========================================================================== WHEELING-PITTSBURGH BANKRUPTCY NEWS Issue Number 1 -------------------------------------------------------------------------- Copyright 2000 (ISSN XXXX-XXXX) November 20, 2000 -------------------------------------------------------------------------- Bankruptcy Creditors' Service, Inc., Phone 609-392-0900 FAX 609-392-0040 -------------------------------------------------------------------------- WHEELING-PITTSBURGH BANKRUPTCY NEWS is published by Bankruptcy Creditors' Service, Inc., 24 Perdicaris Place, Trenton, New Jersey 08618, on an ad hoc basis (generally every 10 to 20 days) as significant activity occurs in the Debtors' cases. Each issue is prepared by Peter A. Chapman, Editor. Subscription rate is US$45 per issue. Reproduction of WHEELING-PITTSBURGH BANKRUPTCY NEWS by any means is prohibited without the permission of the publisher. ========================================================================== IN THIS ISSUE ------------- [00000] HOW TO ORDER A SUBSCRIPTION TO WHEELING-PITTSBURGH BANKRUPTCY NEWS [00001] BACKGROUND & DESCRIPTION OF WHEELING-PITTSBURGH CORPORATION [00002] COMPANY'S CONSOLIDATED BALANCE SHEET AS OF JUNE 30, 2000 [00003] COMPANY'S PRESS RELEASE CONCERNING CHAPTER 11 FILING [00004] STATEMENT BY WHX CONCERNING WHEELING-PITTSBURGH'S CHAPTER 11 CASES [00005] WHEELING-PITTSBURGH COMPANIES' CHAPTER 11 DATABASE [00006] LIST OF WHEELING-PITTSBURGH'S 30 LARGEST UNSECURED CREDITORS [00007] DEBTORS' MOTION FOR APPROVAL OF $290,000,000 DIP FINANCING PACT KEY DATE CALENDAR ----------------- 11/16/00 Voluntary Petition Date 12/01/00 Deadline for filing Schedules of Assets and Liabilities 12/01/00 Deadline for filing Statement of Financial Affairs 12/01/00 Deadline for filing List of Leases and Executory Contracts 12/07/00 Deadline to provide Utility Companies with adequate assurance 01/15/01 Deadline to assume or reject leases and executory contracts 02/14/01 Deadline for removal of actions pursuant to F.R.B.P. 9027 03/16/01 Expiration of Debtors' Exclusive Period to propose a Plan 05/15/01 Expiration of Debtors' Exclusive Solicitation Period 11/__/02 Expiration of DIP Financing Facility 11/15/02 Deadline for Debtors' Commencement of Avoidance Actions Organizational Meeting with UST to form Official Committees Bar Date for filing Proofs of Claim First Meeting of Creditors pursuant to 11 U.S.C. 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Name: ---------------------------------------------- Firm: ---------------------------------------------- Address: ---------------------------------------------- ---------------------------------------------- Phone: ---------------------------------------------- Fax: ---------------------------------------------- E-Mail: ---------------------------------------------- -------------------------------------------------------------------------- [00001] BACKGROUND & DESCRIPTION OF WHEELING-PITTSBURGH CORPORATION -------------------------------------------------------------------------- Wheeling-Pittsburgh Corporation Wheeling-Pittsburgh Steel 1134 Market Street Wheeling, WV 26003 304-234-2400 http://www.wpsc.com Wheeling-Pittsburgh Corporation is a wholly owned subsidiary of WHX Corporation (NYSE:WHX). Wheeling-Pittsburgh Steel Corporation, a wholly owned subsidiary of WPC, is the ninth-largest integrated steel manufacturer in the United States. The Company is a vertically integrated manufacturer of value-added flat-rolled steel products. The Company's products are sold to steel service centers, converters, processors, the construction industry, and the container and appliance industries. These products are sold directly to third party customers, and to Wheeling-Nisshin and Ohio Coatings Corporation, a joint venture, pursuant to long-term supply agreements. Because of continued upward cost pressures and to ensure its continued viability as a quality supplier, Wheeling-Pittsburgh Steel recently announced it will raise published prices 4.8% on its tin mill products, effective with shipments on Jan. 2, 2001. This will include all base prices and all associated extras for tin plate and tin coated sheet produced at its joint venture Ohio Coatings Company, as well as black plate produced at its Yorkville, Ohio, facility. The Company believes that it is one of the lowest cost domestic flat-rolled steel producers. The Company's low cost structure is the result of: (i) the restructuring of its work