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<br />.,-3, REGIONAL OIL ROUNDUP ,
<br />3;ENERGY NOTES ""-
<br />4jBUSINESS PEOPLE
<br />-~
<br />. st>nafl<y; OctAbex~;19, 1986/Section G
<br />BUSINESS
<br />
<br />~t~~. ed K
<br />p~
<br />.;
<br />Hy Peter G. Chronis
<br />. aenver Past aus~ness W,iter
<br />",Nobody disputes that Kaiser
<br />• Steel Corp. is m trouble - big trou-
<br />tile.
<br />'Kaiser is trying to stand tall in a
<br />severely depressed steel and coal
<br />market with an elephant•sized toad
<br />• of debt, 51]5 million, strapped to its
<br />back. Just ahead on its road to sur•
<br />vfval is some 567 million in annual
<br />payment obllgat/ons, and along the
<br />. way the company is being drained
<br />by gargantuan pension payments
<br />to former steelworkers. Cash Row
<br />Is limited, and insufficient to meet
<br />~.___ -, -
<br />-. `' ~~~ ~` ` ; ,;~ ~, •' `WILLIAM DONOGIiUE, 5-
<br />- INSIDER TRADING, ~;,,,
<br />BUSINESS CALENDAR, S ° `:
<br />. rniE DF.NY~R POST ~ ~ '
<br />
<br />obllgalions.' -
<br />And now, Minneapolis investor
<br />Bruce Hendry is speazheading a
<br />drive to have prnferred sharehold-
<br />ers overthrow a majority of Kai-
<br />ser's board at a special meeting in
<br />Denver Oct. 311. '
<br />How Kaiser Steel -what's Lett
<br />of steel baron Henry J. Kaiser's
<br />empire -came to be itt such a sor•
<br />ry state Is a complicated tale witA
<br />many twists.
<br />Central to Katser's tale is Monty
<br />Rial, 44, chairman and chief execu-
<br />tive officer, and also head of the
<br />Colorado ~ 3prings-based Pertrta
<br />
<br />facing stockholder coup
<br />Group that bought into Fontana,
<br />CaIH: based Kaiser. He joined the
<br />Tulsa-based Prates Croup when 11
<br />snatched the .ailing West Coast
<br />steel company from the jaws of
<br />takeover artist [twin - "the Liqui-
<br />dator" -Jacobs in a highly lever-
<br />aged, 538a.m111ian buyout in 19fW.
<br />Critics dismiss Rial, who had
<br />dabbled 1n oll, gas and coal in 0[Ua-
<br />homa and Calorado, as an upstart
<br />who insinuated himself as a 5450
<br />partner with Joseph Prates' buyout
<br />group. Within a little over a year
<br />after the Prates Group had bought
<br />XaLser, lttal's Pernla Group exec.
<br />cfsed its rights to buyout Prates' unable to make required payments dentures. '
<br />bait for 540 million cash in April into a fund for redeeming one lass That meticulousness has reaped = ~
<br />]985. A Prates associate said that of preferred shares, and badly him a fortune in the collapses of ~~~
<br />Prates had intended Kaiser to be a squeezed by the sharp decline of compatdes like the Erie Lacks= ~~ i
<br />long-term investment and was sur- the energy business. wanna Railway and Wickes Cos: ~ ~
<br />prised when Rial ezerctsed the And Rial has come under fire for
<br />~ Assembling highly discounted ~ ~~
<br />~
<br />buyout option. 'deals between Perms Croup atfili- bonds at cents-ondollar prices and~~
<br />Since that time, Kaiser Steel - gates and Kaiser Steel that have then enforcing the fine-print provi-
<br />now essentially a coal company been lucrative for him and his pri- sions has been Hendry's forte. ~~
<br />with 1.3 billion tons of coal re- vale companies. Giant firms have learned to their '~'• ~
<br />serves in Colorado, New Mexico More critical, however, may be .dismay that obscure promises ~=~
<br />and Utah -finds itself in default the tact that Kaiser has drawn the made to Investors a century ago
<br />on a bank loan used to buy Prates' ~ attention of Hendry, an investor can haunt [hem grievously after
<br />Interests; in default on dividend who became a millionau•e by read- Hendry, a widely respected mein- ;
<br />payments to preferred sharnhold- ing the tine print itt obscure [inan-
<br />ers; in arrears on trade accounts; vial documents, such as bond ur- Please see KAISER on 2-G ~ ,
<br />Ideal _ ac ui.~i~ti_o~~~o~f~~s fk~..
<br />cement iant ma'or
<br />~W1SS ~
<br />. g~ .
<br />hold on r~iarket~ in U. S. -
<br />~ 8y Eckard Paui Imhof Today Holderbank Group
<br />and Gail L. Pitts controLv more than 30 cement
<br />I Demer Peel a~ciee'..B Wnten HO~[~CI'7)1G1[t~C'S f!(:((IlItS7tl0[I companies across the world, and
<br />_:,,:c„ eAo piapt Sw155 ..r i,r 1 had 19135 combined assets of 53.7
<br />or "' . . - , w. ..:.aoa navrlpl'c~111D blllion. uu from 52.6 billion at the
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<br />~ ~' .' ,'~ ~HOLDERBA
<br />f IHANCIERE GLARIS ~ LTD.
<br />t,~arrs, ~ parent corporation
<br />involved primarity in production of cement and
<br />~entiaiated produtisand operations.: , ,
<br />1985 rererttiea: Approzrmately $2 billion.
<br />.The HoWerbartk Group a companies operates in .
<br />2f countries. These countries accounted for just
<br />tinder onequarter of 1985 worldwide cerrien!
<br />oaisttmption estimated at 9ti0 metric tons.. °°
<br />North American Oompanies' 1985 salty vdume
<br />alone jumped 14.4 percent compared to an were'
<br />4.5 percent growth by group and Holderbaztk
<br />15Rafg~ y;~~~~r.~~
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