Oak Brook's A.M. Castle emerges from bankruptcy
An Oak Brook based struggling metals distributor restructured more than $300 million in debt and emerged from bankruptcy this week.
A.M. Castle & Co., a global distributor of specialty metal and supply chain solutions, said it emerged from its voluntary Chapter 11 proceedings after restructuring its balance sheet and reducing its debt burden and interest costs.
The company is now poised for growth, said President and CEO Steve Scheinkman. "A.M. Castle celebrates a proud step forward that marks a new beginning for our company. We have successfully and expeditiously completed our financial restructuring, positioning Castle for growth and enabling us to serve our customers and partner with our suppliers more efficiently than we have in the past few financially-challenged years," he said.
During the reorganization, the company, with about 950 employees, continued to operate as usual. There have not been any layoffs during the bankruptcy period, which began in April, said company spokesman Justin Frakes.
When the company filed for bankruptcy less than three months ago, court documents listed about $329 million in debt. Top creditors included Timkensteel Corp. in Chicago with $2.5 million; Huntington Alloys in Chicago with $1.9 million; and The Boeing Co. of Atlanta, Georgia, with $997,421.
The company is stronger and more able to compete than it has been for many years, Scheinkman said.
"Rumors of our demise were greatly exaggerated, and now, with one of the most competitive balance sheets in the industry, we look forward to regaining our leadership position. Moving forward, we will build on this success by focusing on developing our business, driving innovation for our customers, empowering our branches, and renewing our commitment to our employees and our culture."
The company said Friday that its initial annual cash interest expense will be approximately $4 million. "Further, even including interest on the new convertible debt held primarily by our shareholders, which will initially be paid "in-kind," our total yearly interest expense has decreased by nearly 70 percent, from approximately $36 million per year prior to the restructuring," said Patrick Anderson, executive vice president and CFO.
Founded in 1890, A.M. Castle & Co. serves customers in various industries, such as oil, gas, aerospace and industrial equipment. It specializes in the distribution of alloy and stainless steels, nickel alloys, aluminum and carbon. Castle and its affiliated companies operate out of 21 metals service centers throughout North America, Europe and Asia, the company website said.