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Weirton Steel To Seek $175 Million Through Emergency Steel Loan Guarantee Program For Immediate Release WEIRTON, W.VA. – As a component of its reorganization plan, Weirton Steel Corp. today announced it will seek a $175 million loan by applying for participation in the Emergency Steel Loan Guarantee Program, also known as the "Byrd Bill." Company Treasurer David Bordo will submit an application Monday to the loan board in Washington, D.C. "If the application is approved, we will work with a financial institution to secure the loan. Since the onset of our bankruptcy filing, our goal has been to reorganize and emerge quickly from the court process. The loan would help us through our daily expenditures as we work through the reorganization process as well as help us build for our future," said John H. Walker, Weirton Steel president and chief executive officer. Last month, the company filed a voluntary petition to reorganize under Chapter 11 bankruptcy protection. Walker said if the loan request is granted, the funding will be used to: · Upgrade mill equipment: Given its financial condition before its bankruptcy filing and the need to conserve cash during the reorganization, the company conducted capital improvements at modest levels. The loan will help the company expand its program. · Reduce debt: The loan will enable the company to reduce and refinance its $250 million debtor-in-possession financing facility. · Finance the cost of emerging from bankruptcy: The loan will provide financing for the additional cost incurred to emerge from bankruptcy. In 1999, U.S. Sen. Robert C. Byrd, D-W.Va., succeeded in passing the loan guarantee program by including it as an amendment to an appropriations bill. The program ensures lending institutions that the federal government will insure between 85 to 95 percent of the loan if a company fails to meet its repayment obligations. The loan program resulted from the steel import crisis that lasted from 1998 through early 2002.
several months. It’s a difficult, time-consuming process that requires us to demonstrate we can fulfill the criteria for participating in the program, especially in terms of repaying the loan," Walker said. "The Byrd Bill program is set to expire at the end of this year. We are concerned about the loan committee meeting and making its decision before that time. Therefore, we’ve been working closely with the board to expedite a decision and we are holding discussions with the Bush administration to have the program continue beyond the end of this year." Weirton Steel submitted an initial steel loan application in 2000. However, it stopped the process after the majority of lending institutions set to loan the company $25 million withdrew their commitments. "We thank Sen. Byrd for his foresight in developing this program, especially since the recent steel import crisis devastated so many domestic steelmakers including the 36 others that filed bankruptcy before we did. He truly understands the need for a strong domestic steel industry, and his actions make it possible for steel producers to get back on their feet," Walker commented. On May 19, Weirton Steel filed to voluntary reorganize the company in federal bankruptcy court in Wheeling, W.Va. The company cited weak steel selling prices, overwhelming post-retirement obligations, burdensome vendor contracts, the lingering effects of steel imports, the effects of depressed market conditions and competitors’ low-cost operating methods for its decision to file. Weirton Steel, which employs 3,500 people, is the sixth largest U.S. integrated steel company and produces hot rolled, cold rolled, galvanized and tinplate. Weirton Steel Corp. Media Contact:
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