rules and staffing requirements under its five-year labor agreement which settled a ten-month strike in 1997; (ii) a strategic balance between its basic steel operations and its finishing and fabricating facilities; and (iii) its efficient production of low-cost, high-quality metallurgical coke. Customer Base The Company markets an extensive mix of products to a wide range of manufacturers, converters and processors. The Company's 10 largest customers (including Wheeling-Nisshin) accounted for approximately 43.7% of its net sales in 1999. Wheeling-Nisshin was the only customer to account for more than 10% of net sales in 1999. Wheeling-Nisshin accounted for 16.2% and 14.6% of net sales in 1999. Geographically, the majority of the Company's customers are located within a 350-mile radius of the Ohio Valley. However, the Company has taken advantage of its river-oriented production facilities to market via barge into more distant locations such as the Houston, Texas and St. Louis, Missouri areas. The Company has also acquired regional fabricated product facilities to service an even broader geographical area. The Company's shipments historically have been concentrated within seven major market segments: steel service centers, converters/processors, construction, agriculture, container, automotive, and appliances. The Company's overall participation in the construction and the converters/processors markets substantially exceeds the industry average and its reliance on automotive shipments as a percentage of total shipments is substantially less than the industry average. Production Facilities The Company has one raw steel producing plant and various other finishing and fabricating facilities. The Steubenville complex is an integrated steel producing facility located at Steubenville and Mingo Junction, Ohio, and Follansbee, West Virginia. The Steubenville complex includes coke oven batteries that produce all coke requirements, two operating blast furnaces, two basic oxygen furnaces, a two-strand continuous slab caster with an annual slab production capacity of approximately 2.4 million tons, an 80- inch hot strip mill and pickling and coil finishing facilities. The Ohio and West Virginia locations, which are separated by the Ohio River, are connected by a railroad bridge owned by the Company. A pipeline is maintained for the transfer of coke oven gas for use as fuel from the coke plant to several other portions of the Steubenville complex. The Steubenville complex primarily produces hot-rolled products, which are either sold to third parties or shipped to other of the Company's facilities for further processing into value-added products. The other principal plants of the Company and the annual capacity of the major products produced at each facility are: Allenport, Pennsylvania (continuous pickler, tandem mill, temper mill and annealing cold rolled sheets, with 950,000 tons capacity per year); Beech Bottom, West Virginia (paint line painted steel in coil form, with 120,000 tons capacity per year); Canfield, Ohio (electrogalvanizing line, paint line, ribbon electrolytic galvanized sheet, and oscillating rewind slitters strip, with 65,000 tons capacity per year); Martins Ferry, Ohio (hot dipped galvanized sheets and temper mill, zinc coating lines coils, with 750,000 tons capacity per year); and Yorkville, Ohio (continuous pickler, tandem mill, temper mills and black plate and cold rolled sheets annealing lines, with 660,000 tons capacity per year). All of the these facilities currently owned by the Company are regularly maintained in good operating condition. However, continuous and substantial capital and maintenance expenditures are required to maintain the operating facilities, to modernize finishing facilities in order to remain competitive, and to meet environmental control requirements. The Company has fabricated products facilities at Fort Payne, Alabama; Houston, Texas; Lenexa, Kansas; Louisville Kentucky; Minneapolis, Minnesota; Warren, Ohio; Gary, Indiana; Emporia, Virginia; Grand Junction, Colorado; and Klamath Falls and Brooks, Oregon. The Company maintains regional sales offices in Atlanta, Chicago, Detroit, Philadelphia, Pittsburgh, and at its corporate headquarters in Wheeling, West Virginia. The Company's Steel-Related Operations The Company has a 50% equity interest in Ohio Coatings Company, which is a joint venture between the Company and Dong Yang, a leading South Korea- based tin plate producer. Nittetsu