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Slater Steel Divisions
Headed for Shutdown

Jan. 9, 2004 — Slater Steel Inc. announced that it will no longer pursue a stand-alone restructuring of its Atlas Stainless Steels and Hamilton Specialty Bar divisions.

Slater cited the unprecedented increase in input costs and insufficient liquidity to fund working capital growth associated with rising nickel, scrap and gas costs as being instrumental in the decision, as well as the inability to obtain labor savings integral to its business plan, the failure to finalize an asset-based refinancing facility on a timely basis, and the rise in the Canadian dollar.

As a result of the combined effect of these issues, Slater will propose to the Ontario Superior Court of Justice on January 9, 2004 the orderly wind-down of the operations of both the Atlas Stainless Steels and Hamilton Specialty Bar facilities. The company said that RBC Capital Markets will continue to seek buyers for each of Atlas Stainless Steels and Hamilton Specialty Bar.

Slater Steel affirmed that it is attempting to complete a going-concern sale of Sorel Forge and that it will continue to operate the facility in the normal course of business. Slater also said that it completed the sale of its Lemont facility this week for gross proceeds of US$9.5 million. The company is also continuing to pursue the sale of Atlas Specialty Steels and Fort Wayne Specialty Alloys.

Slater said that while the exact timing of the wind-down of Atlas Stainless Steels and Hamilton Specialty Bar will be finalized over the coming weeks, the two facilities will seek to operate in the interim to fulfill customer orders. Approximately 430 hourly and salaried positions at Atlas Stainless Steels and approximately 400 hourly and salaried positions at Hamilton Specialty Bar will be impacted.

The company reiterated that it does not expect that shareholders will receive any value through this process.

Slater Steel is a minimill producer of specialty steel products. The Company's minimills are located in Fort Wayne, Ind.; Hamilton and Welland, Ont. and Sorel-Tracy, Que.

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