Hussey Copper files for bankruptcy protection
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Hussey Copper of Leetsdale has filed for bankruptcy and has a letter of intent with a potential buyer.
The action comes after the 163-year-old copper producer defaulted on a loan agreement with PNC Bank and other lenders and failed to find other backers to refinance its debt.
Hussey owes the bank group $38.2 million and owes another $2.4 million for financing provided by Schneider Electric. It listed another $29 million in trade debt, including $9.1 million to Sims Metal Management in Elizabeth and $2.6 million to HKP Metals in McKeesport.
In papers filed Tuesday in federal bankruptcy court in Delaware, Hussey said its search for a buyer ended in August, when the company signed a letter of intent with KHC Acquisition LLC, a company registered in Delaware. American Metals Market, an industry trade publication, identified KHC as Kataman Metals, a St. Louis metals trader.
Kataman could not be reached for comment.
Hussey makes copper rod, sheet, plate and other products for the construction, electrical, chemical and other markets.
The court filing states Hussey faced "significant economic challenges" because of the recession and fluctuating copper prices. The company lost $3 million last year on sales of $381.9 million vs. a profit of $1.1 million and sales of $308.4 million the previous year, according to court records.
The documents indicate the copper producer has 536 full-time employees as well as temporary workers at plants in Leetsdale and Eminence, Ky. About 380 of the workers are represented by the United Steelworkers union, including 190 in Leetsdale. Their contract expires in November 2012.
After Hussey received a default notice from PNC in March 2010, the bank lenders gave the company some breathing room while it tried to refinance the debt, according to court records. The company hired Huron Consulting Services to find new backers. Huron had arranged a new consortium of lenders, but that deal fell through in March. Hussey then hired investment banker SSG Capital Advisors to sell the company's assets.
Hussey said in court filings it received five bids, with the best being from KHC. Other bidders will have a chance to top that offer in a court-supervised auction.
First Published September 28, 2011 10:22 am