SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities and Exchange Act of 1934
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Date of Report (Date of earliest event reported): December 4, 2000
RENCO METALS, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 333-4513 13-3724916
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(State or other jurisdiction (Commission File (IRS Employer
of incorporation) Number) Identification Number)
238 NORTH 2200 WEST, SALT LAKE CITY, UT 84116
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code:
N/A
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(Former name or former address, if changed since last report)
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ITEM 2. DISPOSITION OF ASSETS.
On December 4, 2000, Renco Metals, Inc. ("Renco Metals") sold all the
outstanding shares of capital stock of Sabel Industries, Inc., an Alabama
corporation ("Sabel"), to K. Sabel Holdings, Inc., an Alabama corporation
controlled by Keith Sabel, the President and Chief Executive of Sabel. Renco
Metals received approximately $8 million in cash proceeds from the sale, net of
the then outstanding balance owed by Sabel under Sabel's revolving credit
facility, which was paid at the closing. The purchase price and terms of the
agreement effecting the sale were reached through arms length negotiations.
In connection with Renco Metals' sale of Sabel, Sabel's guarantee of Renco
Metals' payment obligations under the indenture governing Renco Metals' 11.5 %
Senior Notes due 2003 (the "Senior Notes") and dated as of July 1, 1996, was
released.
ITEM 5. OTHER EVENTS
Renco Metals anticipates that insufficient liquidity will cause management to
elect to forego making the semi-annual $8.6 million Senior Notes interest
payment due January 1, 2001. Management believes that a more prudent use of
liquidity, including the proceeds from the sale of Sabel, is to fund the
installation of new magnesium cell technology at Magnesium Corporation of
America, a wholly owned subsidiary of Renco Metals ("MagCorp").
The United States International Trade Commission (the "Commission") recently
determined that there is a reasonable indication that the magnesium industry in
the United States is materially injured by reason of imports of pure magnesium
from Israel, Russia and pure granular magnesium from China that are alleged to
be sold in the United States at less than fair value and by reason of imports of
pure magnesium from Israel that are alleged to be subsidized by the government
of Israel. A governmental investigation into the foregoing is continuing and has
not yet resulted in final determinations.
The preliminary determinations by the Commission were in response to a petition
filed by Magcorp, the United Steel Workers of America, Local 8319, Salt Lake
City, Utah, and the United Steelworkers of America, AFL-CIO-CLC (USWA
International).
In October 2000, the United States Environmental Protection Agency (the "EPA")
asserted claims against MagCorp, alleging violations of environmental laws in
connection with MagCorp's waste management practices. After negotiations between
MagCorp and the EPA failed to resolve the current claims, the EPA informed
MagCorp that the EPA will initiate litigation. MagCorp believes that MagCorp's
waste management practices are in material compliance with applicable laws and
will vigorously defend itself against such claims. Such claims, if successfully
pursued, could have a material adverse effect on MagCorp's financial condition
or overall trends in results of operations.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
RENCO METALS, INC.
By: /s/ Roger L. Fay
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Name: Roger L. Fay
Title: Vice President, Finance
Date: December 19, 2000
