Court Gives US Steel OK for National Steel

United States Steel Corporation confirmed that U.S. Bankruptcy Court in Chicago has approved its purchase of National Steel Corp. 's integrated steel assets. U.S. Steel also announced that it has signed a definitive Asset Purchase Agreement with National, which was approved by the bankruptcy court April 21.

 "We are extremely pleased that we have emerged as the successful bidder for National's world-class assets," said Thomas Usher, U. S. Steel chairman and CEO. "The acquisition of these assets will be a significant step forward in our strategy to grow profitably and to strengthen our position as a leading global provider of high value-added steel products. The Bush Administration's steel trade program has been key in allowing the American industry to consolidate.

"Having bankruptcy court approval, we can now direct our full attention toward closing the transaction as soon as possible and ensuring a seamless integration of our domestic businesses. We look forward to welcoming the skilled workforce of National as we begin this new era in our company's history. We also thank the many customers, suppliers, employees and community leaders who supported our acquisition."

Under the terms of the agreement, U. S. Steel will purchase substantially all of National's steelmaking and steel finishing assets and the assets of National Steel Pellet Company for $1.05 billion, including $850 million in cash and the assumption of $200 million of National's lease and contractual obligations. The agreement provides that net working capital will be at least $450 million on the closing date. U. S. Steel intends to fund the cash component of the acquisition through a combination of existing cash balances, credit facilities, and the issuance of debt securities. U. S. Steel will not assume any liabilities related to National's pension plans, which have been terminated by the Pension Benefit Guaranty Corporation, nor will it assume National's defined benefit retiree medical and life insurance plans and, consistent with the U. S. Bankruptcy Code, the transaction will exclude all liabilities except as have been agreed to by U. S. Steel. The transaction is expected to close later in the second quarter and is subject to customary closing conditions.

Under the Asset Purchase Agreement with National, U. S. Steel will acquire facilities at National's two integrated steel plants, Great Lakes Steel, in Ecorse and River Rouge, Mich., and the Granite City Division in Granite City, Ill.; the Midwest finishing facility in Portage, Ind., near Gary, Ind.; ProCoil Corporation in Canton, Mich.; National Steel Pellet Company's iron ore pellet operations in Keewatin, Minn., and various other subsidiaries; and joint-venture interests, including National's share of Double G Coatings, L.P. in Jackson, Miss.