Kaiser refinery sale stalls

The $525 million asking price for Kaiser Aluminum Corp.’s stake in an Australian refinery apparently is too rich.

The company received no qualified bids for its 20 percent interest in the Queensland Alumina Ltd. refinery. Without a bid, Kaiser canceled its Aug. 16 auction and is rethinking its sales strategy for the prized asset, the company said Wednesday.

Kaiser is attempting to sell most of its major factories to repay lenders and other creditors as a condition of its ongoing bankruptcy reorganization. The company filed for Chapter 11 protection in February 2002 and is attempting to emerge as a smaller, low-debt firm early next year.

Selling its stake in QAL is key part of the strategy.

Yet Kaiser’s main partner in the refinery operations called the $525 million price too high.

An article in the Australian Financial Review reported that Comalco Ltd., which owns 38.6 percent of the refinery, said building a new refinery would be cheaper than buying Kaiser’s holding.

The other companies with an ownership stake in QAL are Alcan and Pechiney.

About three years ago Kaiser sold an 8.3 percent stake in QAL to Comalco for $189 million. The money was used to pay down debts at the time.

Kaiser’s share of the alumina produced at QAL had been used by its former smelters in Mead and Tacoma. Both of those properties have since been shuttered and sold.

Kaiser’s other big alumina refineries also have been sold, including the Gramercy, La., factory which is fetching $23 million.

Much of the alumina production from that factory is locked up in long-term contracts, leaving Kaiser unable to take advantage of soaring spot prices for alumina.