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Esmark Clarifies Debt Status

06/06/2008 - Esmark clarifies the press release recently issued to comply with NASDAQ rules, noting that reports stating that the company had not refinanced its long-term debt are erroneous.

Esmark Inc. provided clarification regarding its press release that was recently issued to comply with NASDAQ rules, noting that reports stating that the company had not refinanced its long-term debt are erroneous.
 
The company refinanced its senior secured term loan with a $110-million dollar facility with Essar Steel Holdings Limited; this facility does not mature until June 1, 2009.
 
Esmark noted that it has extended its short-term revolving credit agreements to no later than
September 30, 2008. As a result, the company received a going-concern qualification related to its Annual Report on Form 10-K. In its 10-K, the company reported that in the event it is unable to refinance or repay such short-term debt, it would consider alternative capital arrangements with third parties or obtaining proceeds from the disposition of assets.
 
Currently, the company has agreed to the material terms of a proposed tender offer and merger with Essar Steel Holdings Limited for the purchase of all of the company’s outstanding common stock for $17.00 per share. Esmark anticipates if it enters into the proposed merger agreement with Essar Steel Holdings, the deal would be consummated prior to September 30, 2008.
 
“Our company has improved its liquidity and our balance sheet is stronger than at any time since I was appointed Chairman of Wheeling-Pittsburgh Corp. on December 1, 2006,” stated Esmark CEO James Bouchard. “We have a sincere appreciation for Essar and the financing they have provided to help strengthen our balance sheet in a time of troubled global credit markets. It is one of many reasons we chose to partner with them.
 
“We expect to file our Form 10-Q for the first quarter next week,” said Bouchard, “and we will announce guidance for the second quarter. Our businesses continue to benefit from the strong market prices which we are currently experiencing.”
 
Esmark Inc. is a vertically integrated steel producer and distributor, combining steel production capabilities through both blast furnace and electric arc furnace technologies with the just-in-time delivery of value-added steel products to a broad customer base concentrated in the Ohio Valley and Midwest regions. Currently headquartered in Wheeling, W.Va., the company is a producer of carbon flat-rolled products for the construction, container, appliance, converter/processor, steel service center, automotive and other markets.
Sheet products include various sheet products such as hot rolled, cold rolled, hot dipped galvanized, electro-galvanized, black plate and electrolytic tinplate.