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<br />Kaiser Steel Corp. filiiii~ii~ii!ii~~ii~ii
<br />for bankruptcy protection
<br />By DENNIS SEARLES
<br />Associated Press
<br />Colorado Springs-based
<br />Kaiser Steel Corp., a victim
<br />of the foundering U.S. steel
<br />industry, said yesterday it
<br />filed in Denver for protec-
<br />tion from creditors in U.S.
<br />Bankruptcy Court.
<br />Faced with a reported
<br />;620 million in debt and
<br />pressing creditors, the board
<br />of directors - elected after
<br />a proxy fight on Jan. 7 -
<br />filed for Chapter 11 reorga-
<br />tivation late Wednesday.
<br />Under Chapter 11 of the
<br />federal bankruptcy code, a
<br />rnmpany is given-a reprieve
<br />from creditors while it
<br />works out a way to pay its
<br />bills.
<br />Kaiser Steel makes steel
<br />pipe and components [or off-
<br />shore oil drilling platforms
<br />- another hard-hit sector of
<br />the American economy.
<br />It has not been amain-line
<br />U.S. steel producer since it
<br />shut down and sold its Fon-
<br />tana, Calif. steel mill several
<br />years ago.
<br />In addition to its steel-[ab-
<br />Kaiser Employees, companywide 1,oas
<br />Steed Co. - Employees in Colorado 50 ih Colorado Springs
<br /> Employees In California 350 In Fontana area
<br /><~ Employees in Utah and
<br /> New Mexlto mines 635
<br /> Finances Loss
<br />~`° a : Third quarter 1965 ~ ~ $1.26 mlllion
<br />:%
<br />~
<br /> Third quarter 1988 $9.7 mlllion
<br />;: Nine months 1985 -~- $31.2 mlllion
<br />~`~~ Nine months 1986 $32.6 mlllion
<br />Faciptie~ City Ststu~
<br />Steel fabricating facility Fontana, Calif. operating
<br />Pipe mill and fabricated-products shop Napa, Calif. not operating .
<br />Assembly yard (for offshore oil-rig
<br />steel) Vallejo, Calif. not operating
<br />Underground and surtace coal mines Raton Basin, N.M. operating
<br />Underground mine Uinteh Basin, Utah operating
<br />Coal reserves In Colorado Western Colorado not operating
<br />Real estate holdings Mostly near
<br /> Fontana
<br />ricatton business, Kaiser
<br />Steel is involved is coal pro-
<br />duction and real estate.
<br />It employs 1,045 people, including 50 at the Colorado
<br />Springs headquarters.
<br />Its main facilities are in the Fontana, Calif., area.
<br />Minneapolis investor Bruce E. Hendry, who took over as
<br />chairman after the proxy fight from former chairman
<br />Monty Rial, said the move was made because "creditor
<br />pressure was getting too great.... They were demanding
<br />immediate payment. This is a positive move and will stabi-
<br />lize the situation."
<br />"This is no great surprise;' said Rial of the Chapter 11
<br />tiling.
<br />Rial has accused Hendry of liqudiating troubled compa-
<br />nies at the expense of employees.
<br />He has been critical o[ Kaiser's recent decision to cut
<br />health benefits tar 6,000 retirees.
<br />
<br />aoexr rtwwrAiw trews
<br />Kaiser Steel reported a loss of;32.6 million for the nine
<br />months ended Sept. 30, 1986, compared with a loss o[;31.2
<br />million for the same period in 1985. -
<br />Faurth-quarter earnings have not been released.
<br />Subsidiary Kaiser Caal, put up for sale Jan. 29, reported
<br />;9.8 million in earnings for the first nine months of 1986.
<br />Kaiser Coal operates mines in Raton, N.M., Sunnyside,
<br />Utah, and has holdings in Colorado.
<br />In a Jan. 30 interview, Hendry said he would like to sell
<br />Kaiser's steel fabricating operation and develop an industri-
<br />al park and a hazardous waste treatment facility in Fontana.
<br />Kaiser Steel's Fontana blast furnace, built in 1942 by
<br />Henry J. Kaiser to provide steel [or his wartime shipbuilding
<br />efforts, was the centerpiece of the powerful Raiser mdustri-
<br />SwKAISER page 9a
<br />Penny-stock owner learns a lesson
<br />By JOE WEBER
<br />,I! Rxky Mountain Nawa SteH Writer
<br />Bob Schulman got a costly lesson in perry stocks this
<br />week.
<br />Schulman, a dabbler in pennies during the oil boom of the
<br />late 1970x, got word o[ a reverse stock split - in which
<br />iE several shares o[ stack become [ewer shares - in Merit
<br />I Energy. The company wants to take every block of 1.5
<br />~ tsraa million shares and shrink it to one share.
<br />SChtJaian once begged a broker to let him buy stock in
<br />buy more stock. Ina month, the stock popped to ;2.75 a
<br />share.
<br />Investors liked the company investors because its board
<br />boasted boW seasoned oil executives and Michael A. Wayne,
<br />son of movie star John Wayne.
<br />But the appeal didn't last. The stock slipped until July
<br />1984, when it stopped trading on the NASDAQ rnmputer
<br />system because no brokerage firms handled it
<br />Merit lost ;386,008 in fiscal 1984, ;371,687 in fiscal 1985
<br />and ;257,267 last year. By last April 30, the company's
<br />assets had shrunk to;928,982 from;3.7 mlllion In 1981.
<br />Last year a group of oilmen, organized as Mil-Ros Inc.,
<br />•....~ ....... Mn.:~ bnrinn aR 9aI n! fho of nrk Nnw fhav man/
<br />
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