The CEO promised its customers can expect uninterrupted service while the company reorganizes.
By CYNTHIA VINARSKY
VINDICATOR BUSINESS WRITER
YOUNGSTOWN -- With its Youngstown and Indianapolis plants now closed, Cold Metal Products has filed for Chapter 11 bankruptcy protection.
Raymond P. Torok, president and chief executive of the Sewickley, Pa.-based steel processing company, said the filing in federal bankruptcy court in Youngstown Friday doesn't mean Cold Metal is going out of business.
He said the company has a commitment for up to $48 million in post-petition financing from its lenders, enough to provide the liquidity it needs to fund its working-capital requirements.
"We intend to resolve this situation as soon as possible," Torok said. "We are working on a restructuring plan that allows Cold Metal to emerge as a strong, competitive and profitable company. Our unprofitable facilities have been closed."
Cold Metal's Chapter 11 filing lists assets of $65.4 million and debts of $96.5 million. The company's filing says it expects to have funds available to distribute to its unsecured creditors.
"I anticipate uninterrupted service for our customers and ongoing payment of post-bankruptcy obligations to employees and vendors," Torok said.
Cold Metal abruptly closed its Youngstown and Indianapolis plants Thursday, leaving 184 jobless. Officials said they notified employees that day and closed their doors immediately, saying the two plants weren't making money.
The Youngstown plant employed 116; the Indianapolis plant employed 68. Both were operating at low levels.
Cold Metal's remaining plants are in Ottawa, Ohio; Roseville, Mich.; Hamilton, Ontario; and Montreal, Quebec. Formerly based in Boardman, the company moved its headquarters to Sewickley, Pa. in 2000.
Torok said the bankruptcy covers the company's United States assets only and does not affect its plants in Canada.
Cold Metal, which processes steel for the automotive, construction and cutting tool industries and other markets, is one of a host of steel companies that have filed for Chapter 11 in the past several years.
Reasons for struggle
Officials have said that the company has struggled because of the sluggish economy. It has also been negatively affected by the Bush administration's foreign steel tariffs, they said, because it has increased the cost of steel the company buys.
Also, because its history dates back to 1928, officials said Cold Metal has high pension and retiree health-care benefit costs.
Cold Metal postponed filing its annual financial reports for fiscal 2002 last month, informing federal regulators that it was working with lenders and other funding sources to secure working capital.
A press release announcing that filing delay contained a warning statement that the outcome of the financial discussions could affect the management's opinion about the company's ability to continue operating "in its present form."
Two weeks later, the New York Stock Exchange halted trading on its stock, the company said, because it still hadn't filed the required financial statements.