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Wolverine Tube Mulls Bankruptcy

The stock plunges more than 50%.

Wolverine Tube (WLV) was losing more than half its value Wednesday after the company said in a regulatory document that it might consider filing Chapter 11.

The company has been evaluating refinancing and restructuring alternatives ahead of the maturities of its secured revolving credit facility and receivables sale facility in 2008 and two classes of senior notes in 2008 and 2009, as well as its projected short-term liquidity needs.

Accordingly, Wolverine filed documents with the

Securities and Exchange Commission

for an exchange offer and consent solicitation to swap new equity and new secured notes for the senior notes. In order for the offer to be completed, a minimum amount of the notes will have to be tendered.

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If the company, a provider of copper and copper-alloy tube, does go forward with the offer, but the conditions aren't met, Wolverine said it will consider other options, including a possible bankruptcy filing.

"Today's filing is another step in the company's efforts to improve its overall financial health," Chip Manning, Wolverine's president and chief executive, said in a statement. "It is important to note that we are still continuing to explore a range of alternatives, and no decision has been made on which course of action the company will ultimately take."

Shareholders weren't taking any chances, and Wolverine's stock was sinking $1.70, or 59.2%, to $1.17 in heavy trading.

"We continue to believe that liquidity is sufficient to sustain our operations in the near- to mid-term," Manning said. "The company's restructuring process should have no impact on our day-to-day operations, and our customers and vendors can continue to rely on the same high quality service and relationships with Wolverine that they have come to expect."

Separately, Wolverine reported a third-quarter loss of $49.5 million, or $3.29 a share, as compared with a loss of $11.2 million, or 74 cents a share, in the year-ago period. The latest quarter includes $44.3 million of after-tax restructuring and other nonrecurring charges.

Net sales for the third quarter were $396.1 million, up from $225.7 million last year, mainly because of the increased price of copper.