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July 10, 1999 Kaiser, Maxxam problems compound Bert Caldwell - The Spokesman-Review The aftershocks of Tuesday's explosion at a Gramercy, La., alumina plant continued to rattle Kaiser Aluminum and corporate parent Maxxam Corp. Friday. The Standard & Poor's rating agency downgraded its outlook for Maxxam based on difficult operating conditions not only for Kaiser, but also for its Pacific Lumber subsidiary. The blast at Gramercy will idle the plant for months, Kaiser officials say. And Pacific, a major producer of redwood lumber, has been crimped by difficulties getting harvest plans approved. With Gramercy sidelined, prices of alumina, the raw material of aluminum, spiked Friday. But analyst Valid Fahti of ABN AMRO expects that to subside. The question for Kaiser officials, he said, is whether to rebuild Gramercy and -- if so -- how much modernization should be undertaken in the process. "The company needs to make hard decisions here," he said. Kaiser hasn't determined the cost of repairs, said spokesman Scott Lamb. He said one of two workers listed as critical after the accident has been taken off that list, and another less-severely injured worker has been discharged from the hospital. Although S&P affirmed its current ratings on Maxxam debt, the company switched the outlook from positive to negative because of the uncertainty about Gramercy's future and the direction of aluminum prices. Maxxam spokesman Josh Reiss said the company was disappointed the outlook was revised. "We think the company is well-positioned to deliver long-term shareholder value," he said.
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