Intermet (NASDAQ:INMTQ)
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INTERMET Reaches Agreements With Major Customers to Amend
Contracts
Company intends to withdraw motion to reject supply contracts
TROY, Mich., Dec. 28 /PRNewswire-FirstCall/ -- INTERMET Corporation (INMTQ.PK)
announced today that it has reached agreements with its largest customers to
amend certain purchase orders and contracts on mutually satisfactory terms,
primarily related to the recovery of scrap-steel and other raw-material costs.
INTERMET intends to file a motion today with the Bankruptcy Court for authority
to assume these agreements. If the motion is approved by the court, INTERMET
intends to withdraw the motion it filed with the court on November 17, 2004,
for authority to reject certain executory customer supply contracts.
"We are pleased that agreements have been reached with these important
customers, who represent nearly 80 percent of the company's North American
business," said Gary F. Ruff, INTERMET's Chairman and CEO. "It is a major step
in the right direction as we continue with our restructuring process. We
appreciate the support of our customers and we remain committed to helping them
meet their needs with quality cast-metal components."
INTERMET informed certain customers in mid-November that it was asking for
court authority to reject contracts determined to be burdensome because of
terms that did not allow sufficient recovery of raw-material costs, primarily
scrap steel.
Terms of the amended agreements were not disclosed.
About INTERMET
With headquarters in Troy, Michigan, INTERMET Corporation is a manufacturer of
powertrain, chassis/suspension and structural components for the automotive
industry. The company has approximately 5,800 employees worldwide. More
information is available on the Internet at http://www.intermet.com/ .
Specific information relating to the Chapter 11 cases filed by INTERMET and
certain of its domestic subsidiaries can be found on the Internet at
http://www.administar.net/ .
Cautionary Statement
This news release includes forward-looking statements within the meaning of the
Private Securities Litigation Reform Act of 1995. The word "intends" and
similar words and expressions identify forward-looking statements. These
statements are not guarantees of future performance but instead involve various
risks and uncertainties. INTERMET's actual results may differ materially from
those suggested by its forward-looking statements due to factors such as: the
economic cost, management distraction and lost business opportunities
associated with bankruptcy proceedings; INTERMET's ability to consummate its
anticipated DIP financing; the high cost of scrap steel and the possibility
that scrap steel costs will remain at high levels or continue to increase,
which would have further negative effects on INTERMET's profitability, cash
flow, liquidity and ability to borrow; fluctuations in the cost of other raw
materials, including the cost of energy, aluminum, zinc, magnesium and alloys,
and INTERMET's ability, if any, to pass those costs on to its customers;
pricing practices of INTERMET's customers, including changes in their payment
terms resulting from the discontinuation of early payment programs and
continuing demands for price concessions as a condition to retaining current
business or obtaining new business, and the negative effect that price
concessions have on profit margins; changes in procurement practices and
policies of INTERMET's customers for automotive components, including the risk
of the loss of major customers or the loss of current or prospective vehicle
programs as a result of INTERMET's financial condition and prospects (or
otherwise); possible inability to close unprofitable plants or to transfer work
from one plant to another because of the related costs or customer
requirements; general economic conditions, including any downturn in the
markets in which INTERMET operates; fluctuations in automobile and light and
heavy truck production, which directly affect demand for INTERMET's products;
deterioration in the market share of any of INTERMET's major customers;
fluctuations in foreign currency exchange rates; work stoppages or other labor
disputes that could disrupt production at INTERMET's facilities or those of its
customers; continuing changes in environmental regulations to which INTERMET is
subject, and the costs INTERMET will incur in meeting more stringent
regulations; factors or presently unknown circumstances that may result in
impairment of INTERMET's assets, including further write-downs of its goodwill;
and other risks as detailed from time to time in INTERMET's periodic SEC
reports.
DATASOURCE: INTERMET Corporation
CONTACT: Mike Kelly of INTERMET Corporation, +1-248-952-2500
Web site: http://www.intermet.com/