National Steel confirms receipt of final bids

National Steel confirms receipt of final bids

Under the National Steel takeover battle, deadline given to AK Steel to reach an agreement with the workers union United Steel workers of America (USWA) expired today, with failure of obtaining any agreement between the parties. AK Steel says reaching a new labour agreement has not been possible as it was not economically feasible to profitably operate National Steel. Meanwhile National Steel confirmed receipt of the bids today. AK Steel reaffirms its offer of $1.125 billion, covering of $925 million in cash and $200 million for the assumption of certain liabilities, for acquiring substantially all assets of National Steel. Under these circumstances the offer is conditional on the rejection of all of National Steel's collective bargaining agreements with USWA and termination of all retiree benefits in accordance with Sections 1113 and 1114 of the Bankruptcy Code. Industry experts state that a possibility still exists for AK Steel to win the deal due to its higher offer, despite the absence of an agreement with the union. US Steel's revised bid covers substantially all assets of National Steel including principal steelmaking and finishing assets and iron ore pellet operations against $975 million, consisting of $775 million in cash and $200 million for assumption of certain liabilities. US Steel also has reached a tentative agreement with USWA. The auction for National Steel is scheduled for April 16i 2003 and thereafter the bankruptcy court will hold a hearing on April 21, 2003 for approval of the sale. Furthermore, National Steel also announced that bankruptcy court approved an extension of the period during which the company has the exclusive right to file a plan of reorganisation in its Chapter 11 case until April 30, 2003.