BEACHWOOD, Ohio, Sept. 15 /PRNewswire/ -- Aleris Announces Enhanced
Liquidity Measures. In response to the current environment of historically
high prices and volatility in the forward aluminum price on the London
Metal Exchange (LME), Aleris has taken steps to preserve its existing
liquidity position and enhance its liquidity position going forward.
As of June 30, 2008, Aleris had over $440 million of revolver and cash
availability. In order to preserve this level of liquidity in the current
environment of increased volatility of the LME, Aleris has increased the
size of its revolving credit facility by $244 million from up to $850
million to up to approximately $1.1 billion, subject to applicable
borrowing bases. This increase will help Aleris maintain its June 30, 2008
liquidity position by providing increased availability under its revolving
credit facility in the event, and as a result, of the LME continuing its
long-term upward trend.
In addition, Aleris has adjusted its metal hedging strategy to preserve
our liquidity position by unwinding certain hedges that are related to base
inventory levels, which will expose the Company to more metal price lag or
one-time timing difference between the cost of metal and the price of metal
sold. Aleris believes that exposing a greater portion of its inventory to
metal price lag will enhance its liquidity position during this period of
aluminum price volatility. This adjustment in hedging strategy, which will
result in payments to settle hedge contracts, coupled with the recent
decline in the LME from its all time high (though still at historically
high levels), which negatively impacted selling prices, will result in
third quarter adjusted EBITDA from continuing operations to be negatively
impaired by metal price lag. Aleris expects this negative impact to be more
than offset by positive free cash flow associated with the decline in the
LME that will result in lower working capital needs.
Aleris believes these measures will maintain its current liquidity
position and should facilitate our ability to react to an unexpected
increase in the LME.
About Aleris
Aleris International, Inc. is a global leader in aluminum rolled
products and extrusions, aluminum recycling and specification alloy
production. Headquartered in Beachwood, Ohio, a suburb of Cleveland, the
Company operates over 40 production facilities in North America, Europe,
South America and Asia, and has approximately 8,400 employees. For more
information about Aleris, please visit our Web site at http://www.aleris.com
SAFE HARBOR REGARDING FORWARD-LOOKING STATEMENTS
Forward-looking statements made in this news release are made pursuant
to the safe harbor provision of the Private Securities Litigation Reform
Act of 1995. These include statements that contain words such as "believe,"
"expect," "anticipate," "intend," "estimate," "should" and similar
expressions intended to connote future events and circumstances, and
include statements regarding future actual and adjusted earnings; future
improvements in margins, processing volumes and pricing; overall 2008
operating performance; anticipated effective tax rates; expected cost
savings; success in integrating Aleris's acquisitions, including the
acquisition of the downstream aluminum businesses of Corus Group plc; its
future growth; the anticipated economic environment in 2008; future
benefits from acquisitions and new products; expected benefits from changes
in the industry landscape; and anticipated synergies resulting from the
acquisition of the downstream aluminum businesses of Corus Group plc and
other acquisitions. Investors are cautioned that all forward-looking
statements involve risks and uncertainties, and that actual results could
differ materially from those described in the forward-looking statements.
These risks and uncertainties would include, without limitation, Aleris's
levels of indebtedness and debt service obligations; its ability to
effectively integrate the business and operations of its acquisitions;
further slowdowns in automotive production in the U.S. and Europe; the
financial condition of Aleris's customers and future bankruptcies and
defaults by major customers; the availability at favorable cost of aluminum
scrap and other metal supplies that Aleris processes; the ability of Aleris
to enter into effective metals, natural gas and other commodity
derivatives; continued increases in natural gas and other fuel costs of
Aleris; a weakening in industrial demand resulting from a decline in U.S.
or world economic conditions, including any decline caused by terrorist
activities or other unanticipated events; future utilized capacity of
Aleris's various facilities; a continuation of building and construction
customers and distribution customers reducing their inventory levels and
reducing the volume of Aleris's shipments; restrictions on and future
levels and timing of capital expenditures; retention of Aleris's major
customers; the timing and amounts of collections; currency exchange
fluctuations; future write-downs or impairment charges which may be
required because of the occurrence of some of the uncertainties listed
above; and other risks listed in Aleris's filings with the Securities and
Exchange Commission (the "SEC"), including but not limited to Aleris's
annual report on Form 10-K for the fiscal year ended December 31, 2007 and
quarterly report on Form 10-Q for the quarter ended June 30, 2008,
particularly the sections entitled "Risk Factors" contained therein.
(Logo: http://www.newscom.com/cgi-bin/prnh/20050504/CLW056LOGO )
SOURCE Aleris International, Inc.
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Related links:
http://aleris.com
Photo Notes:
NewsCom: http://www.newscom.com/cgi-bin/prnh/20050504/CLW056LOGO
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PRN Photo Desk, photodesk@prnewswire.com
CONTACT:
Sean M. Stack, Aleris International, Inc.,
+1-216-910-3504
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