had filed Chapter 11 bankruptcy protection, including the subsidiaries holding Kaiser’s interest in the London plant. 

However, I want to emphasize that, from an operating perspective, today’s Chapter 11 filings are a non-event. Here’s why:

• The filings were not prompted by cash flow concerns, business conditions, or balance sheet issues at London (or at any of the other affected subsidiaries).

• The filings should have no impact on the day-to-day operation of London or on the rest of Kaiser, its employees, customers, and suppliers. In fact, Kaiser made an ancillary application to the Ontario Superior Court of Justice in Toronto as an extra measure of assurance that London will not be impacted by the U.S. filings.  

• We expect the U.S. Bankruptcy Court to approve our formal request to permit London to continue to make payments in the normal course of business (including payments of pre-petition amounts) to creditors and others for items such as materials and supplies, freight, taxes and, of course, salaries, wages, and benefits for employees.

• We also expect approval of our formal request for a continuation of routine intercompany transactions involving, for example, the transfer of materials and supplies among affiliated companies.

• The filings have no impact on the company’s Debtor-in-Possession credit agreement.   Financial liquidity remains strong and is further protected by the actions we took today.

The filings were made as a kind of insurance policy, to protect these subsidiaries against possible statutory liens that could arise from the Pension Benefit Guaranty Corporation if Kaiser does not make a $15 million contribution to the pension plan for U.S. salaried employees by January 15.

In summary, today’s filings represent a positive step; the protection of Kaiser’s assets and liquidity  has been enhanced without impacting our operations.   Moreover, today’s filings represent yet another step on the path toward the company’s restructuring and eventual emergence from Chapter 11.

If you have additional questions, please see today’s Kaiser press release or talk to your appropriate Kaiser contact – who in turn can help get answers for you. I appreciate your continued support.

Jack A. Hockema
President and Chief Executive Officer