Sealaska loses money for second consecutive year

Posted: Tuesday, May 07, 2002

JUNEAU (AP) -- For the second consecutive year, Sealaska Corp. lost money last year.

The Juneau-based Native regional corporation lost $21 million on revenue of $146 million.

The financial bath is not as deep as in 2000, when the red ink hit $122 million. The company also reported positive cash flow from business operations of $25.7 million last year, a fivefold jump from a year before.

Sealaska attributed its 2001 losses to bad investments, mainly from TriQuest Corp., a plastics company with offices in Mexico and Washington state that lost $24 million

Despite the setback, Sealaska isn't getting out of the plastics business. Last year, it formed a joint venture with Nypro Inc., an international plastics company, to manage TriQuest's Guadalajara plant. It expects to eventually make money by taking advantage of Sealaska's status as a minority-owned company, according to Sealaska's annual report.

Since it was formed by Congress in 1971 under the Alaska Native Claims Settlement Act, Sealaska's core business has been timber. In recent years, the company has made investments to diversify, with limited success.

Sealaska loaned the San Pasqual tribe $14.7 million to open a gambling casino near Escondido, Calif. The tribe opened a temporary casino with several hundred slot machines but told Sealaska last month it was shelving plans for a larger, permanent gaming hall. Sealaska hopes to recover the loan in full, the report said.

In February 2001, Sealaska invested $40 million in Alaska Native Wireless, a consortium of three regional Native corporations with AT&T Wireless that successfully bid on broadband licenses in major cities. But the government auction resulted in a legal challenge that has yet to be resolved. Still, Sealaska earned $8.8 million in interest on its investment from AT&T, the report said.

The company moved some of its stock market portfolio to the wireless investment, cushioning it from the Wall Street downturn.

''We are confident that Sealaska had rounded a difficult corner at a pivotal point in our history,'' said Chris E. McNeil, president and chief executive.

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