LTV Files for Bankruptcy Protection
LTV Corp., the nation’s third-largest steel producer, filed for bankruptcy protection Friday, but a last-minute financing deal with Chase Manhattan Corp. averted an immediate shutdown.
Blaming unfairly priced imports for driving steel prices to 20-year lows, LTV said it needed an infusion of cash to avoid laying off all of its 18,000 employees.
“We have been able to reach an agreement with Chase whereby we will not be closing any facilities. We will be continuing operations until we work out a more formal financial arrangement,” Chairman William Bricker said.
Bricker spoke after an hourlong meeting with Cleveland Mayor Michael R. White and U.S. Reps. Dennis J. Kucinich and Stephanie Tubbs Jones, both of Ohio. At the same time, LTV lawyers were wheeling six boxes of documents into federal court in Youngstown, Ohio, where they filed for Chapter 11 bankruptcy protection.
The company warned Thursday that it was considering filing for protection from creditors because it couldn’t secure bank loans. Cleveland-based LTV had filed for bankruptcy once before, emerging from seven years of receivership in 1993.
Like many other steelmakers nationwide, LTV has struggled recently, posting a loss of $80 million in its third quarter. The company, which hasn’t turned a profit since 1997, has blamed its losses on low-cost steel imports.
Bricker said Thursday in a letter to city officials that LTV had expected to secure $225 million in loans from Chase to prevent shutdowns, but that the bank had backed out. Bricker did not disclose details of the new financing agreement Friday, nor did he say why the bank decided to go ahead with it. Chase officials also declined to comment.
Chase holds more than $1.2 billion in LTV collateral to cover $600 million in debts, Bricker said.
The company has said it would eliminate 26% of its jobs, or 3,400 positions, over three years.
Bricker, a longtime LTV director, became chairman, president and chief executive last month when Peter Kelly resigned.
LTV shares, which closed unchanged at 34 cents on Thursday on the New York Stock Exchange, did not trade Friday.
