Rouge Agrees to Purchase Deal with Severstal

Rouge Industries, Inc. has signed an Asset Purchase Agreement with Severstal for the sale of substantially all of the assets of Rouge Industries. The transaction, expected to be completed by the end of January, 2004, is valued at approximately $215 million.

The purchase agreement is subject to the approval of the United States Bankruptcy Court for the District of Delaware in Wilmington, and is subject to higher and better offers submitted in accordance with procedures to be approved by the Court under Sections 105, 363 and 365 of the U.S. Bankruptcy Code. Rouge Industries filed a motion with the Court recommending "stalking horse" status for Severstal. The court scheduled a hearing for Nov. 24 to consider the approval of bidding procedures granting Severstal priority "stalking horse" status.

According to Carl Valdiserri, chairman and CEO of Rouge Industries, "Throughout our deliberations in making our recommendation to the U.S. Bankruptcy Court, the interests of the company's creditors have been paramount. We have also considered other factors that would bear on the final outcome of the process including a prospective buyers' ability to satisfy their conditions to closing, the financial stability of the company during the period required to close the transaction and the impact on other stakeholders in this process. We will also request that the Court set an expedited bidding period which we believe is in the best interest of all the Company's stakeholders."

On October 23, 2003, Rouge Industries, Inc. and its primary 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 United States Bankruptcy Court for the District of Delaware. Rouge Steel Company continues to operate its steelmaking facilities and ship steel products to its customers.

Rouge previously was the steelmaking unit for Ford Motor until 1989.