Second Request Issued Relating to U.S. Steel
Mishawaka, IN - National Steel Corporation announced
that the U.S. Bankruptcy Court for the Northern District of Illinois approved
the breakup fee and bidding procedures related to the Asset Purchase Agreement
(APA) with AK Steel Corporation. On January 30, 2003, AK Steel and National
Steel Corporation entered into an Asset Purchase Agreement for National
Steel's principal steel making and finishing assets and iron ore pellet
operations for $1.125 billion, consisting of $925 million in cash and
the assumption of certain liabilities approximating $200 million.
The court's ruling gives AK Steel "stalking horse", or priority
status, which generally allows AK Steel to collect a breakup fee should
National agree to sell its assets to another party prior to termination
of the Asset Purchase Agreement with AK Steel.
The asset purchase agreement between National and AK Steel is subject
to a number of conditions, including bankruptcy court approval, termination
or expiration of the waiting period under the Hart-Scott-Rodino Antitrust
Improvements Act and the execution and ratification of a new collective
bargaining agreement with the United Steelworkers of America for those
National Steel employees who will become employees of AK Steel. The asset
purchase agreement is subject to higher and better offers submitted in
accordance with the procedures approved by the Bankruptcy Court under
Sections 363 and 365 of the U. S. Bankruptcy Court.
National Steel's Chairman and Chief Executive Mineo Shimura stated, "The
court's ruling today allows us to move closer to a resolution of our Chapter
11 reorganization proceeding. However, we will continue to work on our
plans to emerge from Chapter 11 as a stand alone entity in the event that
the transaction with AK Steel is not consummated."
Separately, National Steel announced that it has received from the U.S.
Department of Justice a Request for Additional Information (Second Request)
under the Hart-Scott-Rodino Antitrust Improvements Act pertaining to the
previously announced proposal by United States Steel Corporation to purchase
substantially all of National Steel's principal steelmaking and finishing
assets. The Second Request, which was expected, resulted from the Hart-Scott-Rodino
Antitrust Improve-ments Act filing made by National Steel and U.S. Steel
in January. The companies intend to cooperate fully.