WCI Steel Restructuring to Improve Competitiveness After $13.4 Million
Warren, OH— WCI Steel, Inc. reported a $13.4 million
loss in its second fiscal quarter and that the company was proceeding
with a restructuring of its cost and debt structures to adequately fund
operations and meet capital expenditure needs.
WCI indicated that any such restructuring would need
to feature a reduction in the aggregate principal amount outstanding of
its $300 million Senior Secured Notes, a revised labor agreement and a
significant cash infusion.
WCI has initiated discussions with certain holders of
the Senior Secured Notes and has also held initial meetings with the United
Steelworkers of America to discuss revising its existing labor agreement.
Furthermore, The Renco Group, Inc., WCI's ultimate parent, has indicated
that it is receptive to making the substantial cash infusion that would
be an integral part of any successful financial restructuring.
WCI also announced that it has retained Jefferies &
Company, Inc. to act as its financial advisor in connection with the restructuring
of its Senior Secured Notes.
Higher energy and raw material costs, the continuing
slowdown in the U.S. manufacturing economy and increased competition due
to the reopening of formerly idled steel capacity have caused product
pricing to deteriorate and sales volume to decline from peaks reached
in late 2002.