Friday, January 23, 2004
The steelmaker wants a judge to approve another loan to keep it operating.
THE VINDICATOR
By CYNTHIA VINARSKY
VINDICATOR BUSINESS WRITER
WARREN -- The month of December brought more financial losses for WCI Steel, but the deficit was substantially less than the previous two months as the steelmaker works to reorganize and emerge from bankruptcy protection.
The company lost $2.38 million in December on sales of $38.4 million, compared with losses of $8 million in November and $8.6 million between Sept. 16, the date of the filing, and Oct. 31.
WCI has lost $19 million on sales of $138.5 million since it filed for Chapter 11 bankruptcy protection in September, according to reports filed with the U.S. Bankruptcy Court in Youngstown.
Operating costs for steel production continue to exceed WCI's sale proceeds for the product -- the company's operating losses last month totaled $1.77 million.
Fees for attorneys and other professionals related to the bankruptcy added $619,000 to the deficit. Professional fees have cost the company more than $2 million since the bankruptcy filing.
Seeking loan approval
WCI is asking Judge Marilyn Shea-Stonum of Akron to approve a loan package from WCI's parent company, Renco Group of New York, to fund its continued operations.
The judge is handling the WCI case until a replacement for former Youngstown bankruptcy Judge William Bodoh is appointed, so the hearing on the motion is set for 10:30 a.m. Feb. 3 in bankruptcy court in Akron. Judge Bodoh retired from the bench Jan. 2.
If approved, the Renco financing would supplement a $100 million loan package the court has already approved from a group of lenders led by Congress Financial Corp. and Bank of America.
Known as debtor in possession or DIP financing, the loans are designed to give a struggling company operating capital while it works its way through the bankruptcy process. Lenders are willing to offer DIP financing because, under bankruptcy law, the debtor must repay the loans before it pays back other creditors.
vinarsky@vindy.com