A bankruptcy is a terrible thing to waste Demetriou

Dec 01, 2010 | 08:40 AM |

If Steven J. Demetriou could go back and do things differently during Aleris International Inc.'s 15-month stint under bankruptcy protection, he wouldn't change very much.

"I probably would have slept better," he quipped in an interview at the company's headquarters in Beachwood, Ohio. But restless nights aside, the rest of the process—from filing for Chapter 11 in February 2009 to emerging as a restructured entity in June 2010—proved in the end to be the right move for the downstream aluminum company, he said, leaving Aleris' management team with few regrets.

"As much as it was painful to go through the process—and our process is obviously more painful because of the stigma of Chapter 11—it turned out to be a success for us," said Demetriou, the company's chairman and chief executive officer. "We emerged essentially with the same set of assets, which showed that all we really needed was two things a short-term cash infusion coupled with what everyone's done—to really make sure we reduced costs and restructured where we needed to restructure."

Aleris certainly wasn't the only player in the aluminum sector to require a strategy change in the aftermath of the global financial crisis. Alcoa Inc., for example, turned to the equity markets, while Novelis Inc. and Rio Tinto Alcan received support from parent companies Hindalco Industries Ltd. and Rio Tinto, respectively, allowing them to weather the storm of collapsing aluminum prices and stagnant demand. Privately owned Aleris, however, was barred from the equity markets and its then-parent company, Texas Pacific Group, opted against a cash injection, leaving it with one clear survival strategy in its search for liquidity bankruptcy.....