Partial Curtailment of Operations
Partial Curtailment of Operations
HANNIBAL, Ohio--(BUSINESS WIRE)-- On July 31st, the Public Utilities Commission of Ohio (PUCO) denied the timing of Ormet's request for relief from the current power rate with Ohio Power and affirmed the matter has been set for formal hearing on August 27, 2013. Ormet was forced to file for bankruptcy on February 25, 2013 due to low metal prices and exceedingly high power costs. The Ohio Power industrial rate which establishes the base rate for Ormet to procure power has increased from $39.66 per MWh when the Unique Arrangement was established in 2009 to $62.83/MWh in June an increase of some 58%. The Unique Arrangement was created as an incentive to maintain and create jobs, which Ormet has successfully done to date. In 2013 these rate increases will virtually eliminate the benefits provided by the Unique Arrangement.
Ormet has submitted a motion today requesting deferral of the power bills that would be paid in August and September to provide the necessary liquidity to continue to operate its Hannibal Ohio facility while allowing time for the PUCO to conduct a full hearing on Ormet's requested relief.
"We at Ormet were terribly disappointed today by the denial of the timing of our request for Emergency Relief by the Public Utilities Commission. The consequence of this decision is Ormet must immediately begin the shutdown of half of our existing operations to conserve cash. I want to thank the USW, Ormet employees and the people of Ohio for their support current and past. In the current metal pricing environment, Ormet simply cannot overcome the massive increase in the Ohio Power electric rates experienced over the past several years. Ormet must receive the relief requested to continue operations and build a future for our employees and community." said Mike Tanchuk, Chief Executive Officer and President of Ormet Corporation.
This Statement contains forward-looking statements that can be identified by use of words such as "anticipates," "believes," "estimates," "expects," "hopes," "targets," "should," "forecast," "outlook," "projects" or other words of similar meaning. All statements that address the Company's expectations or projections about the future, including statements about the Company's strategy for growth, cost reduction goals, expenditures, financial results, liquidity and capital needs, are forward-looking statements. Forward-looking statements are based on the Company's estimates, assumptions and expectations of future events and are subject to a number of risks and uncertainties and may or may not be realized. The Company cannot guarantee its future performance or results of operations. All forward-looking statements in this press release are based on information available to the Company on the date hereof. The Company disclaims any intention or obligation to update or revise any forward-looking statements, except as may be required by law. The Company's business is subject to a number of significant risks and uncertainties, including the potential adverse impact of its Chapter 11 cases and the PUCO ruling on the Company's operations and relationships with customers and suppliers and its ability to close an asset purchase agreement with Smelter Acquisition, LLC. Given the significant uncertainties and risks to which the Company is subject (a) the reader should not place undue reliance on forward-looking statements contained in this press release and (b) the Company's future results could differ materially from the Company's current results and from those anticipated in the Company's forward-looking statements.
Headquartered in Hannibal, Ohio, Ormet Corporation is a major U.S. producer of aluminum. Ormet employs approximately 1,250 people. For more information, visit the Company's website at www.ormet.com.
James Burns Riley, 740-483-2602
KEYWORDS: United States North America Ohio
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