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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 EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): JULY 1, 1999
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GULF STATES STEEL, INC. OF ALABAMA
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(Exact name of registrant as specified in its charter)
ALABAMA 33-92496 63-1141013
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(State or other (Commission (IRS Employer
jurisdiction of File Number) Identification No.)
incorporation)
174 SOUTH 26TH STREET, GADSDEN, ALABAMA 35904-1935
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (256) 543-6100
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ITEM 3. BANKRUPTCY.
On July 1, 1999, Gulf States Steel, Inc. of Alabama ("Gulf States Steel")
filed a voluntary petition seeking to reorganize under Chapter 11 of the United
States Bankruptcy Code (the "Bankruptcy Code") in the United States Bankruptcy
Court for the Northern District of Alabama (the "Court").
Pursuant to orders entered on July 7, 1999, the Court preliminarily
authorized (a) Gulf States Steel to obtain: (i) financing and other extensions
of credit from Fleet Capital Corporation and Congress Financial Corporation in
an amount not to exceed $65,000,000, and to grant security interests and liens
and accord superpriority claim status to Fleet Capital and Congress Financial
under the Bankruptcy Code, (ii) financing and other extensions of credit from
Ableco Finance LLC, as agent for itself and certain other term lenders
(collectively, the "Term Lenders"), in the amount of $17,350,000, and to grant
priming security interests and priming liens and accord superpriority claim
status to the Term Lenders under the Bankruptcy Code, and (iii) emergency trade
credit under a Preferred Supplier Continuous Credit Program (the "Program")
secured by liens on Gulf States Steel's assets with an administrative expense
priority and to pay credit extension fees; (b) the stipulation and order as to
adequate protection of the lien of State Street Bank & Trust Company, as
indenture trustee with respect to the Company's 13 1/2% Series B First Mortgage
Notes due 2003, which lien is being subordinated to the liens securing the
advances of the Term Lenders and the trade credit extended under the Program;
and (c) the notice of the final hearing on the financing facilities and the
Program to be held at 11:30 a.m., on July 20, 1999, at the U. S. Bankruptcy
Courtroom, 12th & Noble Street, Anniston, Alabama. Pending the final hearing,
the Term Lenders are authorized to advance only $6,350,000 and the emergency
trade credit under the Program is limited to $15,000,000. The facility provided
by Fleet Capital and Congress Financial will be used, initially, to retire the
Company's pre-petition revolving credit facility under which approximately
$49,000,000 is outstanding.
ITEM 7. EXHIBITS.
Exhibit No. Description of Exhibit
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(99) Press Release dated July 1, 1999
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SIGNATURES
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 hereunto duly authorized.
GULF STATES STEEL, INC. OF ALABAMA
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(Registrant)
Date: July 12, 1999 /s/ James Grimm
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James Grimm, Senior Vice President and
Chief Financial Officer
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PRESS RELEASE
Date: July 1, 1999
Contact: Robert Schaal, Gulf States Steel, Inc. (256/543-6105)
GULF STATES STEEL FILES FOR BANKRUPTCY PROTECTION
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Gulf States Steel, Inc. of Alabama, an integrated steel producer of plate, hot
roll, cold roll and galvanize flat rolled products in Gadsden, Alabama, has
filed a voluntary petition under Chapter 11 of the United States bankruptcy
code. The Chapter 11 filing will enable the Company to conduct its activities as
usual while completing its operational and financial restructuring. Robert
Schaal, Chairman and CEO, stated that the Company would be able to continue to
operate uninterrupted through the period of reorganization thanks to an
aggregate post-petition credit availability of about $100 million for which the
Company is seeking court approval. This credit is available due to the
continued confidence of the pre-petition creditors, Fleet Capital Corporation
and Congress Financial Corporation, as well as new facilities provided by a new
term lender and trade vendors under a preferred supplier credit program. A
committee representing note holders of the Company's 13 1/2% Series B First
Mortgage Notes due 2003 has, subject to court approval, consented to the $32
million of new facilities being secured by liens which are senior to the
existing liens on the First Mortgage Notes.
Mr. Schaal said "We regret having to file this petition just as we regret the
illegal dumping of foreign steel that has forced us into this situation.
However, the additional financing will allow us to implement a reorganization
plan that has as its goals the restructuring of debt, installation of key
capital improvements, and overall reorganization of cost structure and financial
affairs. The successful implementation of this plan will make Gulf States Steel
a strong participant in the flat rolled steel market in the Southeast. Current
management will operate the Company with the goal of providing our customers
with the best service in the industry. I am confident that Gulf States Steel
will emerge as a better-capitalized, lower cost, profitable company that will
provide real value to both our customers and our community."
This press release contains forward-looking statements made pursuant to the
"safe harbor" provisions of the federal securities law. Investors are cautioned
that such forward-looking statements are not guarantees of future performance,
involve risks and uncertainties, and that actual results may differ materially
from those contemplated by such forward-looking statements. Important factors
known to management that could cause actual results to differ materially from
those contemplated by the forward-looking statements in this press release
include, but are not limited to, the overall demand for steel, the ability to
maintain sales prices, productivity improvement programs, increases in the costs
of ferrous scrap, increases in pension costs, increases in other materials and
costs of production, increases in financing costs, labor relations, increased
domestic or foreign steel competition, adverse developments arising from the
Chapter 11 proceedings and adverse developments in the timing or results of the
Company's current business plan. Additional factors that would cause actual
results to differ materially from those contemplated in this press release can
be found in the Company's Securities and Exchange Commission reports on Form
10-Q for the quarter ended April 30, 1999 and the related Form 10-Q/A for such
period, and on Form 10-K for the fiscal year ended October 31, 1998. Detailed
information on all the Company's periodic report filings may be found on the SEC
EDGAR electronic filing database.
