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Governor shares Rep. McDaniel’s concerns about $15 million state spent on Unity Aluminum project

By Tom Latek
Kentucky Today

Gov. Andy Beshear says he shares the same concerns as lawmakers about the $15 million Kentucky spent to help build a $1.7 billion aluminum mill in northeast Kentucky four years ago—the one that has yet to be built.

Unity Aluminum, formerly Braidy Industries, received the funding at the behest of then-Gov. Matt Bevin during the last day of the 2017 session of the Kentucky General Assembly.

During a Thursday press conference, Beshear said his concerns dated back to when he was still serving as attorney general.

“This was the first time we ever wrote a company a straight-up check,” Beshear said. “After the last administration wrote the straight-up check, they separately entered another agreement where they let go of all the security interest we had, how we could try to get the money back. That wasn’t taken before the legislature.”

The 1.8 million-square-foot facility, to be located in the EastPark Industrial Center near Ashland, was expected to open the second quarter of 2020 and have a production capacity of 300,000 tons of aluminum alloy sheet and plate each year, mainly for the automotive industry.

The start date has been repeatedly pushed back and is now expected to open in 2025 due to financing issues, said company officials.

Beshear said Braidy Industries was basically a start-up.

Rep. Chris McDaniel

“I don’t know how you can justify relieving the company of that legal obligation or whatever that security interest was that we can get back. I’m concerned whether we can get the land back that they’re on if they don’t begin to operate. If we had that security interest, we may have acted on it a long time ago.”

Last week, during a meeting of the Interim Joint Appropriations and Revenue Committee, co-chair Sen. Christian McDaniel, R-Taylor Mill, said, “I believe one of the worst financial votes I’ve ever taken is this one. I feel like two administrations now and multiple General Assemblies have been played for fools.”

Beshear also expressed concerns about the present leadership team at Unity Aluminum, which includes two individuals who worked for Bevin while he was in office.

“I think there needs to be a deep dive into how the policymakers inside the last administration are somehow the president or senior executives of the company that they encouraged direct investment in and then let them out of the obligations,” Beshear said. “No one would do business that way. No one’s attorneys would advise them to do business that way.”

He added, “I understand every lawmaker who is concerned, I understand exactly where they’re coming from, and I am happy to talk with any and all of them. I believe we are all on the same page. What I would talk with them about is what options we really have, versus what we don’t.”

See NKyTribune’s earlier story here.    

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  1. Ruth Bamberger says:

    You can blame Republicans from the top down for this fiasco- Trump and McConnell for pushing through an exception to US sanctions on Russian companies to enable the Russian company Rusal, run by an oligarch, to invest in the project; then Bevin and the General Assembly to rapidly push through the $15 million. Ashland certainly needs jobs, but these kinds of deals at the expense of taxpayers is not the way to do it.

  2. Semo Sancus says:

    The $15mm investment by KY is in the form of a senior secured note; they will get $15mm + interest back when Braidy files for BK (probably by YE). The real bagholders are the suckers who bought the equity and the serial stock promoter’s, Craig Bouchard’s, lie. This equity is worthless and equity bagholders will get $0 (all the cash will go to KY) in a world where everything is up 2-5x. How embarrassing.

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