Posted February 22, 2002 Manufacturing News Kaiser Aluminum Granted Partial Use of $300 Million DIP Financing Kaiser Aluminum Corporation (Houston; www.kaiseral.com) has received interim approval from the Bankruptcy Court to use up to $100 million of its $300 million in Debtor-in-Possession (DIP) financing, together with existing invested cash, to continue operations, pay employees, and purchase goods and services going forward during its voluntary Chapter 11 case. At today's hearing, the company received Court approval to, among other things, pay pre-petition and post-petition wages, salaries, and benefits to its employees, and to honor obligations to its customers. Interim approval of a portion of the total DIP commitment is common in Chapter 11 reorganization cases. A final hearing on the DIP facility is expected to occur in the next 30 days. The approval of only a portion of the facility is not an issue for Kaiser, as usage of the DIP facility in the near-term is expected to be limited to issuance of letters of credit. Immediate borrowings under the DIP facility are not anticipated as Kaiser has adequate invested cash for the foreseeable future at the petition date. Kaiser filed for voluntary petitions under Chapter 11 of the Federal Bankruptcy Code in the United States Bankruptcy Court for the District of Delaware. Kaiser had been facing significant near-term debt maturities at a time of weak aluminum industry conditions, depressed prices, and a broad economic slowdown exacerbated by September 11. In addition, the company became increasingly burdened by asbestos litigation and growing legacy obligations for retiree medical and pension costs. The confluence of these factors created the prospect of continued operating losses and negative cash flow, resulting in lower credit ratings and an inability to access the capital markets. The Manufacturing Report © Copyright 2002 by Lionheart Publishing, Inc. All rights reserved. E-mail Editorial Dept: tmr-editorial@lionhrtpub.com Lionheart Publishing, Inc. 2555 Cumberland Parkway, Suite 299, Atlanta, GA 30339 USA Phone: 770-431-0867 | Fax: 770-432-6969 E-mail: lpi@lionhrtpub.com