NEW YORK 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 company said.
Aliquippa, Pa.-based 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.
The agreement 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).