Severstal, Wheeling-Pitt Agree to Joint Venture

Wheeling-Pittsburgh Steel Corp. and Severstal North America, Inc. signed a non-binding letter of intent to create a joint venture involving Wheeling-Pitts’s coke plant in Follansbee, WV. The letter of intent calls for entering into a definitive joint venture closing on or before March 31, 2005.

At the closing of the  venture agreement, Wheeling- Pitt will contribute the assets of the plant to the joint venture and Severstal will contribute most of the capital to rebuild the facility over the next four years. Severstal is expected to commit $140 million to the joint venture over four years, which will be used for such coke plant capital improvements. Also, Severstal would make a $20 million payment directly to Wheeling-Pitt at the closing of the joint venture.

The coke plant consists of one six-meter battery and three three-meter batteries. Total cokemaking capacity is expected to be in excess of one million tons per year after completion of the capital improvements. The joint venture will produce coke for the benefit of Wheeling-Pittsburgh Steel and Severstal.