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WCI Steel Restructuring to Improve Competitiveness After $13.4 Million Loss

Warren, OH— WCI Steel, Inc. reported a $13.4 million loss in its second fiscal quarter and that the company was proceeding with a restructuring of its cost and debt structures to adequately fund operations and meet capital expenditure needs.

WCI indicated that any such restructuring would need to feature a reduction in the aggregate principal amount outstanding of its $300 million Senior Secured Notes, a revised labor agreement and a significant cash infusion.

WCI has initiated discussions with certain holders of the Senior Secured Notes and has also held initial meetings with the United Steelworkers of America to discuss revising its existing labor agreement. Furthermore, The Renco Group, Inc., WCI's ultimate parent, has indicated that it is receptive to making the substantial cash infusion that would be an integral part of any successful financial restructuring.

WCI also announced that it has retained Jefferies & Company, Inc. to act as its financial advisor in connection with the restructuring of its Senior Secured Notes.

Higher energy and raw material costs, the continuing slowdown in the U.S. manufacturing economy and increased competition due to the reopening of formerly idled steel capacity have caused product pricing to deteriorate and sales volume to decline from peaks reached in late 2002.

 

 

 

 

 


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