AK Steel Seeks to Purchase National Steel Corporation

Middletown, OH - AK Steel Corporation said it submitted a proposal to acquire substantially all of the steelmaking and finishing assets of National Steel Corporation for $1,025 billion, of which $200 million consists of the assumption of certain liabilities.  The remaining $825 million would be payable to National in cash, with $450 million of that amount for net working capital.

National has been operating since March of 2002 as a debtor-in-possession under Chapter 11 of the Bankruptcy Code.  AK Steel said it will seek, in a hearing on January 30th, to have the bankruptcy court declare it the lead bidder int he competitive bidding process for National's assets.  AK Steel said its offer is contingent upon regulatory and bankruptcy court approvals.  In addition, the bid contemplates negotiation of a new contract with the United Steelworkers of America, which represents most of National's hourly employees.  AK Steel said its bid does not include the assumption of pension and other post-retirement employee benefits, which consist primarily of retiree health care liabilities.

"This represents a superior bid for the assets of National Steel and a strategic acquisition for AK Steel," said Richard M. Wardrop, Jr., chairman and CEO of AK Steel.  "The National operations would further diversify AK Steel's rich product mix to include tin mill and construction market products, and presents the opportunity for significant cost-based synergies," Mr. Wardrop said.