Weirton Steel to seek $175 million loan through guarantee program

New York, June 25 - Weirton Steel Corp. said it will seek a $175 million loan under the Emergency Steel Loan Guarantee Program, also known as the "Byrd Bill."

The Weirton, W.Va. company said it will make the application on Monday.

Proceeds would be used to upgrade mill equipment, reduce debt including its $250 million debtor-in-possession financing facility and finance the cost of emerging from bankruptcy.

"If the application is approved, we will work with a financial institution to secure the loan," said John H. Walker, Weirton Steel's president and chief executive officer.

"Since the onset of our bankruptcy filing, our goal has been to reorganize and emerge quickly from the court process. The loan would help us through our daily expenditures as we work through the reorganization process as well as help us build for our future."

Under the program, the federal government will insure between 85% and 95% of the loan if a company fails to meet its repayment obligations.

Weirton Steel said it submitted an initial steel loan application in 2000. However, it stopped the process after the majority of lending institutions set to loan the company $25 million withdrew their commitments.

Weirton Steel filed for bankruptcy on May 19.

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