Court Orders Kaiser to Sell Stake in Alumina Refinery

Kaiser Aluminum said that, in a special hearing that concluded today, the U.S. Bankruptcy Court for the District of Delaware ruled that the company should proceed with the sale of its interests in and related to the Alpart alumina refinery in Jamaica to Hydro Aluminium a.s. in accordance with Hydro's previously announced exercise of its right of first refusal under the Alpart partnership agreement.

As disclosed in Kaiser's Form 10-Q for the first quarter of 2004, the base purchase price is $295 million plus certain adjustments, which are expected to be in the range of $20 million. The transaction is expected to result in a gross sales price in the range of $315 million and a pre-tax gain of approximately $100 million.

The company is currently working with the lenders under the Post-Petition Credit Agreement for an amendment that would, among other things, authorize the sale of the company's interests in Alpart and certain other commodity assets. In the interim, Kaiser Aluminum has obtained a waiver under this Credit Agreement that, among other things, permits the sale of the company's interests in Alpart. The company currently expects that the proceeds from the sale will be held in escrow pending the completion and approval by the Court of the amendment to the Credit Agreement and the Intercompany Agreement.

Based on the Court order, Kaiser intends to proceed expeditiously toward a closing within the next several weeks. However, no assurances can be given in this regard.

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