Weirton Steel noteholders hire Correnti to draw up bid for company

New York, March 11 - Weirton Steel Corp.'s informal committee of senior secured noteholders said it hired retained International Steel Associates, Inc. and its principal John Correnti, former chief executive officer of Nucor Steel and chief executive officer of Birmingham Steel, to put together a bid for the company.

The Weirton, W.Va. steel company is currently up for a sale with bids due by April 6 with an auction to follow on April 12. Qualifying bids start at $261.24 million.

W.L. Ross & Co.'s International Steel Group is the stalking horse bidder with an offer of $255 million.

But the noteholders pointed out that the bankruptcy court judge lowered the break-up fee payable to International Steel is not the winner to $4.74 million from $6.375 million. International Steel will also receive up to $500,000 in expenses.

The U.S. Bankruptcy court for the Northern District of West Virginia also ruled that the indenture trustee for the senior secured notes may credit bid for Weirton.

Furthermore, the noteholders said that on Monday Weirton's primary labor union, the Independent Steelworkers Union, confirmed Court that it is prepared to negotiate with all potential bidders for Weirton's assets.

Announcing their plans, the noteholders committee said it "believes the recent increase in worldwide steel prices has provided an immediate opportunity for improvement in the company's liquidity situation, and, at the same time, brightened the company's long-term prospects, particularly in view of the substantial reductions that can be made to the company's cost structure.

"Accordingly, the committee also feels that it will be able to submit an offer, which will better serve Weirton and its creditors than ISG's bid."

Under their proposal, the company would remain independent and based in Weirton, W.Va.

Before being lowered, the break-up fee drew several objections on the grounds that it would discourage other bids for the company.

A hearing on the results of the auction will be held by the bankruptcy court on April 14.

Weirton's Chapter 11 case number is 03-01802. It filed for bankruptcy on May 19, 2003.

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