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September 24, 2003 WEIRTON, W.VA. – Weirton Steel Corp. officials today said the State of West Virginia again has come to the aid of the steelmaker, this time to benefit the company’s financial flexibility. West Virginia’s Economic Development Authority (EDA), a division of the state’s Economic Development Department, recently modified a lease agreement enabling the company to defer payments to the end of this year. The action was taken to help the company through its bankruptcy reorganization plan. "From Governor Wise to the Legislature to the various state agencies, the state has supported the steel industry, especially Weirton Steel. In recent years, they have supported our efforts to combat illegal steel imports, manage our cost-containment program and work to emerge from bankruptcy," said company Chief Executive Officer D. Leonard Wise. "Recent assistance from the EDA and its executive director, David Warner, helps our efforts to reorganize the company. We thank the state for its cooperation and commitment for its current and past support." In July 2001, the EDA invested $8 million to purchase Weirton Steel’s automated control system that monitors the plant’s utilities. The EDA then leased the equipment to Weirton Steel for $633,000 per quarter and arranged to have the company regain possession of the system when it paid off the lease. However, when the company entered Chapter 11 bankruptcy protection on May 19, the EDA relaxed the payment plan. The company was scheduled to make payments on June 30 and Sept. 30, but the bankruptcy prompted the EDA to defer the payments until the end of this year. Before entering into the agreement with the state, Weirton Steel had been leasing the equipment through a leasing company. Regular payments were included as part of the lease agreement but tied up the steelmaker’s $8 million credit line with a bank. The EDA bought the equipment and leased it to Weirton Steel at a 6.5 percent rate, but it did not require a letter of credit from the company. This transaction freed the company’s credit line and helped it further improve its financial flexibility. Weirton Steel is West Virginia’s largest industrial employer. It provides more than $18 million in federal, state and local taxes. The company also is the fifth largest U.S. integrated steelmaker and the nation’s second largest producer of tin mill products.
Weirton Steel Corp. Media Contact:
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