Specialty steel recycler Keywell LLC has agreed to sell "a
substantial portion" of its assets to processor Cronimet Corp.,
the company said Sept. 23.
The agreement will see
Chicago-based Keywell file for Chapter 11 bankruptcy protection
"within the next few days to commence the sale process," the
Cronimet will acquire Keywells aerospace metals
businesses in Falconer, N.Y., and Monroe, N.C., while Keywell
will retain its properties in Chicago; Atlanta; Fairless Hills,
Pa.; Frewsburg, N.Y.; Detroit; and Carson, Calif.
While Keywell said it
will retain its facility in West Mifflin, Pa., Cronimet is also
said to be acquiring most of the facilitys assets and
equipment under the terms of the agreement.
The facility will be
operating "in a reduced capacity," Keywell said.
The sale "makes the
best of a bad situation by identifying a knowledgeable buyer
that understands the significant value in the companys
business," Keywell president and chief executive officer J.
Mark Lozier said in the statement. "Despite a series of
cost-cutting measures and efforts to obtain additional
financing and capital partners, the company has now concluded
that the sale to Cronimet through a managed process is the best
alternative for our creditors."
Cronimet president and
chief executive officer Frank Santoro told AMM that
the purchase "will expand Cronimets position" in the
specialty steel market, citing Keywells assets in
high-temperature and titanium alloys. "Keywell has good hi-temp
facilities, and they have good people," he said. "They will be
integrated into our group."
The process "will also
provide other investors and potential suitors with an
opportunity to top Cronimets bid for the companys
assets and business," Keywell said.
Santoro declined to
comment on either Cronimets demands for the sale process
or the likelihood that another investor could scupper
Cronimets acquisition with a higher bid.
concludes a tumultuous several months for Keywell, which has
been forced to close several facilities in the midst of
increasing financial difficulties and falling demand. In July,
the company temporarily closed its locations in Atlanta,
Chicago and Detroit while reducing staff at other facilities
amm.com, July 3). That was followed by the
temporary closure of Keywells Carson operation in August
amm.com, Aug. 6).
Earlier this month,
the New York State Department of Labor released a notice
setting an Oct. 24 closure date for Keywells Frewsburg
processing facility (
amm.com, Sept. 3).