WEIRTON, W.Va. (AP) -- Bankrupt Weirton Steel Corp. has accepted a $255 million buyout offer from Ohio's International Steel Group Inc., an industry giant built from the remnants of other down-and-out companies.þþIf approved, the long-anticipated purchase would expand the nation's No. 2 integrated steelmaker to include Weirton's tin mill, one of the largest in the nation.þþThe deal also would end a labor legacy at the West Virginia plant, once the largest American company owned 100 percent by its workers.þþStill, Weirton Chief Executive Officer D. Leonard Wise called the merger good news for the company, its customers and the community.þþ``Our goal has been to secure the best possible solution for all of our stakeholders and to maintain a steel operation in Weirton,'' Wise said in a statement released early Wednesday morning. ``We believe ISG provides the answer.''þþThe $255 million offer included cash and the assumption of Weirton Steel's liabilities. Company spokesman Gregg Warren declined to release details of the offer, saying they would be included in the bankruptcy court filing.þþWeirton Steel, the nation's fifth-largest integrated producer and No. 2 producer of tin, sought Chapter 11 protection in May 2003 after losing money for five years.þþIt has struggled ever since to emerge, unable to appease creditors or strike a new labor agreement with its 2,700-member Independent Steelworkers Union.þþThe company was further hurt in recent weeks by the ongoing global shortage of coke, the fuel used for its two blast furnaces. As its supply ran out, Weirton began closing some rolling and finishing operations, then idled one furnace. That resulted in some 800 layoffs.þþAfter Weirton files the details of ISG's offer with the U.S. Bankruptcy Court in Wheeling in the next few days, a judge will solicit other bids. It may take as long as 45 days to finalize the sale.þþWhile the buyout would keep steelmaking alive in Weirton, it is bad news for some 10,000 retirees, dependents and surviving spouses who had received free insurance coverage.þþ``Obviously, we are saddened to report that we will no longer be able to pay for retiree health care and life insurance programs,'' Wise said. ``This decision was extremely difficult but unavoidable.''þþIndependent Steelworkers Union President Mark Glyptis said the union negotiated a deal with ISG in which the company would provide more than $3.7 million in ``seed money'' for a new Voluntary Employee Beneficiary Association to provide health insurance to retirees. He gave no details on if the retirees would have to pay premiums.þþWeirton's strategy for remaining a stand-alone company had called for the creation of a VEPA that did require retirees to pay premiums. But many retirees have complained they accepted lower wages in their younger years in exchange for the promise of free, lifelong health care. Wise said those promises were made at a time when health costs were lower and the company's fiscal position was stronger.þþThe deal ``doesn't come without pain,'' Glyptis said. ``There will be pain associated with it ... but Weirton could not survive as a stand-alone in the long term.''þþThe VEPA plan would not cover the 2,000 non-union retirees, including former management employees.þþThe buyout would also include 300 layoffs in addition to the 950 Weirton Steel planned to cut as part of its bankruptcy reorganization plan, Glyptis said.þþISG was created in 2002 when New York buyout firm WL Ross & Co. purchased the remnants of bankrupt LTV Corp., then acquired Bethlehem Steel and Acme Metals. It now stands second in size only to Pittsburgh-based U.S. Steel Corp.þþISG can cast more than 18 million tons of steel a year and has created a new model for efficiency, dramatically slashing the number of workers and their wages to cut production costs.þþIn December, it sold 16.5 million shares of stock in an initial public offering, raising $462 million.þþThe company has plants in 10 states, including facilities in Cleveland and East Chicago, Ind., that make flat-rolled steel. It also runs a finishing plant in Hennepin, Ill., and a coke plant in Warren, Ohio. þþ
Source: NY Times