Shoji America, a U.S. based tin plate importer, holds non-voting preferred stock in OCC. The OCC tin-coating facility is the only domestic electro-tin plating facility constructed in the past 30 years and is positioned to become a premier supplier of tin plate to the container and automotive industries. The OCC tin coating line has a nominal annual capacity of 250,000 net tons. The Company produces all of its tin coated products through OCC. As part of the joint venture agreement, the Company has the right to supply up to 230,000 tons of the substrate requirements of OCC through the year 2012, subject to quality requirements and competitive pricing. Nittetsu markets the product as a sales agent for the Company. The Company owns an electrogalvanizing facility which had revenues of $47.1 million in 1999, while providing an outlet for approximately 60,000 tons of steel in a normal year, and a facility that produces oxygen and other gases used in the Company's steel-making operations. The Company also has a 12 1/2% ownership interest in Empire Iron Mining Partnership, which operates a mine located in Palmer, Michigan. Product Lines (A) Cold Rolled Products. Cold-rolled coils are manufactured from hot-rolled coils by employing a variety of processing techniques, including pickling, cold reduction, annealing and temper rolling. Cold- rolled processing is designed to reduce the thickness and improve the shape, surface characteristics and formability of the product. In its finished form, the product may be sold to service centers and to a variety of end users, such as appliance or automotive manufacturers, or further processed internally into corrosion-resistant coated products, including hot-dipped galvanized, electrogalvanized, or tin mill products. In recent years, the Company has increased its cold-rolled production to support increased sales to Wheeling-Nisshin. (B) Coated Products. The Company manufactures a number of corrosion- resistant, zinc-coated products, including hot-dipped galvanized and electrogalvanized sheets, for resale to trade accounts. The coated products are manufactured from a steel substrate of cold-rolled or hot- rolled pickled coils by applying zinc to the surface of the material to enhance its corrosion protection. The Company's trade sales of galvanized products are heavily oriented to unexposed applications, principally in the appliance, construction, service center, and automotive markets. Typical industry applications include auto underbody parts, culvert pipe, refrigerator backs and heating/air conditioning ducts. The Company sells electrogalvanized products for application in the appliance and construction markets. (C) Tin Mill Products. Tin mill products consist of blackplate and tinplate. Blackplate is a cold-rolled substrate (uncoated), the thickness of which is less than .0142 inches, and is utilized extensively in the manufacture of pails and shelving, and sold to OCC for the manufacture of tinplate products. Tinplate is produced by the electro- deposition of tin to a blackplate substrate and is utilized principally in the manufacture of food, beverage, general line and aerosol containers. While the majority of the Company's sales of these products is concentrated in container markets, the Company also markets products for automotive applications, such as oil filters and gaskets. The Company has phased out its existing tin mill facilities and produces all of its tin coated products through OCC. WPSC expects that its participation in OCC will enable it to expand WPSC's presence in the tin plate market. OCC's $69 million tin coating mill, which commenced commercial operations in 1997, has a nominal annual capacity of 250,000 net tons. (D) Hot-Rolled Products. Hot-rolled coils represent the least processed of the Company's finished goods. Approximately 71% of the Company's 1999 production of hot-rolled coils was further processed internally into value-added finished products. The balance of the tonnage is sold as hot-rolled black or pickled (acid cleaned) coils to a variety of consumers for uses by converters/processors, steel service centers and the appliance industries. (E) Fabricated Products. Fabricated products consist of cold-rolled or coated products further processed mainly via roll forming and sold in the construction, agricultural, and highway products industries. (F) Construction Products. Construction products consist of roll- formed sheets which are utilized in sectors of the