Keystone Consolidated expects to emerge from Chapter 11 by month's end

By Caroline Salls

Pittsburgh, Aug. 12 - Keystone Consolidated Industries, Inc. expects to emerge from Chapter 11 bankruptcy by the end of August following confirmation of its plan of reorganization Wednesday, according to a company news release.

The proposed plan of reorganization gives all of the reorganized company's stock to unsecured and debtor-in-possession creditors.

Sherman Wire Co.'s assets and operations will be sold to Keystone and it will operate as a wholly owned Keystone subsidiary.

The plan also calls for the liquidation of its pre-bankruptcy subsidiaries Sherman Wire of Caldwell, Inc., J.L. Prescott Co. and DeSoto Environmental Management Inc. and the distribution of proceeds to their unsecured creditors.

Under the plan of reorganization:

*Holders of secured claims will have their claims reinstated, giving them 100% recovery;

*Holders of general unsecured claims will receive $5.2 million in cash, a $4.8 million secured note and/or 49% of the common stock of the reorganized company;

*Unsecured creditors of FV Steel & Wire Co. will be paid in full in cash;

*Holders of Congress Financial Corp. DIP claims will get 100% recovery in cash;

*EWP Financial, LLC, an affiliate of Contran Corp., Keystone's pre-petition majority shareholder, will, in its role as one of Keystone's DIP lenders, convert $5 million of its credit facility, certain pre-petition unsecured claims and certain administrative claims into 51% of the common stock of reorganized Keystone;

*Holders of old preferred stock, old common stock and other securities claims will get nothing.

The company has a commitment for an $80 million exit facility from administrative agent Wachovia Capital Finance Corp., with Wachovia Capital Markets Inc. as lead arranger and bookrunner.

Keystone, a Dallas-based fencing and wiring company, filed for bankruptcy on Feb. 26, 2004 with the U.S. Bankruptcy Court for the Eastern District of Wisconsin. Its Chapter 11 case number is 04-22422.

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