Scrap News

Metal Management Files for Bankruptcy

Metal Management Inc., Chicago, has agreed in principle on a Chapter 11 bankruptcy restructuring that will give holders of its 10% subordinated notes virtually all of the company’s equity.

The filing by the scrap metal consolidating company makes it the third of the three rapid consolidators of the late 1990s—along with Philip Services Corp. and Recycling Industries Inc .—to file for bankruptcy.

The heavily leveraged firm completed the filing five days after a $9 million “balloon” interest payment was due on Nov. 15. As part of the agreement, the company did not make the payment due on its 10% notes.

In a statement made as part of the restructuring announcement, Metal Management chairman and CEO Albert Cozzi said, “we appreciate the confidence that our customers have shown while we have negotiated this agreement,” adding that “the people we do business with every day are the lifeblood of our company.”

But in an American Metal Market report in late November, several scrap suppliers (who requested anonymity) expressed unhappiness with a condition of the plan that moves to the end of the repayment line any company that ceases doing business with Metal Management. “I’m owed money and it looks like I won’t get paid unless I let them owe me more money,” one processor complained.

Also feeling slighted by the plan are Metal Management common and preferred stockholders, who together now own just 1% of the scrap company. Holders of the 10% subordinated notes own 99% of the firm.

As part of the restructuring, the company’s senior bank lenders have agreed to provide it with the ability to borrow an additional $20 million to maintain operations.

“The strong support of our banks and bondholders for our restructuring demonstrates their confidence in Metal Management’s operations,” Cozzi says.

Metal Management remains a leading North American processor of scrap metal, with about 50 U.S. scrap facilities and nearly $1 billion in annual revenues.

2001 Electronics Recycling Summit Slated

Two electronics industry recycling events will be linking up in April, 2001 to draw together all sectors of the growing recycling segment.The Fourth International Conference on Electronic Products Recovery/Recycling (EPR2) has been sponsored annually by the nonprofit, nongovernmental National Safety Council (NSC). In 2001, EPR2 will also be co-sponsored for the first time by the International Association of Electronics Recyclers (IAER), Albany, N.Y. The 2001 meeting will be held jointly with IAER’s second annual Electronics Recycling Summit.

“Bringing together these two nationally and internationally recognized electronics events builds on the spirit of collaboration from the past EPR2 and Summit meetings,” says Diana Bendz, corporate director of environmentally conscious products at IBM.

The EPR2 and Summit events will be held April 17-20, 2001 at the Hyatt Regency Crystal City Hotel, Arlington, Va., near Washington, DC.

“Building on the strengths of these two programs will help ensure an opportunity for the entire community of public and private sector interests to learn from each other and to work with each other more effectively,” Bendz says, chair of the 2001 events.

Program plans include presentations on a wide variety of technical, business and government-related topics, along with presentations by guest speakers, workshops, tutorials, exhibits and organizational meetings.

The event’s sponsors hope participation by business, government, university, academic, nonprofit, and citizens interests will “strengthen efforts to deal effectively and responsibly with the rapidly growing numbers of ‘end of life’ electronic products.”

ISRI to Co-host Symposium at Spring BIR Meeting

The Institute of Scrap Recycling Industries (ISRI), Washington, will act as co-host at a symposium on ferrous scrap in conjunction with the Bureau of International Recycling (BIR) spring convention, taking place in May in Madrid.

ISRI and the Brussels-based BIR will co-host their first jointly planned symposium—a one-day conference—with steel demand and scrap fundamentals from an international market perspective being the topic. The co-hosted event is scheduled for May 21, preceding BIR’s three-day Spring Convention, which takes place at the Melia Castilla Hotel, May 22-24.

BIR and ISRI leaders crafted the symposium concept during BIR’s World Recycling Convention in San Francisco this spring. The two organizations then jointly agreed to proceed with the project during a special meeting chaired by Anthony P. Bird OBE, chairman of BIR’s Special Projects Committee, during the BIR Fall Convention in Düsseldorf, Germany. A joint BIR and ISRI development team has been appointed to plan all aspects of the program.

Although the symposium is linked to the BIR Spring Convention, it will be an independent conference in its own right open to non-members of both BIR and ISRI, as well as invited members and guests.

BIR President Barry Hunter and ISRI Chair Sam Hummelstein expressed satisfaction in being able to work together to increase international understanding of the complexities of international steel recycling.

Information on the program’s speakers, topics, registration, and hotel reservations will be available from both organizations as the scheduled event nears.