Slater Steel Inc., a mini-mill producer of specialty steels, says it has made significant progress towards developing a business plan for the restructuring or going-concern sale of its Hamilton Specialty Bar, Atlas Stainless Steels, Sorel Forge, and, possibly, Slater Lemont divisions.
The company said that its ability to implement the business plan will be contingent on a number of factors, including achieving significant labor savings at Hamilton Specialty Bar and Atlas Stainless Steels by October 31, 2003, the reduction of other targeted expenses, and finalization of arrangements with potential investors and/or buyers.
The business plan does not presently include Slater's operations at Fort Wayne Specialty Alloys or Atlas Specialty Steels, which comprise the Company's stainless steel bar business. The investigation by RBC Capital Markets, the Company's financial advisor, of strategic alternatives available to Slater has not, to date, identified purchasers or investors that would enable the continued operation of this business on terms economic to Slater.
As Slater does not have sufficient liquidity to support the losses that its stainless bar operations continue to experience, it is expected that Slater Steels Corp., a Slater U.S. subsidiary, will seek U.S. Bankruptcy Court approval to idle the entire Fort Wayne Specialty Alloys' facility in Fort Wayne, IN, by no later than the first quarter of 2004. The idling of this facility, which, in addition to U.S. Bankruptcy Court approval, is subject to discussions with its unions, will impact approximately 370 hourly and salaried positions.
The company previously announced that it would downsize its stainless steel bar business and that several operations at Fort Wayne would be temporarily shutdown by year-end. In addition, the entire Atlas Specialty Steels facility in Welland, ON, is in the process of being temporarily idled, affecting approximately 630 hourly and salaried positions.
While it has not received acceptable purchase proposals, the company continues to have discussions with certain parties. To facilitate an orderly start-up of the stainless steel bar assets should they eventually be sold, the equipment and infrastructure will be protected to facilitate the option of renewed operations in the future.
Slater confirmed that it is committed to working with customers of Fort Wayne Specialty Alloys to fulfill orders on its books.
The company also announced that it has insufficient liquidity to fund working capital at Slater Lemont. Consequently, 48 of the 65 employees at the facility will be laid off as of October 10, 2003. The Company also said that it expected that Slater Lemont Corporation would seek U.S. Bankruptcy Court approval to idle its facility, pending a possible sale of such assets or its inclusion in Slater's business plan.