Wheeling-Pittsburgh Steel Corp. has a "substantial agreement'' with its union and "progress is being made'' to resolve pension issues with the federal Pension Benefit Guaranty Corp., company spokesman James Kosowski said.
Published reports in Youngstown where the steelmaker had its plan of reorganization approved by a federal bankruptcy judge stated the company had reached "tentative agreements'' with both the United Steelworkers of America on a new labor contract and the PBGC.
Kosowski, who attended the hearing, said, "I was up there (in Youngstown) and one or two people did use that language.
"I think what we have is a substantial agreement with the union and there is progress being made on the remaining issues."
One of the remaining issues is the matter of the PBGC's move to terminate the pension plans of WHX and its subsidiaries, one of which is Wheeling-Pitt. That matter is currently in the United States District Court for the Southern District of New York.
"As it stands now, the bankruptcy court has approved our plan and they were able to do that because there were substantial majorities of the company's creditors that approved the plan," Kosowski said. "There are still some issues that remain to be completely resolved.
"The most important one is receiving the ($250 million) loan from the Royal Bank of Canada that was guaranteed by the Emergency Steel Loan Guarantee Board. Having the plan approved is obviously one of the major contingencies for us to obtain that loan."
Kosowski said the company is positive that momentum is building and the remaining issues will be resolved by the June 30 ESLGB deadline.
USWA spokesman John Duray said, "We're still working on negotiating an agreement."
PBGC spokesman Jeffrey Speicher said, "As of right now, we have no agreement to announce ... (the report) might have jumped the gun (on the agreement announcement)."
Speicher said that as of Wednesday afternoon, talks between PBGC and Wheeling-Pitt are continuing and that U.S. Bankruptcy Judge William T. Bodoh commented from the bench Wednesday morning that the agreement with PBGC was a prerequisite to Wheeling-Pitt receiving the Emergency Steel Loan Guarantee Board's $250 million aid.
"(Bodoh's) comments were more or less just a reminder," Speicher said. "But as of right now, we don't yet have any agreement to discuss."
The WHX plan has $300 million in assets but more than $443 million in liabilities.
The steelmaker filed for Chapter 11 bankruptcy protection on Nov. 16, 2000.
"In over 18 years in a community that has seen the effects of the demise of many steel companies, I'm delighted to be able to look at one successful case,'' Bodoh said in approving the reorganization plan.
The company's amended plan indicated it would issue new common stock options to employees in exchange for a new labor pact.
The company also said it would create a management stock incentive plan and separate its pension plan from that of its parent, WHX Corp., under terms to be worked out with the union.
Wheeling-Pitt plans to use nearly half the federally guaranteed loan to build a new $110 million electric arc furnace, which would have let it make steel from scrap rather than just raw materials.
The furnace would replace one built in 1903 at the Steubenville mill. It's considered the key component to a desperately needed modernization of the mills and would make the company more attractive for either a merger or an acquisition. Wheeling (WV) News Register