Esmark Receives Financing Package from Essar Steel Holdings
05/07/2008 - Essar Steel Holdings completes a new $31 million term loan facility to its wholly owned subsidiary Esmark Steel Services Group and refinancing of the existing $79 million Government guaranteed Wheeling-Pittsburgh Steel term loan.
Esmark Inc. announced that Essar Steel Holdings Ltd. has completed a new $31 million term loan facility to its wholly owned subsidiary Esmark Steel Services Group, Inc., and refinancing of the existing $79 million Government-guaranteed Wheeling-Pittsburgh Steel Corp. term loan.
The new maturity date of these term loans is the earlier of 15 days following the consummation of the proposed merger with Essar or June 1, 2009. They will carry an interest rate of LIBOR plus 0.50% and mature on June 1, 2009, except in the event of a "change of control" not involving Essar, in which case the interest rate retroactively increases to LIBOR plus 6.5%.
As a result of the refinancing of the WPSC term loan, the maturity date of the company's revolving credit facilities have been extended to the earlier of 15 days following the consummation of the proposed merger with
Essar or September 30, 2008.
"With the funding of the new term loan and refinancing of the existing WPSC term loan, we not only increase overall company liquidity but now have released the guarantees from the federal government and the State of West Virginia,” stated James P. Bouchard, Chairman and CEO. “As many remember, that $250 million loan in 2003 came at a critical time in Wheeling-Pittsburgh's history and was made possible through the support of the Loan Board and Senators Byrd and Rockefeller.
“We also extend our thanks to Governors Manchin and Strickland as well as Leo Gerard and the United Steelworkers for their active support in enabling this company to expand and compete more effectively in the marketplace,” continued Bouchard. “Finally, we want to thank Essar for becoming a significant and valued stakeholder in our company and its future."
Esmark Inc. is a vertically integrated steel producer and distributor, combining steel production capabilities through both blast furnace and electric arc furnace technologies with 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, WV, the company produces carbon flat-rolled products for a wide range of markets. The company's products include various sheet products such as hot rolled, cold rolled, hot-dip galvanized, electro-galvanized, black plate, and electrolytic tinplate.
Essar Steel Holdings Ltd (ESHL) is a global producer of steel covering India, Canada, USA, the Middle East and Asia. It is a fully integrated flat carbon steel manufacturer—from iron ore to ready-to-market products—supplying customers in the automotive, white goods, construction, engineering and shipbuilding industries. With a current capacity of 8 million tons, Essar's expansion in India, Asia, and North America is expected to result in an increase in capacity to 20 to 25 million tons by 2012.
