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WEIRTON, W.VA. – Weirton Steel Corp. (OTCBB: WRTLQ) today filed its plan of reorganization to emerge from bankruptcy as a stand-alone company by Dec. 31. The plan is subject to approval by the U.S. Bankruptcy Court for the Northern District of West Virginia in Wheeling and a vote of creditors including noteholders, the Independent Steelworkers Union, Independent Guard Union, the Pension Benefit Guaranty Corp. and other stakeholders. The stand-alone plan calls for an independent Weirton Steel to continue to operate its ironmaking, steelmaking and finishing operations. The company expects to operate with a substantially lower cost structure by addressing legacy and manpower issues as wells as raw material costs. "While today’s court filing is the first step in Weirton Steel’s emergence from bankruptcy, it demonstrates the company’s strength and determination to remain a viable supplier of quality tin plate and other steel products," said D. Leonard Wise, Weirton Steel chief executive officer. Emergence financing guaranteed under the Emergency Steel Loan Guarantee (ESLG) Program is central to the plan’s success. The loan guarantee board is expected to act on the company’s application later this month. "Because of the time constraints for obtaining and closing a loan through the ESLG Program, it was necessary to file the plan without first negotiating its terms with our creditors. As such, we expect the plan to be modified before it is presented to the bankruptcy court for a final confirmation hearing in early December," Wise noted. Chicago-based Fleet Capital Corp. will provide $175 million in emergence financing if the loan board approves the plan – subject to the satisfaction of conditions set forth in the plan. Under the ESLG Program, the government will guarantee 85 to 95 percent of the term loan. Loan proceeds will be used to fund the costs to emerge from bankruptcy, upgrade mill equipment and complete a new polymer tin coating operation. "The support of Weirton’s ESLG Program application by our senior lenders and, in particular, Fleet Capital has been nothing short of extraordinary," said Mark E. Kaplan, Weirton Steel president and chief financial officer. "Timing is everything. We first must confirm a reorganization plan prior to closing on the emergence financing. We believe the ESLG Program provides us the best opportunity to finance our emergence from bankruptcy and enable us to become more competitive. The program ends Dec. 31," Kaplan explained. The plan also states that it is possible that Weirton Steel’s assets could be sold to a strategic or financial investor. Wise added, "The company continues to evaluate its options. Our objective remains clear – to maximize the value for our stakeholders including our employees and customers." Weirton Steel, with 3,500 employees, filed a voluntary petition for bankruptcy protection on May 19. The company is the second largest producer of tin mill products. Its other products include hot-rolled, cold-rolled and galvanized steel sheet.
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