Aleris International Inc., a global leader in aluminum rolled products, extrusions and recycling, announced February 12 that it and its U.S. subsidiaries have filed voluntary petitions for reorganization under Chapter 11 of the U.S. Bankruptcy Code as a result of financial constraints related to deteriorating demand, earnings, and liquidity caused by the steep decline in global economic conditions. The filing was made today in the U.S. Bankruptcy Court in Delaware.
European, Asian, South American, Mexican and Canadian operations of Aleris are specifically excluded from the filing. Aleris facilities across the globe will remain open and continue normal operations.
Around the globe, Aleris has been severely affected by an unprecedented combination of event in recent months, driven by the global economic situation. "We have moved aggressively to reduce our costs and eliminate capacity to offset the negative effects of the global economic slowdown. However, given the unpredictability of the speed and severity of the downturn over the last few months, these actions were not sufficient to counter the combination of challenges Aleris faces, including a sharp deterioration in demand for our products by the automotive, housing, and general industrial products sectors and an unprecedented decline in aluminum prices which limited our borrowing ability," said Steven J. Demetriou, Aleris chairman and CEO. "After careful deliberation with our advisors, the Company's Board of Directors concluded that seeking the protection of Chapter 11 for our U.S. operations is the only meaningful option to preserve value for all of our constituents. This should allow us the time to work through the current dislocations and the opportunity to pursue a financial and operational restructuring that creates a more competitive foundation for the long term."
"The European business development is equally challenging as in the U.S., but we have sufficient cash reserves," said Roeland Baan, president of Aleris Europe. "Our customers can continue to have confidence that they will receive their orders on time and as specified. Our suppliers can expect payment as has been usual practice for all goods and services provided. Also, our employees will be fully paid and on the normal schedule. The filing will have no impact on our European employees."
To fund its U.S. operations during the restructuring, Aleris has secured commitments for a US$ 1.075 billion debtor-in possession (DIP) financing, subject to court approval. The DIP credit facility will be used for the company's normal operating and working capital requirements and other operating expenses during the reorganization process. As part of this agreement, a new financing facility of up to US$ 180 million will be made available specifically for Aleris Europe.
About Aleris International
Aleris International is a global leader in aluminum rolled products and extrusions, aluminum recycling and specification alloy production. Headquartered in Beachwood, Ohio, the company operates production facilities in North America, Europe, South America and Asia, and employs approximately 8,400 employees. In December 2004, Aleris was created as a result of the merger of Commonwealth Industries Inc. and IMCO Recycling Inc. In 2006, Aleris further expanded its operations with the acquisition of Corus Group's downstream aluminum operations.