Boston, MA 04/24/2014 (wallstreetpr) – AK Steel Holding Corporation (NYSE:AKS) reported a greater than expected quarterly net loss of $86.1 million emanating from higher operating costs. These results were impacted negatively by rising energy costs as a result of extreme climate conditions, a legal settlement and by unplanned and planned blast furnace outrages. Net sales during the 1Q of this year were reported at $1.38 billion on shipments of 1,262,100 tonnes. The overall decline in production reflects a reduction in shipments of carbon steel and electrical steel to the spot market.
Key developments
The company has recently into a revolving credit facility of $1.1 billion with a consortium of lenders. This new asset backed credit facility will expire in March 2019, and it essentially has replaced the company’s earlier credit facility for the same amount which was due for expiry in April 2016 and is secured by the same asset classes as the replaced facility.
The United Steelworkers (USW) Local 169 has ratified a three-year term labor contract covering nearly 280 hourly maintenance and production employees at AK Steel Holding Corporation (NYSE:AKS)’s Mansfield (OH) Works. This agreement has been in effect starting April 1 this year and will expire on March 31, 2017.
United States District Court of Delaware has confirmed that AK Steel Holding Corp’s advanced high-strength steel product, ULTRALUME does not infringe upon an ArcelorMittal patent. The Court ruled that Arcelor Mittal’s patent was invalid due to its deliberate violation of a statutory prohibition on broadening a patent through reissue more than two years from the grant of the initial patent.
AK Steel Holding Corp’s joint venture with Magnetation Inc. has successfully completed a senior secured note offering worth $325 million and has entered into a senior secured credit facility of $50 million. The proceeds from the note offering will be used largely to fund the construction of a new plant in Reynolds to manufacture superior quality iron ore pellets which is a crucial raw material for steel. Manufacturing from this pellet plant will supply blast furnaces of AK Steel Holding Corporation (NYSE:AKS) located in Kentucky and Ohio.
