Bankruptcy Court approves USS-National deal
Following the National Steel Board of Directors' decision to select
US Steel as the highest and best bidder in the competitive auction held last week, the Bankruptcy Court approved on April 21, the acquisition of substantially all of National Steel's principal
steelmaking and finishing assets and the
iron ore pellet operations pursuant to the terms and conditions of the asset purchase agreement between the parties.
The Bankruptcy Court also stated that
US Steel will acquire the assets free and clear of all mortgages, liens and charges and that the sale should promptly be completed in order to preserve the viability of National Steel's business as a going concern.
The asset purchase agreement provides for payment of $850 million in cash and $200 million for the assumption of certain liabilities. As per the agreement, at the closing date the net working capital will be at least $450 million. The implementation of the new labour agreement and related actions for
US Steel employees and retirees, at a cost of at least $400 million is expected to have its impact on the 2003 results.
Under the deal,
US Steel has guaranteed not to sell off parts of its coke,
iron ore and transportation assets thus, preserving jobs for union members.
U. S. Steel will acquire the following facilities under the Asset Purchase Agreement:two integrated steel plants, Great Lakes Steel, in Ecorse and River Rouge, Mich., and the Granite City Division in Granite City, Ill.; the Midwest finishing facility in Portage, Ind., near Gary, Ind.; ProCoil Corp. in Canton, Mich.; National Steel Pellet Co.'s
iron ore pellet operations in Keewatin, Minn., and various other subsidiaries and joint-venture interests, including National's share of Double G Coatings, LP in Jackson, Miss.
The transaction is expected to close in the second quarter of 2003.