non-residential building market, such as commercial, institutional and manufacturing. They are classified into three basic categories: roof deck; form deck; and composite floor deck. Roof deck is a formed steel sheet, painted or galvanized, which provides structural support in non-residential roofing systems. Form deck is a formed steel sheet, painted, galvanized or uncoated, that provides structural form support for structural or insulating concrete slabs in non-residential floor or roofing systems. Composite floor deck is a formed steel sheet, painted, galvanized or uncoated, that provides structural form support and positive reinforcement for structural concrete slabs in non-residential floor systems. (G) Agricultural Products. Agricultural products consist of roll- formed corrugated sheets which are used as roofing and siding in the construction of barns, farm machinery enclosures and light commercial buildings and certain residential roofing applications. These products can be manufactured from hot-dipped or painted hot-dipped galvanized coils. Historically, these products have been sold primarily in rural areas. In recent years, however, such products have found increasing acceptance in light commercial buildings. (H) Highway Products. Highway products consist of bridge form, which is roll-formed corrugated sheets that are swedged on both ends and are utilized as concrete support forms in the construction of highway bridges. Reconstitution of WPSC's Board Immediately prior to the filing of its Chapter 11 cases, the Board of Wheeling-Pittsburgh Steel Corporation was reconstituted to include Ronald LaBow, chairman of the board of WHX; Robert A. Davidow, vice chairman of the board of WHX; Marvin L. Olshan, senior partner of Olshan Grundman Frome Rosenzweig & Wolosky, and secretary of WHX; James G. Bradley, president and chief executive officer of WPSC; Robert L. Dobson, retired Wheeling- Pittsburgh Steel executive; and Ron Hobbs, retired president, CEO and chairman of the board of Wesbanco. A chairman of the Board will be named at the next board meeting. Paul W. Bucha, former chairman of the board; Paul Mooney, executive vice president and chief financial officer of WPSC; Jim Bowen, president of the West Virginia AFL-CIO; Lynn Williams, former International President, USWA; and Tomonori Tokita, chairman of Wheeling-Nisshin, Inc., are no longer a part of the WPSC Board. Bucha is chairman of the Board of Ohio Coatings Company, and remains as a director of WHX and Wheeling-Nisshin. -------------------------------------------------------------------------- [00002] COMPANY'S CONSOLIDATED BALANCE SHEET AS OF JUNE 30, 2000 -------------------------------------------------------------------------- WHEELING-PITTSBURGH CORPORATION AND SUBSIDIARY COMPANIES CONSOLIDATED BALANCE SHEET As of June 30, 2000 (Unaudited) ASSETS Current Assets: Cash and cash equivalents .................... $ -- Trade receivables - net ...................... 52,156,000 Inventories: Finished and semi-finished products ...... 179,983,000 Raw materials ............................ 59,260,000 Other materials and supplies ............. 23,135,000 Excess of LIFO over current cost ......... 4,489,000 -------------- 266,867,000 Prepaid expenses and deferred charges ........ 5,622,000 -------------- Total current assets ................. 324,645,000 -------------- Investments in associated companies ................ 62,182,000 Property, plant and equipment at cost, less accumulated depreciation ..................... 658,750,000 Deferred income taxes .............................. 167,348,000 Due from affiliates ................................ 52,729,000 Deferred charges and other assets .................. 26,129,000 -------------- $1,291,783,000 ============== LIABILITIES AND STOCKHOLDERS' EQUITY Current Liabilities: Trade payables ............................... $ 141,140,000 Short-term debt .............................. 92,851,000 Deferred income taxes - current .............. 27,406,000 Other current liabilities .................... 89,666,000 Long-term debt due in one year ............... 545,000 -------------- Total current liabilities ................ 351,608,000 Long-term debt ..................................... 357,048,000 Other employee benefit liabilities ................. 386,949,000 Other liabilities .................................. 30,562,000 -------------- 1,126,167,000 -------------- Stockholders' Equity: Common Stock - $.01 par value - 100 shares issued and outstanding............. -- Additional paid-in capital ................... 