MIAMI--(EON: Enhanced Online News)--Optima Specialty Steel, Inc. (“Optima” or the “Company”) announced today that it and its subsidiaries have commenced a reorganization under Chapter 11 in the United States Bankruptcy Court for the District of Delaware, lead Case No. 16-12789. The Company plans to use the “breathing room” afforded by the Chapter 11 process in order to assess strategic options for a financial restructuring and address operational issues, resulting in a capital structure more suited to support its long-term growth and profitability. The Company’s normal day-to-day operations will continue without interruption. Optima remains completely focused on serving its customers and maintaining strong relationships with its suppliers.
The Company also announced that it currently has sufficient cash on hand to satisfy customary obligations associated with ongoing operations of its business, including payment of employee wages and benefits in the ordinary course, and payment of post-petition obligations to vendors under existing terms. The Company is currently considering several debtor-in-possession financing arrangements.
Motti Korf, chairman and CEO of Optima, said, “Since 2011 Optima has grown the Company through strategic acquisitions. The Company has maintained a focus on value-added specialty processing and customer support activities characterized by short lead, response and delivery times. While Optima has diversified end markets, including transportation, industrial equipment, yellow goods, agriculture, construction, and energy; our markets have experienced a decline over the past several years. However, our end-markets are starting to exhibit stable and improving fundamentals.
Optima shares the consensus view that steel markets will continue to experience growth in 2017 and the environment will be more favorable for the Company’s revenue and cash flow. Our focus on improving operating performance and reducing costs have well positioned the Company for improved operating and financial performance. The combination of a cost-effective operating platform and a reorganized capital structure through Chapter 11 will represent a new beginning for Optima. I am confident that we will emerge a much stronger company structured for future growth and greater profitability.”
Optima filed a variety of customary first day motions with the Bankruptcy Court in Delaware, which will help enable it to continue to conduct business as usual while it completes its restructuring.
Optima’s legal counsel is Greenberg Traurig, LLP and its financial advisors are Miller Buckfire & Co. LLC and Ernst & Young LLP.
More information about Optima’s reorganization is available on the claims agent website at http://cases.gardencitygroup.com/oma/.
About Optima Specialty Steel, Inc.:
Optima Specialty Steel, Inc., headquartered in Miami, FL, is one of North America’s leading independent manufacturers of specialty steel products including cold drawn seamless tubes, cold finished steel bars and hot rolled steel bars. As a steel processing specialist, the organization leverages its technical expertise, skilled workforce and sophisticated equipment to produce highly engineered products including pressure-carbon, pressure-alloy, mechanical-carbon and mechanical-alloy tubing and specialty bars that meet its clients’ exact order specifications. Optima Specialty Steel is operated by its four wholly-owned subsidiaries: South Lyon, MI-based Michigan Seamless Tube, LLC; Hammond, IN-based Niagara LaSalle Corporation; Cicero, IL – based Corey Steel Company and Ashland, KY-based Kentucky Electric Steel.