Horsehead Industries, Inc. has signed an agreement with its lenders to provide the company with a $50 million in Debtor-In-Possession financing facility. The DIP financing has been given interim approval by the Bankruptcy Court and the final approval hearing is scheduled for January 9, 2003. HII was granted protection under Chapter 11 of the U. S. Bankruptcy Law in August 2002.
"The DIP financing will provide HII with the solid financial foundation from which it will operate during the reorganization," said David Carpenter, Horsehead's Chairman and CEO. "The agreement to provide Horsehead Industries with DIP financing demonstrates to our customers, vendors, and employees that the lenders have confidence in our ability to emerge from bankruptcy as a very viable company. The DIP financing will play a very important role in our financial reorganization, and our ability to continue to provide our customers with quality goods and services." The lending institutions involved include JPMorgan Chase Bank, CIT Group/Business Credit, Inc., Fleet National Bank and LaSalle Business Credit, Inc.
Carpenter also stated that, "As a part of the company's long-term growth and operating strategy, in October of 2002, Horsehead Industries successfully converted to 100 percent secondary/scrap-based raw materials and reduced operating costs in the process. This strategy resulted in a 30,000-ton increase in material processed by our Horsehead Resource Development Company, Inc. (HRD). HII is the only large zinc smelter in the world to accomplish this goal. Now, with the DIP financing in place, we will be able to complete capital projects that will allow us to increase our capacity to handle Electric Arc Furnace (EAF) dust by an additional 15%."
While DIP financing was being arranged, Horsehead's multi-state zinc production and zinc recycling facilities have continued daily operations. "Market demand for our products and services has remained strong and our operations have continued to run 24 hours a day, seven days per week," said Dr. Carpenter. "We will continue to provide the steel industry with the United States Environmental Protection Agency's (EPA) Best Demonstrated Available Technology (BDAT) for environmentally-sound recycling of zinc- containing hazardous wastes. We will also continue to produce quality zinc products as the largest zinc producer in the United States, and the world's foremost manufacturer of value-added zinc products including zinc oxide, zinc dust and zinc powder."
HII, with seven operations in six states and multiple primary operations in Pennsylvania, is the world leader in producing zinc from recycled sources. HII is comprised of two vertically integrated operating companies. Zinc Corporation of America, Monaca, PA, operates a state-of-the-art, highly flexible electrothermic zinc refinery, that is the largest manufacturer in the world of value-added zinc products and Prime Western zinc metal. Horsehead Resource Development Company (HRD), Palmerton, PA, is the world leader in recycling zinc-bearing hazardous electric arc furnace (EAF) dust, derived from the steel industry, through use of its proprietary technology designated BDAT by EPA. Horsehead and its predecessors have been technological leaders and innovators in the zinc industry for more than 100 years.