Exhibit 99.1
For Information: Scott Lamb
Telephone: (713) 332-4751 January 14, 2003
ADDITIONAL SUBSIDIARIES OF KAISER ALUMINUM FILE FOR
U. S. CHAPTER 11 PROTECTION;
NO IMPACT EXPECTED ON DAY-TO-DAY OPERATIONS OR CREDIT
AVAILABILITY
HOUSTON, Texas, January 14, 2003 - In a move that is expected to have
no impact on day-to-day operations, nine additional wholly owned subsidiaries of
Kaiser Aluminum & Chemical Corporation today filed voluntary petitions with the
U.S. Bankruptcy Court for the District of Delaware under Chapter 11 of the
Federal Bankruptcy Code.
"From an operating perspective, the filings are a non-event, said Jack
A. Hockema, President and Chief Executive Officer of Kaiser Aluminum. "Financial
liquidity remains strong and is further protected by the actions taken today."
The voluntary filings were initiated to, among other things, protect
the assets held by these subsidiaries against possible statutory liens that may
arise from the Pension Benefit Guaranty Corporation (PBGC) if Kaiser does not
make a $15 million contribution to its salaried pension plan by January 15. (The
company had previously disclosed that it did not intend to seek Bankruptcy Court
approval to make that payment.) Such possible statutory liens would, among other
things, violate the provisions of Kaiser's Debtor-in-Possession (DIP) credit
agreement.
The filings include the U.S. legal entities through which Kaiser owns
interests in its Jamaican operations; however, the legal entities that own the
operating facilities themselves -- the Alpart alumina refinery and the KJBC
bauxite mining operation in Jamaica -- are not included in the filings and thus
are not subject to any bankruptcy-related impacts. The filings also include the
legal entities through which Kaiser owns its interest in an aluminum extrusion
plant in London, Ontario, but Kaiser expects court approvals (through the U.S.
Court and through an ancillary application to the Ontario Superior Court of
Justice in Toronto, Canada of measures that will eliminate any impact on
operations at that facility.
Hockema said, "We want to be absolutely certain that customers,
employees, and suppliers understand that these filings will have no impact on
the day-to-day operations of Alpart, KJBC, and London. In particular, the
filings were not prompted by cash flow concerns, business conditions, or balance
sheet issues at any of the affected subsidiaries. We expect the Bankruptcy Court
to approve our request to permit the filed entities 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."
Kaiser expects approval of such payments primarily because the amounts
are not material and are essential to ongoing operations. The company also
expects approval of a continuation of routine intercompany transactions
involving, for example, the transfer of materials and supplies among affiliates.
"In short, the filings simply represent yet another step on the path
toward the company's restructuring and eventual emergence from Chapter 11," said
Hockema.
The company also has received a waiver from the DIP lenders to assure
that the availability under the DIP credit agreement will not be affected by the
failure to make the pension payment, the additional Chapter 11 filings, or the
imposition of any statutory PBGC liens. In addition, the company and its DIP
lenders expect to seek approval of a further amendment to the DIP credit
agreement to formally incorporate the waiver provisions.
The filings include the following subsidiaries, all of which are U.S.
entities, except where noted. Several of the subsidiaries are special-purpose or
dormant entities.
Alpart Jamaica Inc. (not the Alpart alumina refinery)
KAE Trading, Inc.
Kaiser Aluminum & Chemical Canada Investment Limited (Canada)
Kaiser Aluminum & Chemical of Canada Limited (Canada)
Kaiser Bauxite Company (not the KJBC bauxite mining operation)
Kaiser Center Properties
Kaiser Export Company
Kaiser Jamaica Corporation
Texada Mines Ltd. (Canada)
At the time of its original Chapter 11 filings in 2002, it did not
appear to be necessary to include these nine subsidiaries in the bankruptcy
proceedings. However, in light of the accelerated funding requirement for the
salaried retirement plan -- and in light of the steps taken to ensure that the
filings have no impact on operations -- it was determined that today's filings
constituted an appropriate and prudent protective measure.
Certain other majority-owned subsidiaries, such as the legal entity
that owns the Valco aluminum smelter, have not been included in the filings to
date for a variety of legal, technical, or jurisdictional reasons. Instead, and
where pertinent, measures intended to provide similar protection are being
pursued.
Kaiser and 16 of its subsidiaries originally filed Chapter 11 petitions
in February and March of 2002. In connection with those cases, Kaiser had
previously obtained U.S. Bankruptcy Court approval to set January 31, 2003 as a
general claims bar date. In respect of the subsidiaries included in today's
Chapter 11 filings, the company anticipates that the debtors will ask the Court
to set a separate (and later) claims bar date.
Kaiser Aluminum & Chemical Corporation, the operating subsidiary of
Kaiser Aluminum Corporation (OTCBB:KLUCQ), is a leading producer of alumina,
primary aluminum and fabricated aluminum products.
F-945
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.
