Geneva Steel LLC Files for Chapter 11

The company reached agreement with its secured lenders today for continued access to cash proceeds through May 1, 2002. Access to cash pursuant to the agreement, which remains subject to Bankruptcy Court approval, is subject to compliance with several conditions, including a budget for cash disbursements. In its filing, the company states that low-priced steel imports have had a significant negative impact on the U.S. steel industry and Geneva's order entry volume and pricing. This has been exacerbated by a weakened domestic economy that has reduced demand for all of the company's steel products, contributing to reduced price realization and shipments of product. Moreover, increases in domestic steel plate production capacity have intensified plate market competition with respect to both price and volume.

This past November the company announced the temporary shutdown of substantially all of its production operations due to continuing adverse steel market conditions, which created liquidity problems.

``The combination of several significant adverse market developments, combined with the requirements of our secured lenders, have caused Geneva's current liquidity crisis and forced us to seek protection under the Bankruptcy Code,'' said Ken Johnsen, president and CEO of Geneva.

At the time Geneva previously emerged from bankruptcy, many steel industry observers expected increases in steel pricing and shipments due primarily to anticipated improvements in the industry's supply situation, including decreased inventory levels and reduced imports. Actual pricing and shipments for Geneva's primary products have, however, been substantially lower than anticipated because of an unexpected weakening in demand and continued import pressure. Adverse market conditions were further exacerbated by the events of September 11th.

Despite current adversities, Geneva is hopeful that the steel market may recover during 2002. A number of domestic steel producers have recently announced price increases for various flat-rolled steel products.

``We are continuing to pursue alternatives for securing the future of the Geneva mill,'' said Joseph Cannon, chairman of Geneva. ``This filing gives us the ability to continue those efforts with the cooperation of our secured lenders.''