According to multiple reports, Keywell LLC, a Chicago-based stainless steel recycling company, has filed for Chapter 11 bankruptcy protection. The company has struggled over the past several quarters in the face of slumping nickel prices. The company had closed several facilities in light of difficult markets.
According to a Reuters report, Mark Lozier, Keywell president and CEO, has agreed to sell the firm to Cronimet Holdings Inc., with U.S. headquarters in Aliquippa, Pa., though Lozier says he would still consider a better offer.
According to an article in The Wall Street Journal, in court filings Lozier blames many yof Keywell's problems on lumping nickel prices and slow sales. The company reports that it had sold only $142 million worth of scrap metal—or roughly 73,000 tons—by Aug. 31, 2013. It typically sells about $330 million, or 140,000 tons, each year. In its filings, Keywell also cites delays by some big stainless steel customers in taking delivery of metal even after it had already been loaded into rail cars.
Keywell says it owes about $28 million to trade partners and other unsecured creditors. It also owes at least $10.5 million in loans, largely to a lender group formed by some shareholders and officers of the company, according to court papers.