Rouge Industries Announces Court Approval of Severstal as Stalking Horse
04 December 2003 - 9:30AM
PR Newswire (US)
Rouge Industries Announces Court Approval of Severstal as Stalking
Horse DEARBORN, Mich., Dec. 3 /PRNewswire-FirstCall/ -- Rouge
Industries, Inc. (the "Company") announced today that the United
States Bankruptcy Court for the District of Delaware in Wilmington
(the "Court") approved the break-up fee and bidding procedures
related to the Amended and Restated Asset Purchase Agreement with
Severstal. On November 24, 2003, the Company, certain of the
Company's subsidiaries, namely Rouge Steel Company and QS Steel
Inc., and Severstal entered into an Amended and Restated Asset
Purchase Agreement (the "APA") for the sale of substantially all of
the Company's assets, including the business of Rouge Steel
Company, the Company's primary operating subsidiary. The Court's
ruling gives Severstal "stalking horse," or priority status, which
generally allows Severstal to collect a break-up fee should the
Company agree to sell its assets to another party prior to
termination of the APA with Severstal. The APA between the Company
and Severstal, valued at approximately $215 million, is subject to
a number of conditions, including termination or expiration of the
waiting period under the Hart-Scott-Rodino Antitrust Improvements
Act, obtaining certain contractual consents, approvals and
authorizations, and the execution and ratification of a new
collective bargaining agreement by the International Union, United
Automobile, Aerospace and Agricultural Implement Workers of
America, UAW. The APA 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
Code. Judge Mary F. Walrath of the Court also approved an expedited
bid period that will require competing bids to be submitted by
December 18, 2003, with the auction to be held on December 19,
2003. The final sale hearing date is scheduled for December 22,
2003. The Company expects to close the sale transaction by the end
of January 2004. On October 23, 2003, the Company, including its
subsidiaries Rouge Steel Company, QS Steel Inc., and Eveleth
Taconite Company, filed voluntary petitions for protection under
Chapter 11 of the U.S. Bankruptcy Code in the Court. Rouge Steel
Company continues to produce and ship steel products and serve its
customers. Safe Harbor Statement This press release contains
forward-looking information about the Company. A number of factors
could cause the Company's actual results to differ materially from
those anticipated, including changes in the general economic or
political climate, the supply of or demand for and the pricing of
steel products in the Company's markets, plant operating
performance, product quality, potential environmental liabilities,
the availability and prices of raw materials, supplies, utilities
and other services and items required by the Company's operations,
the level of imports and import prices in the Company's markets,
the availability of sufficient cash to support the Company's
operations and higher than expected costs. For further information
on these and other factors that could impact the Company and the
statements contained herein, reference should be made to the
Company's filings with the Securities and Exchange Commission.
DATASOURCE: Rouge Industries, Inc. CONTACT: Phyllis J. Holmes,
analysts, +1-313-323-2765, or William E. Hornberger, media,
+1-313-323-1850, both of Rouge Industries, Inc. Web site:
http://www.rougeindustries.com/
Copyright