BAYOU STEEL CORPORATION SIGNS PURCHASE AGREEMENT WITH TENNESSEE VALLEY
LAPLACE, Louisiana, February 3 -- Bayou Steel Corporation (AMEX: BYX)
today reported that it has entered into a purchase agreement with Tennessee
Valley Steel Corporation to acquire substantially all of the assets of
Tennessee Valley for a purchase price of $30.5 million.
Tennessee Valley is currently operating under the protection of Chapter 11
of the United States Bankruptcy Code and the purchase of assets will be
subject to the approval of the bankruptcy court as well as regulatory
agencies, Bayou Steel's obtaining permits necessary to operate the assets, and
certain other conditions.
The bankruptcy court has established bidding procedures to be followed by
any other bidder interested in acquiring the assets. Such procedures require
another bidder to bid at least $1.5 million more than the purchase price
contemplated by the purchase agreement with additional bids required to be in
$500,000 increments. In addition, if another bidder is successful, Tennessee
Valley is required to reimburse Bayou Steel for its expenses (up to $1
million) incurred in connection with its offer to purchase the assets.
Commenting on the pending acquisition, Jerry Pitts, President and Chief
Operating Officer of Bayou Steel, said, "We are pleased to take this important
next step in acquiring the assets of Tennessee Valley. We continue to feel
that the Tennessee Valley assets complement and offer the potential for
further growth of Bayou Steel's existing product lines. We look forward to a
successful consummation of the acquisition."
The parties contemplate that the acquisition will be completed in March
Bayou Steel Corporation operates a steel minimill producing structural steel
products. Located on the Mississippi River in LaPlace, Louisiana, the Company
operates three stocking locations along the inland waterway system near
Pittsburgh, Chicago, and Tulsa, Oklahoma. The common stock of Bayou Steel
Corporation is traded on the American Stock Exchange under the symbol "BYX."
/CONTACT: Richard J. Gonzalez, Vice President, Chief Financial Officer,
Treasurer and Secretary, Bayou Steel, 504-652-4900/