335,138,000 Accumulated earnings (deficit) ............... (169,522,000) -------------- Total stockholders' equity ......................... 165,616,000 -------------- $1,291,783,000 ============== -------------------------------------------------------------------------- [00003] COMPANY'S PRESS RELEASE CONCERNING CHAPTER 11 FILING -------------------------------------------------------------------------- WHEELING, West Virginia -- November 16, 2000 -- Wheeling-Pittsburgh Steel Corporation today announced that it has filed a voluntary petition in the United States Bankruptcy Court, in Youngstown, OH, to reorganize under Chapter 11 of the U.S. Bankruptcy Code. The bankruptcy filing was necessitated by the company's inability to meet its debt obligations and will allow Wheeling-Pittsburgh Steel to access new working capital and restructure its finances. Wheeling-Pittsburgh Steel is continuing all normal business operations and will continue uninterrupted services to its customers. No plant closures are planned as a result of today's filing. "We have requested and expect to receive prompt authorization from the Bankruptcy Court to continue to pay all salaries, wages, pensions and benefits," said James G. Bradley, President and CEO. "In addition, I want our valued customers to know that Wheeling-Pittsburgh is still in business and that this filing will not disrupt the production and delivery of their orders. We will continue to book new orders and do everything we can to satisfy our customers' needs." The Chapter 11 filing will allow Wheeling-Pittsburgh to reduce its debt, which will make the company more attractive for outside equity and improve the long-term viability of its operations. Wheeling-Pittsburgh Steel is a wholly-owned subsidiary of WHX Corp. (NYSE: WHX), NY. WHX and its other subsidiary companies, Unimast and Handy & Harman, are unaffected by Wheeling-Pittsburgh Steel Corporation's Chapter 11 filing. To ensure the company has the capital necessary to continue to operate its business as normal during the restructuring process, WPSC has entered into an agreement with Citibank, N.A. to provide $290 million debtor-in- possession (DIP) financing. The DIP financing will enable the company to pay for the post-petition delivery of goods and services and continue operations and administration necessary to meet current and future customer needs. (Borrowings under the DIP facility are subject to Court approval.) The company said that the DIP financing provides substantial assurance that WPSC will be able to continue normal operations during the Chapter 11 process. "Today's filing occurs at a time when the company and its employees should be benefiting from hard-won productivity and quality improvements," said Bradley. "Wheeling-Pittsburgh Steel has improved its quality and customer satisfaction levels even as it has lowered its costs in the face of rising energy prices. "However, these gains were not enough to counter the marked deterioration of pricing caused by the current surge in illegally-priced foreign steel imports. The cumulative effect of unrestrained illegal steel imports that has occurred since 1998 has caused irreparable harm to the domestic steel industry and is the root cause of our Chapter 11 filing today," Bradley said. "The crisis facing domestic steel companies requires action from Washington," Bradley said. "It is time that our leaders actively and vigilantly enforce our trade laws and create a level playing field for an industry that has played a major role in building and protecting America." --------------------------------------------------------------------------- [00004] STATEMENT BY WHX CONCERNING WHEELING-PITTSBURGH'S CHAPTER 11 CASES --------------------------------------------------------------------------- NEW YORK, New York -- November 16, 2000 -- WHX Corporation (NYSE: WHX) today confirmed that its wholly owned subsidiary, Wheeling-Pittsburgh Corporation (WPC), today filed petitions in Youngstown, Ohio, for itself and certain of its subsidiaries (including Wheeling-Pittsburgh Steel Corporation) to reorganize under Chapter 11 of the Bankruptcy Code. Neither WHX nor its other operating subsidiaries, including Handy & Harman, Unimast Incorporated and Wheeling Entertainment, are involved in the filing. WHX said that the filing does not affect the operations, capital resources or ownership of the other