Keystone Consolidated Industries, Inc. filed its First Amended Joint Plan of Reorganization and Disclosure Statement with the U.S. Bankruptcy Court for the Eastern District of Wisconsin in Milwaukee on May 26, 2005.

Keystone previously filed a petition for reorganization under Chapter 11 of the U.S. Bankruptcy Code on February 26, 2004 and an initial Plan of Reorganization on October 5, 2004.

Keystone’s First Amended Joint Plan of Reorganization provides for the assumption of the previously negotiated amendment to the collective bargaining agreement with the Independent Steel Workers Alliance (ISWA), Keystone's largest labor union, as well as reinstatement in full (against reorganized Keystone) of liabilities due to pre-petition secured creditors. As a result of the Plan, all of Keystone's common and preferred stock outstanding at the petition date would be cancelled, and pre-petition unsecured creditors would receive, in aggregate, $5.2 million in cash, a $4.8 million note and 49% of the common stock of reorganized Keystone (the amount of cash and principal amount of the note may increase based on certain events).

Certain operating assets and existing operations of Sherman Wire Co., one of Keystone's pre-petition wholly owned subsidiaries, will be sold at fair market value to Keystone, which will then form a newly created wholly owned subsidiary of reorganized Keystone with those assets and operations. Sherman Wire, and its pre-petition wholly-owned non-operating subsidiaries — J.L. Prescott Co., and DeSoto Environmental Management, Inc. as well as Sherman Wire of Caldwell, Inc., a wholly owned subsidiary of Keystone — will be liquidated and the pre-petition unsecured creditors of these entities will receive their pro-rata share of the respective entity's net liquidation proceeds.

According to Keystone’s reorganization plan, pre-petition unsecured creditors of Keystone's wholly-owned pre-petition subsidiary, FV Steel & Wire Co., would receive cash in an amount equal to their allowed claims. In addition, one of Keystone's Debtor-In-Possession lenders, EWP Financial, LLC (an affiliate of Contran Corp., Keystone's pre-petition majority shareholder) would convert $5 million of its credit facility, certain pre-petition unsecured claims and certain administrative claims into 51% of the common stock of reorganized Keystone.

The Board of Directors of reorganized Keystone will consist of seven individuals, with two directors designated by Contran and two designated by the Official Committee of Unsecured Creditors (OCUC). The remaining three directors shall qualify as independent directors (two of the independent directors shall be appointed by Contran with the OCUC's consent and one shall be appointed by the OCUC with Contran's consent). Further, the Plan of Reorganization assumes Keystone will obtain Bankruptcy Court approval for agreements that have been reached with certain retiree groups that will provide permanent relief by permanently reducing healthcare related payments to these retiree groups from pre-petition levels and such agreement will be assumed by reorganized Keystone.

Confirmation of the Plan of Reorganization remains subject to, among other things, (1) approval of the Disclosure Statement at a hearing on June 24, 2005, (2) obtaining the requisite vote of Keystone's and its subsidiaries' various creditor constituencies, (3) satisfying other confirmation requirements and approval of the Bankruptcy Court and (4) obtaining sufficient exit financing to refinance the balance of Keystone's Debtor-In-Possession loans. Under the terms of a Lock-Up Agreement between Keystone, Contran, the OCUC, the ISWA and certain retirees of Keystone, all parties have agreed to support the First Amended Joint Plan of Reorganization. In addition, Keystone is currently negotiating with two potential lenders interested in providing the necessary financing to exit from the bankruptcy process. No assurances can be given that the negotiations will result in Keystone receiving the necessary financing.

Keystone believes the filing of the First Amended Joint Plan of Reorganization and Disclosure Statement is another major step forward in Keystone's efforts to complete a successful restructuring and Keystone and its advisors will continue to work diligently in an effort to achieve its goal of exiting the bankruptcy process as soon as possible. Keystone currently anticipates a confirmation hearing during the first half of August.

Keystone Consolidated Industries, Inc. is headquartered in Dallas, Texas. The company is a leading manufacturer and distributor of fencing and wire products, wire rod, industrial wire, nails and construction products for the agricultural, industrial, construction, original equipment markets and the retail consumer.