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Wise Metals Group LLC has begun developing customers in Europe and the Middle East for its can stock but will need to wrestle with limits on working capital in the short term caused by nervous financial markets.”Wise has reached agreements in principle with major manufacturers in Europe and the Middle East to buy can sheet,” David F. D’Addario, chairman and chief executive officer of the Baltimore-based company, told financial analysts in a quarterly conference call Tuesday.”(When) Alcoa completed a shutdown of (the) Swansea plant in Wales it was widely believed that this would not cause a shortage in the production of can sheet and, in particular, of end stock in Europe for at least a couple of years,” he said. “However, because of double-digit growth, the shortage has accelerated. None of the (can manufacturers) that we talked with recently anticipates anything less than a continual growth pattern at these significant levels.”Some of the overseas companies make steel beverage cans that require aluminum end stock, which is more profitable and easier to ship than body stock. End stock is a heavily coated product and, therefore, can be more easily shipped overseas, while body stock requires slightly more expensive packaging to avoid water staining.D’Addario said he expects that a significant ratio of Wise’s can stock shipments between 2008 and 2010 will be trans-Atlantic, although he didn’t specify a quantity.”We have been attempting to reach an agreement that would provide substantially increased liquidity. However, with recent tremors in the capital markets, coupled with our not-so-unexpected reduction in volumes, we have not been able to complete the transaction on the timeline we had previously anticipated,” he said of Wise’s finances. “We have now begun to regroup and to seek alternative yet similar financing options. It has been and will continue to be necessary to cut back production until the new financing is funded, which reduces profitability while maintaining manageable cash flow.”The company’s overseas prospects were firmed up only recently, he said, adding that this should ease the refinancing. “We hope to have several new financing proposals to review in the coming weeks as we work toward signing an agreement.”The company has invited proposals for outsourcing maintenance activities at its Alabama mill. If Wise chooses this option, current workers would be offered positions with the contractor at wages comparable to those now in effect and would be allowed to seek union representation, D’Addario said.”(We must) continue to be competitive and succeed, locally in Alabama and more importantly on a global basis,” he added.The company posted a second-quarter net loss of $4.9 million vs. a year-earlier loss of $16.5 million (AMM, Aug. 15). Filtering out the negative impact of uncompleted hedging arrangements foreshadowing later offsetting gains, the loss shrank to $1.6 million in the recent quarter vs. $13 million a year ago.Gary Curtis, president of Wise Recycling, told the analysts that his segment is looking to buy at least one additional scrapyard in the mid-Atlantic states, while another expansion possibility will be the creation of a processing facility from scratch in Ohio.Wise Recycling currently has seven yards, several of which are being upgraded with fresh capital spending. Some of them have begun handling steel scrap, along with aluminum and copper, Curtis said.During a question period, D’Addario said that Ball Corp. ranks first among Wise’s customers for can stock, and hinted that Rexam Plc is one of the companies involved in Wise’s envisioned European growth. “We continue to expand that relationship, both here and throughout the world,” he said.D’Addario said ties to Crown Cork & Seal Co. are limited. The relationship frayed after Wise began insisting on an end to price ceilings, limiting the extent to which customers must absorb aluminum costs when the price rises in mid-contract.”We continue to supply them with food container (sheet), and we have been supplying them opportunistically (with can stock) wherever they need help. We’ve had some very good conversations with them recently, so that’s also a strengthening situation,” he said.