subsidiaries of WHX, which include Handy & Harman, a diversified manufacturing company; Unimast, a leading manufacturer of steel framing; and WHX Entertainment, a co-owner of a racetrack and video lottery facility. The WPC filing also creates no defaults on any obligations of WHX, Handy & Harman, Unimast, or Wheeling Entertainment. Ronald LaBow, chairman of the Board of WHX said, "In the face of the deteriorating market conditions for the domestic integrated steel industry, we believe this filing by WPC's management is in the best interests of WHX shareholders, as well as WPC's creditors, employees and customers. "The action by WPC neither involves nor affects other WHX subsidiaries or their operations. At September 30, 2000, WHX had cash and short-term investments and precious metals inventory (at market values) of $236 million. Additionally, Handy & Harman and Unimast had committed credit facilities totaling $150 million, with outstanding borrowings and letters of credit of $94 million," Mr. LaBow said. "We expect it to be business as usual for the employees and vendors of Handy & Harman, Unimast and Wheeling Entertainment. This includes all matters relating to pensions, 401(k) retirement plans and other employee benefits. Handy & Harman, Unimast and Wheeling Entertainment customers can be assured of continued production, delivery and service in their dealings with the respective companies. All contracts and business relationships with these companies remain unchanged," he said. WHX is a holding company that invests in or acquires a diverse group of businesses on a decentralized basis. WHX's primary businesses currently are Handy & Harman, a diversified manufacturing company whose strategic business segments encompass, among others, specialty wire, tubing, and fasteners, and precious metals plating and fabrication, and WPC, a vertically integrated manufacturer of value-added and flat rolled steel products. WHX's other businesses include Unimast Incorporated, a leading manufacturer of steel framing and other products for commercial and residential construction and WHX Entertainment Corp., a co-owner of a racetrack and video lottery facility located in White, West Virginia. -------------------------------------------------------------------------- [00005] WHEELING-PITTSBURGH COMPANIES' CHAPTER 11 DATABASE -------------------------------------------------------------------------- LEAD DEBTOR: Pittsburgh-Canfield Corporation 1134 Market St. Wheeling, WV 26003 DEBTOR AFFILIATES FILING SEPARATE CHAPTER 11 PETITIONS: Wheeling-Pittsburgh Corporation Wheeling-Pittsburgh Steel Corporation Consumers Mining Company Wheeling-Empire Company Mingo Oxygen Company WP Steel Venture Corporation W-P Coal Company Monessen Southwestern Railway Company Chapter 11 Petition Date: November 16, 2000 Court: United States Bankruptcy Court Northern District of Ohio, Youngstown Division U.S. Courthouse and Federal Building 125 Market Street P.O. Box 147 Youngstown, Ohio 44501 (330) 746-7027 Bankruptcy Case Nos.: 00-43395 through 00-43402 Judge: The Honorable William T. Bodoh Circuit: Sixth Debtors' Lead Counsel: Michael E Wiles, Esq. Richard F. Hahn, Esq. Lorna G. Schofield, Esq. Judith Taft, Esq. Charles R.A. Morse, Esq. Faune P. Devlin, Esq. Alison L. LaCroix, Esq. Sean Mack, Esq. Debevoise & Plimpton 875 Third Avenue New York, NY 10022 Telephone (212) 909-6000 Fax (212) 909-6836 Debtors' Local Counsel: James M. Lawniczak, Esq. Scott N. Opincar, Esq. Calfee, Halter & Griswold LLP 1400 McDonald Investment Center 800 Superior Ave Cleveland, OH 44114 Telephone (216) 622-8200 Fax (216) 241-0816 -------------------------------------------------------------------------- [00006] LIST OF WHEELING-PITTSBURGH'S 30 LARGEST UNSECURED CREDITORS -------------------------------------------------------------------------- Creditor Nature of Claim Amount -------- --------------- ------ Bank One Investment Management Debt securities $275,000,000 Group, as Trustee 9-1/4% Senior Notes Attn: David B. Knox due 2007 100 East Broad St. Columbus, OH 43215 Tel: 614-248-6229 Fax: 614-248-5195 National City Bank, as Debt securities $ 75,000,000 Administrative Agent Notes under Term Loan Corporate Trust Department Agreement Attn: Holly Pattison 629 Euclid Ave. Cleveland, OH 44114-3484 Tel: 216-575-2552 Fax: 216-575-9326 Coal Miner Retiree Medical Benefits Govt. required benefit $ 78,883,000 UMWA Health & Requirement Funds Attn: Carl Tennille 4455 Connecticut Ave., NW