Republic Engineered Products LLC -- which recently filed for Chapter 11 creditor protection and immediately idled all operations -- has secured federal bankruptcy court approval for its debtor-in-possession financing arrangement, a resumed production at all its plants.
The DIP package brings Republic $45 million from a new lending consortium (though some of the previous lenders are included), and the steelmaker said it will be hiring an investment banker to locate a new investor or group of investors.
Ohio-based Republic emerged from a prior tour in bankruptcy in 2002 and was proceeding with a new management strategy that involved selling off downstream operations and concentrating on the core steelmaking facilities. A number of modernization and capital improvements were effected, but Republic was hit particularly hard by the August 14 blackout that spread across Ohio, New York, and other Northeast states.
A blast furnace was seriously damaged when cooling systems failed when power was lost. Rolling mill motors also failed, and the subsequent disruptions to production flow created a complex of new problems for Republic. President and CEO Joseph F. Lapinsky said, "We are moving rapidly to build a stronger Republic. We are pleased that this financing will support ongoing production, and that the restart of our operations is proceeding according to plan. Republic has enjoyed strong support from customers and extraordinary responsiveness from employees over the past week. We will need their continued support in the weeks ahead as we strengthen our leadership position in the SBQ industry."
The steelmaker said it has letters from about two-thirds of its customers stating that Republic is a critical supplier and that they anticipate "a prompt reorganization ... to assure long-term supply."