WARREN WCI Steel misses interest payment

The steelmaker had a 30-day grace period to come up with the cash.
By CYNTHIA VINARSKY
VINDICATOR BUSINESS WRITER
WARREN -- WCI Steel missed the deadline to pay a $15 million interest payment Tuesday, but officials say they're making progress on a restructuring plan aimed at keeping the company out of bankruptcy court.
The loan payment was originally due June 1, but the steelmaker had a 30-day grace period that expired late Tuesday.
Tim Roberts, a WCI spokesman, said the financially troubled steelmaker was unable to find the cash. WCI, the Mahoning Valley's third-largest industrial employer, has 1,800 employees and has lost more than $155 million over the past 21/2 years.
WCI pays $30 million in interest yearly on its long-term note secured debt of $300 million, money borrowed to make improvements to the mill's continuous caster and ladle metallurgy complex in the early 1990s.
"Obviously the bond holders are aware of our restructuring plan, and we are scheduling discussions with them to begin the process of restructuring our debts," Roberts said.
"It is the company's intention to restructure outside of bankruptcy court," he added.
As part of its restructuring, the company said, it has developed a strategic plan for producing and marketing its products more effectively, although he did not release details.
Officials have been meeting with WCI's bank lenders, and the banks are continuing daily funding of its operations from its $100 million revolving-credit fund.
Financial situation
Roberts said WCI reported liquidity of $52.5 million when it filed its last quarterly report in May, but he did not say how much cash the company has on hand now. Liquidity is the ease with which assets can be converted to cash without loss in value. WCI's third quarter ends July 31, but its report on the quarter probably won't be released until several weeks after that date.
Roberts said the company has established a process to evaluate the concept of using self-directed work teams in the steel production process, an idea it is discussing with the United Steelworkers of America, which represents WCI's 1,400 hourly employees.
He said the company has discussed "a wide array of issues" with leaders of USW Local 1375 and is waiting for the officials at the union headquarters in Pittsburgh to complete their study of the issues so that talks with them can begin.
The Renco Group, WCI's parent company, has already stated it is "prepared to provide a substantial capital infusion that will allow for targeting investments" in the company, Roberts said. He could not say how much the parent is willing to contribute to bail out WCI.