HOUSTON - Kaiser Aluminum Corp. filed for protection from its creditors under Chapter 11 of the federal bankruptcy laws Tuesday, blaming a weakened economy, depressed prices and asbestos litigation.

The Houston-based producer of alumina, primary aluminum and fabricated aluminum products said several hours later that it had lined up $300 million in emergency funding from Bank of America and planned to continue operating as it restructures.

Kaiser and its wholly owned subsidiary Kaiser Aluminum & Chemical Corp. each filed bankruptcy petitions in a Delaware federal court.

Shares if Kaiser fell to 35 cents in trading on the New York Stock Exchange (news - web sites) Monday, before falling another penny in extended trading.

Kaiser said it has been facing significant debt payments deadlines at a time of unusually weak aluminum industry business conditions. Kaiser also cited the economic slowdown that was further exacerbated by the Sept. 11 attacks.

In addition, the company has become increasingly burdened by asbestos litigation and growing obligations for retiree medical and pension costs.

The company said the combination of factors has created the prospect of continued operating losses and negative cash flow, resulting in lower credit ratings and an inability to access the capital markets.

"The decision to seek protection under Chapter 11 will provide Kaiser with the opportunity to reorganize its financial structure and implement a strategic plan to return to sustained profitability," said Jack A. Hockema, president and chief executive. "The reorganization process will also allow the company to expand on and quicken the pace of its operational improvements."

Kaiser produces a wide range of materials such as bauxite, alumina and aluminum as well as finished products for the aerospace, ground transportation, and industrial markets.

*** POSTED FEBRUARY 14, 2002 ***