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Summarized by Michael Nielsen
Geneva Steels Itself for Reorganization
OREM, UTAH -- Geneva Steel filed a Chapter 11 reorganization plan last
week that may bring about an end to its financial troubles. In saving
the company, however, the shareholders will lose their ownership
interest in the company.
For example, Joe Cannon, who has been the company's chairman and CEO,
said "I will go from once being one of the company's largest
shareholders to an inconsequential one." If the sale is approved,
ownership of Geneva Steel will change to its creditors, but the
reorganization will make the plant competitive once again.
Industry observers joined with the employees in praising the plan.
"By canceling all their debt and taking ownership, [Geneva's
bondholders] are preparing the company to have a very clean balance
sheet going forward," said Cannon. Kelly Hansen, union Local 2701
financial secretary, concurs saying, "We have waited for this a long
time. Hopefully, the plan will position Geneva as a strong competitor
in the steel industry going forward."
A hearing on the reorganization plan is expected to be held Oct. 13, 2000.
Source:
Geneva Steels Itself for Reorganization
Salt Lake Tribune 21Jul00 B4
By Steven Oberbeck: Salt Lake Tribune
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