Operations to continue uninterrupted; company will pursue previously announced restructuring within the bankruptcy process
WARREN, Ohio, Sept. 16 -- WCI Steel, Inc. today filed a voluntary petition for protection under Chapter 11 of the U.S. Bankruptcy Code in the United States Bankruptcy Court for the Northern District of Ohio, Eastern Division, in Youngstown.
Edward R. Caine, president and chief executive officer of WCI, said, "Although we very much had hoped to accomplish the restructuring of the company outside of bankruptcy, industry conditions and our cash position forced us to take this step in order to protect the future of the company. The restructuring will continue under court protection, and WCI will maintain normal operations during the process."
Caine continued, "We intend to fulfill our commitments to our employees, retirees and customers without interruption while we reorganize under court protection. We remain committed to providing our customers with high-quality products delivered on time and supported by superior customer and technical service. We deeply appreciate our customers' loyalty, and I assure them that meeting their needs remains our highest priority."
WCI also announced that it is seeking immediate bankruptcy court approval of $110 million in debtor-in-possession credit facilities consisting of a $100 million secured DIP financing from Congress Financial Corporation, Bank of America, N.A., and other lenders under its existing $100 million working capital facility (which includes a $15 million junior participation by The Renco Group, Inc., WCI's ultimate parent) and an additional $10 million subordinated secured DIP facility to be provided by Renco. These facilities are expected to provide the liquidity necessary to enable WCI to meet its obligations to its suppliers, customers and employees during the restructuring process and to emerge from Chapter 11 reorganization proceedings with its desired competitive financial and operating structure.
"Renco's commitments in the aforementioned DIP financings demonstrate its continued commitment to the long-term viability of WCI," said Caine.
WCI to continue turnaround strategy within Chapter 11 process
Caine said the company would continue to pursue the previously announced strategic restructuring plan within the Chapter 11 process. The key elements of the plan are:
? Restructuring the company's work systems. The new structure would create self-directed work teams that are expected to dramatically improve productivity through a reduction in employment levels and by providing more autonomy to the workforce. Plans for such work teams have been the subject of positive discussions between WCI and the United Steelworkers of America.
Caine said, "Our goal is to arrive at a consensual plan of reorganization and emerge as a newly capitalized, cost-competitive company positioned to operate profitably in a highly competitive marketplace."
WCI Steel is an integrated steelmaker producing more than 185 grades of custom and commodity flat-rolled steels at its Warren, Ohio facility. WCI products are used by steel service centers, convertors, electrical equipment manufacturers and the automotive and construction markets. The company has approximately 1,800 employees.
Forward-Looking Statements
Forward-looking statements in this press release are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. The words "expect," "anticipate," "intend," "believe," "foresee" and similar expressions are intended to identify such forward-looking statements; however, this press release also contains other forward-looking statements. WCI cautions that there are various important factors that could cause actual events to differ materially from those indicated in the forward-looking statements; accordingly, there can be no assurance that such indicated events will occur. Among such factors are: general economic and business conditions; demand for WCI's products; changes in industry capacity and levels of imports of steel or steel products; effectiveness of the remedies under Section 201 of the Trade Act of 1974; the ability to maintain sufficient liquidity during the restructuring process; the outcome of any on-going restructuring discussions or negotiations; the outcome of the Chapter 11 restructuring case; industry trends, including product pricing, competition; currency fluctuations; the loss of any significant customers; availability of qualified personnel; major equipment failures; changes in, or the failure or inability to comply with, government regulation, including, without limitation, environmental regulations; and the outcome of legal matters. By making these forward-looking statements, WCI does not undertake to update them in any manner except as may be required by the Securities and Exchange Commission under federal laws.
