Exhibit 99.1
Contact:
Scott Lamb at (713) 267-3826
Richard Tauberman at 713-267-3630
Jamie Schwartz at 713-267-3630 February 12, 2002
KAISER ALUMINUM FILES VOLUNTARY PETITION UNDER CHAPTER 11
OF UNITED STATES BANKRUPTCY CODE
COMPANY FINALIZING $300 MILLION LOAN AGREEMENT TO FUND ONGOING OPERATIONS;
PRODUCTION, CUSTOMER SERVICE NOT IMPACTED BY FILING
HOUSTON, Texas, February 12, 2002 - Kaiser Aluminum Corporation
(NYSE:KLU) said today that the company and its operating subsidiary Kaiser
Aluminum & Chemical Corporation and certain of its wholly owned subsidiaries
have filed voluntary petitions under Chapter 11 of the Federal Bankruptcy Code
in the United States Bankruptcy Court for the District of Delaware.
In conjunction with the filing, the company expects to enter into
definitive documentation today for $300 million in Debtor-in-Possession (DIP)
financing from Bank of America, subject to court approval. The DIP financing, in
combination with the company's current invested cash, should provide sufficient
liquidity to meet its ongoing operating needs. Kaiser's production and shipment
of bauxite, alumina, primary aluminum products, and fabricated aluminum products
will continue without interruption.
Kaiser has been facing significant near-term debt maturities at a time
of unusually weak aluminum industry business conditions, depressed prices, and a
broad economic slowdown that was further exacerbated by the events of September
11. In addition, the company has become increasingly burdened by asbestos
litigation and growing legacy obligations for retiree medical and pension costs.
The confluence of these factors has created the prospect of continued operating
losses and negative cash flow, resulting in lower credit ratings and an
inability to access the capital markets. In October 2001, Jack A. Hockema, who
led the turnaround in Kaiser's fabricated products businesses, was named the
company's President and Chief Executive Officer.
"When I came on board as President and CEO, it became evident that
Kaiser needed to accelerate the process it was pursuing to establish a
sustainable financial and operational framework," said Hockema. "While we have
examined many alternatives including, but not limited to, asset sales and debt
restructuring, no alternative provided more than a partial or temporary fix.
Only a filing provided the time and tools necessary to adequately address these
issues.
"The decision to seek protection under Chapter 11 will provide Kaiser
with the opportunity to reorganize its financial structure and implement a
strategic plan to return to sustained profitability," said Hockema. "The
reorganization process will also allow the company to expand on and quicken the
pace of its operational improvements."
"Our core businesses are sound. Our fabricated operations have good
market positions, 'best-in-class' customer service rankings, and continue to
make progress in implementing 'lean sigma' methods. At the same time our
commodities businesses are aggressively pursuing performance improvement
initiatives," added Hockema.
For well over half a century, Kaiser Aluminum has produced a wide range
of products from 'upstream' bauxite, alumina and aluminum to 'downstream'
products for the aerospace, ground transportation, and industrial markets. The
company will continue to focus its energies on the quality products and superior
service for which it is known.
Hockema concluded, "Kaiser employees have been the key to our past
success, and their continued loyalty and commitment to the job at hand will
ensure that we meet the challenges we face. There will be hard work and tough
decisions ahead, but we have weathered difficult times before and will use the
reorganization process to implement the financial and operational initiatives
that will position us for long-term success."
Although the filing includes certain U.S. subsidiaries through which the
company holds an interest in foreign operations, it does not include the
operations of the following entities: the 65%-owned Alpart alumina refinery and
the 49%-owned Kaiser Jamaica Bauxite Company in Jamaica; the 20%-owned QAL
alumina refinery in Australia; the 90%-owned Valco aluminum smelter in Ghana;
the 49%-owned Anglesey aluminum smelter in Wales, or the 100%-owned extrusion
plant in Ontario, Canada. In this regard, and in conjunction with expected
approval of first-day court motions, Kaiser has taken appropriate steps designed
to ensure that its participation in each of these entities, including the
funding of certain costs and expenses, will not be impacted by the filings.
For additional information, see the newly established restructuring
section of the company's web site (WWW.KAISERAL.COM) or call the newly
established restructuring hotline at 1-888-829-3340 or 1-402-220-0856.
Kaiser Aluminum is a leading producer of alumina, primary aluminum and
fabricated aluminum products.
F-915
Company press releases may contain statements that constitute
"forward-looking statements" within the meaning of the Private Securities
Litigation Reform Act of 1995. The company cautions that any such
forward-looking statements are not guarantees of future performance and involve
significant risks and uncertainties, and that actual results may vary materially
from those expressed or implied in the forward-looking statements as a result of
various factors.
