Thursday, February 12, 2009

Aleris Files for Chapter 11

Busy day for bankruptcies. Aleris, which was in preparation to file bankruptcy, finally pulled the plug today. Can't be good for recent P/E purchaser Texas Pacific Group (or TPG, kinda like the whole Kentucky Fried Chicken and KFC situation), which, it seems, didn't feel like bailing out its December 2006 acquisition.

Apparently the company managed to get a $1,075 million DIP (at L+1000) from its existing bank group. Aladdin Capital's services again were not put to good use.

To fund its global operations during the restructuring, Aleris has secured $1.075 billion of debtor-in possession (DIP) financing. Subject to court approval, the DIP credit facilities include a new $500 million term loan and a $575 million revolving credit facility that replaces the Company's previous revolving credit facility. These will be used for the Company's normal operating and working capital requirements, including employee wages and benefits, supplier payments, and other operating expenses during the reorganization process. The Company believes that the DIP credit facility provides sufficient funds for its reorganization effort under Chapter 11.

Oh well, one more aluminum fabricator bites the dust. Good news for debt-free KALU.

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