International Steel Group to Purchase Weirton Steel Assets
02/18/2004 -
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International Steel
Group
to Purchase Weirton Steel Assets
Feb. 18, 2004 — International Steel Group Inc. has entered into a purchase agreement to acquire substantially all assets of Weirton Steel Corp.
"Our goal has been to secure the best possible solution for all of our stakeholders and to maintain a steel operation in Weirton,” comments D. Leonard Wise, Weirton Steel CEO. “We believe ISG provides the answer. Under ISG, Weirton Steel should be able to complete more effectively in the world market. Given Weirton Steel's bankruptcy, we are fortunate to have the opportunity to join ISG." Wise said that while the pending sale is positive news for the Upper Ohio Valley, it occurs at the same time as an unfortunate event for Weirton Steels' retirees. "Weirton Steel recognizes the significant contribution our retirees have made throughout their years of dedicated service. Obviously, we are saddened to report that we will no longer be able to pay for retiree health care and life insurance programs. This decision was extremely difficult, but unavoidable. We sincerely regret the series of circumstances that led to this situation," Wise noted. "We understand our retirees' expectations. Those expectations were created at a time when health care costs were dramatically lower and our company's financial foundation was much stronger. Unfortunately, those conditions no longer exist. But unlike many other companies that terminated retiree insurance programs upon declaring bankruptcy, at least we were able to provide these programs during the nine months we have been in bankruptcy." |
ISG's proposal, valued at approximately $225 million, includes assumption of liabilities and is subject to customary closing adjustments. The ISG and Weirton Steel Boards of Directors have approved the agreement, which is subject to bankruptcy court approval and other conditions. ISG expects the sale to be completed in the second quarter of this year.
"We look forward to continuing the proud tradition of steelmaking in the Ohio Valley," said Rodney B. Mott, ISG's President and CEO. "We are pleased to have the support of the Independent Steelworkers Union and are committed to creating a close and mutually beneficial working partnership with them."
Weirton Steel will file details of the asset purchase agreement with a bankruptcy court within the next several days. At that time, the company also will request the judge to determine the bidding procedures applicable to a sale under Section 363 of the Federal Bankruptcy Code.
"We will continue normal operations throughout this process. The sale is good news for Weirton Steel, our customers and the local communities," said D. Leonard Wise, Weirton Steel CEO.
"Our goal has been to secure the best possible solution for all of our stakeholders and to maintain a steel operation in Weirton. We believe ISG provides the answer. Under ISG, Weirton Steel should be able to complete more effectively in the world market. Given Weirton Steel's bankruptcy, we are fortunate to have the opportunity to join ISG."
Weirton Steel is the fifth-largest U.S. integrated steel company and the nation's second-largest producer of tin mill products. Weirton Steel filed a voluntary petition for reorganization under Chapter 11 of the U.S. Bankruptcy Code on May 19, 2003. The petition was filed in the U.S. Bankruptcy Court for the Northern District of West Virginia.
International Steel Group Inc. is the second-largest integrated steel producer in North America, based on annual steelmaking capacity of over 18 million tons of steel products. It ships a variety of steel products from 11 major steel producing and finishing facilities in six states, including hot-rolled, cold-rolled and coated sheets, tin mill products, carbon and alloy plates, rail products and semi-finished shapes serving the automotive, construction, pipe and tube, appliance, container and machinery markets.
