Russian Steel Company Acquiring Rouge Industries

Rouge Industries, Inc. has reached an agreement to sell substantially all of its assets to Severstal, Russia’s second largest steel producer.

Rouge, as well as its wholly owned subsidiaries, Rouge Steel Co., QS Steel Inc., and Eveleth Taconite Co., filed Chapter 11 bankruptcy protection. During the bankruptcy process, Rouge will continue to operate.

The company also announced, that subject to Bankruptcy Court approval, it has secured a commitment for a $150 million debtor-in-possession credit facility.

The letter of intent to purchase the company's assets is subject to Bankruptcy Court approval. Rouge intends to file a motion in the Bankruptcy Court to formalize a procedure for reviewing this and other purchase offers.

Carl L. Valdiserri, chairman and chief executive officer of Rouge Industries, said the company would continue operations and fulfill customer obligations during the reorganization process and that management had sought to sell the assets of Rouge to provide maximum consideration for the Company's creditors while securing the future viability of the business and the jobs of Rouge employees.

For Severstal, the acquisition of Rouge represents its first investment in the United States steel industry and the opportunity to expand its global steel making presence.