Kaiser Aluminum will miss Feb. 1 coupon payment, may not pay notes due Feb. 15

New York, Jan. 30 - Kaiser Aluminum & Chemcial Corp. said it will not make the $25.5 million interest payment scheduled for Feb. 1 on its 12¾% senior subordinated notes due 2003.

The Houston based operating subsidiary of Kaiser Aluminum Corp. said it made the decision not to pay the coupon "in light of current and anticipated business and capital market conditions."

The company has $400 million of the 12¾% notes outstanding.

Kaiser Aluminum also said it is considering restructuring alternatives that could result in it failing to pay the principal and interest due Feb. 15 on its 9 7/8% senior notes due 2002 of which there are $174 million outstanding and the interest due April 15 on its 10 7/8% senior notes due 2006 with $225 million outstanding.

There is a 30-day grace period for the Feb. 1 payment before a default occurs but failure to pay the principal and interest due Feb. 15 would cause a default.

Kaiser also said it has hired Lazard as its financial advisor and Jones, Day as its legal advisor.

In addition, Kaiser said it has obtained a waiver and consent agreement on its credit facility so that it can continue to use the bank line.

"While we have not yet reached a definitive solution for our debt maturities, we have determined that it is in the company's best interest not to make this interest payment and to focus our financial resources on our operational priorities," said Jack A. Hockema, Kaiser's president and chief executive officer, in a press release.

He said the company has adequate liquidity to run its operations and is continuing to make and ship products.

At Jan. 29, 2002, Kaiser had $132 million of unrestricted invested cash.

Kaiser will also be deferring its release of fourth quarter earnings. No new date has been set.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.