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Stelco Obtains Extension of Stay Period

May 28, 2004 — Stelco Inc. obtained an Order of the Ontario Superior Court of Justice extending the stay period under its Court-supervised restructuring process until September 30, 2004. While the company's USWA locals opposed the application, the company and the representatives of other stakeholders stated that the extension was essential to providing certainty and stability for all interested parties.

During the Court hearing, representatives of the company and some of its stakeholders expressed concern about the slow pace at which Stelco's restructuring is proceeding. The Court endorsed the record with a request that all parties meet to develop a process by which meaningful discussions can be initiated. Those discussions will be essential if the restructuring is to succeed. The Court requested a progress report by June 2, 2004.

Hap Stephen, Stelco's Chief Restructuring Officer, said, "We've not made the progress we had hoped to have made by this point. That's why we welcome the Court's extension Order coupled with the direction that the stakeholders meet to identify a process for moving forward, and that a progress report be submitted within the week."

The Court also set June 14, 2004 as the date to hear a Motion filed previously by the Government of Ontario seeking direction on the power of the Ministry of Labour to appoint a conciliation officer within the context of the collective bargaining negotiations at Stelco's Lake Erie plant.

In addition, the Court approved the sale of certain assets of Welland Pipe Ltd., one of the Stelco subsidiaries included in the Court-supervised restructuring process. These assets consist of the Spiral Pipe Mill which is located in Welland, Ont. These operations were closed in 2003 due to the lack of market demand in North America for very large diameter pipe. The purchaser plans to relocate the Spiral Pipe Mill assets to India. Additional information in this matter can be found in the Supplemental Fourth Report of the Monitor filed with the Court on May 25, 2004.

Stelco Inc. is a large, diversified steel producer. Stelco is involved in all major segments of the steel industry through its integrated steel business, mini-mills, and manufactured products businesses. Consolidated net sales in 2003 were $2.7 billion.

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