Nov. 15, 2006 — Companhia Siderurgica Nacional (CSN) sent a letter to Wheeling-Pittsburgh Corp.’s Board of Directors containing an enhanced offer to Wheeling-Pittsburgh shareholders as they consider the pending merger of Wheeling-Pittsburgh with CSN's North American assets.

CSN says that as consideration for its 49.5% interest in the combined company, CSN will contribute an incremental $50 million of cash to Wheeling-Pittsburgh. CSN had previously committed the contribution of CSN LLC and a Slab Supply Agreement, with favorable working capital terms and credit. CSN has also committed to an Exclusivity Agreement, which provides Wheeling-Pittsburgh exclusive marketing rights for CSN products in North America, and a Technology Sharing Agreement.

CSN says it will also increase the value of the depositary "B" share to $32 from $30, which CSN will be required to redeem in four years, and will reduce the new company's Convertible Debt to $175 million. CSN would also seek to commit the new company to a rights offering one year after closing of the merger so that non-CSN shareholders would have the option to purchase up to 4.6 million shares (equal to half of shares underlying Convertible Debt) at the Convertible Debt strike price.

The revised offer, which follows continued conversations with major Wheeling-Pittsburgh shareholders, represents $24.41 in present value assuming a 7% yield-to-maturity, which implies a 34% premium to the closing price of $18.24 as of November 13, 2006. As an expression of its confidence in the benefits of the merger, CSN will take the risk that if it is unable to resolve any successorship issues with the USW, it will commit to sell shares in order to remain below 50% of ownership while purchasing the B shares.

The revised offer also retains the previously announced merger structure, which provides shareholders freedom of choice to take either "B" share cash or equity upside, which is in response to significant shareholder interest in continuing its equity participation. Current Wheeling-Pittsburg shareholders will also have the ability to maintain control equal to their 50.5% through the combined company's merger consideration and rights offering.

John Hastings, Managing Director of RBC Dain Rauscher, the agent bank for Wheeling-Pittsburgh's federally guaranteed loan said, "We welcome improvements to Wheeling-Pittsburgh's balance sheet, and enhancing the credit worthiness of Wheeling-Pittsburgh will be viewed as a positive by the banking group. The capital contribution contemplated by this revised proposal appears to meet those goals."

Under the original Agreement and Plan of Merger previously announced on October 24, 2006, the parties agreed to merge Wheeling-Pittsburgh with a subsidiary of CSN, as a result of which the Wheeling-Pittsburgh shareholders are to receive 50.5% of the combined company and CSN the remaining 49.5%. CSN had also agreed to contribute $225 million in cash through the issuance by the combined company of a convertible debt security.

Under a Nov. 6 revision to the offer, shareholders could elect to receive, for each share of Wheeling-Pittsburgh common stock:

• A share of common stock in the new combined company (an A Share);
• A Depositary Share, which requires CSN to pay cash four years after the merger (a B Share); or
• A combination of A and B Shares.

The total number of B Shares would be limited to 50% of the total of A and B shares issued in the merger. The B shares will be listed for trading on the NASDAQ.

CSN and the company are in discussions to finalize the enhancement, subject to an amendment of the existing definitive agreements.

CSN is a leading global steel producer with operations in Latin America, North America, and Europe. CSN is a fully integrated steel producer, the largest coated steel producer in Brazil, with current capacity of 21.5 million tons of iron ore, 5.6 million tons of crude steel, 5.1 million tons of rolled products and 2.9 million tons of coated steel capacity. CSN is an integrated steel producer that uses its own sources of iron ore and electrical power supply. In addition, CSN controls logistics assets - ports and railways - that enable an extremely cost efficient and reliable loading and unloading of slabs and ore for deep sea vessels.

CSN has had operations in the United States since 2001 through its wholly-owned subsidiary CSN LLC (formerly known as Heartland Steel) located at Terre Haute, Ind. CSN LLC has an annual production capacity of 1 million tons of cold-rolled, galvanized and hot rolled products.