Washington, DC 20008 Tel: 202-521-2288 Fax: 202-521-2291 PA Workmen's Compensation Govt. required benefit $ 10,047,000 Commonwealth of Pennsylvania Department of Labor and Industry Bureau of Workers' Compensation Self- Insurance Division Attn: George Knehr 1171 S. Cameron St., Room 324 Harrisburg, PA 17104-2501 Tel: 717-783-4476 Fax: 717-772-1878 Ohio Workmen's Compensation Govt. required benefit $ 8,777,000 Ohio BWC Attn: Judy Brabb 30 W. Spring St., L-26 Columbus, OH 43215 Tel: 614-644-5061 Fax: 674-466-0149 E-mail: judy.brabb@bwc.state.oh.us United States Environmental Environmental claim $ 4,627,000 Protection Agency Attn: Bernie Turlinski, Region 3 1650 Arch Street Philadelphia, PA 19103-2029 Tel: 215-814-2052 Fax: 215-814-2114 E-mail: turlinski.bernie@epa.gov and Michael R. Berman, Agent USEPA Region V - R 5 ORC 77 West Jackson Blvd. Chicago, IL 60604-3590 Tel: 312-886-6837 Fax: 312-886-0747 Industrial Development Authority Capital lease $ 4,374,000 of Greensville County, VA Attn: D. David Whittington, County Administrator 1750 East Atlantis St. Emporia, VA 23847 Tel: 804-348-4205 Fax: 804-3484257 WV Workmen's Compensation Govt. required benefit $ 3,543,000 Workers' Compensation Division Office of Self-Insurance Attn: Lisa Teel 4700 MacCorkle Ave., SE Charleston, WV 25339-1410 Tel: 304-926-5046 Fax: 304-926-1880 E-mail: lteel@wvbep.org Fata Hunter Inc. Contract $ 3,330,307 Attn: Robert H. Lukacs 6147 River Crest Drive Riverside, CA 95207 Tel: 909-653-1440 Fax: 909-653-5260 Danieli Contractor $ 3,067,475 Attn: Stevan Demase 800 Cranberry Woods Dr., Ste. 400 Cranberry Twp., PA 16066 Tel: 724-778-5400 Fax: 724-778-5401 FBW Leasecorp, Inc. Capital lease $ 2,816,000 Attn: Bill Carter 629 East Main St. Richmond, VA 23219 Tel: 804-649-2512 Fax: 804-649-2207 TRW Space & Defense Software services $ 2,710,000 P.O. Box 7777-W2890 Philadelphia, PA 19175 and James P. Connolly, Agent TRW Systems & Information Technology Group 1760 Glenn Curtiss Street Carson, CA 90746 Tel: 310-764-9383 Fax: 310-764-6203 e-mail: JimConnolly@TRW.COM Riodoce International Finance Supplier $ 2,669,506 Attn: Armando DeOliveira Santos Commercial Director, Minerals Division 546 Fifth Avenue, 12 th Floor New York, NY 10036 Tel: 212-589-9899 Fax: 212-391-1000 e-mail: armando@cvrd.com.br Central West Virginia Energy Co. Coal supplier $ 2,377,712 Attn: Thomas Smith P.O. Box 26765 Richmond, VA 23261 Tel: 804-788-1814 Fax: 804-780-2353 E-mail: thomas.smith@masseycoal.com Noranda Inc. Supplier of zinc $ 1,746,687 c/o Wanda Wynn Mellon Bank 3 Mellon Bank Ctr Rm #2723 Pittsburgh, PA 15259 and Dan Marcotte, Agent Noranda Inc. 1 Adelaide St., E Toronto, Ontario Canada MSC2Z6 Tel: 416-982-7017 Fax: 416-982-3521 E-mail: marcottd@normin.com Ashland Chemical (Est.) Gas supply $ 1,600,000 Attn: Patrick Ryan P.O. Box 2219 Columbus, OH 43216 Tel: 888-512-3586 Fax: 614-790-6760 E-mail: pryan@ashland.com Marubeni American Corporation Raw materials supplier $ 1,576,141 Attn: Toshiyuki Watanabe (Josh) 450 Lexington Avenue New York, NY 10017 Tel: 212-450-0382 Fax: 212-450-0730 American Electric Power (Est.) Energy $ 1,523,249 Attn: Frederick M. Rogers 110 John Scott Hwy. P.O. Box 520 Steubenville, OH 43952-0520 Tel: 740-266-3026 Fax: 740-266-3009 E-mail: fmrogers@aep.com MINTEC Int'l Inc. Supplier (refractory) $ 1,466,003 Attn: John Ohalek Bordertown Ave. P.O. Box 204 Old Bridge, NJ 08857 Tel: 304-670-5824 Fax: 740-282-1555 E-mail: jaohalek@clover.net Ceredo Synfuels LLC Supplier (snyfuel) $ 1,304,810 Attn: Fred Verardi P.O. Box 308 Ceredo, WV 25507 Tel: 304-453-1336 Fax: 304-453-6927 E-mail: fuerardi@electricfuels.com Eichleay Corp. Contractor $ 1,270324 Attn: Mike Hubbard 6585 Penn Ave. Pittsburgh, PA 15206 Tel: 412-363-9000 Fax: 412-365-3305 Mingo Junction Energy Center Supplier (oxygen) $ 1,243,634 LLC/Acetex 1717 E. Morten Ave. Suite 210 Phoenix, AZ 85020 and Thomas Shepard, Agent Mingo Junction Energy Center LLC/Acetex 200 N. LaSalle St., Ste. 2820 Chicago, IL 60601 Tel: 312-421-3313 Fax: 312-421-1139 E-mail: tom@shepard.net Sauer Inc. Contractor $ 1,214,864 Attn: Ralph Stahley 30-51 st St. Pittsburgh, PA 15201 Tel: 412-687-4100 Fax: 412-687-4114 Enron Capital & Trade Supplier $ 1,170,000 Attn: Tammy Mulrooney, Manager Enron North American corp. P.O. Box 4428 Houston, TX 77210-4428 Tel: 713-853-4757 Fax: 713-646-4816 Franco Steel Corp. Supplier (unfinished) $ 1,121,473 Attn: Gilbert Romano 345 Hudson St. New York, NY 10014 Tel: 800-327-5440 Fax: 212-633-1774 Interstate Gas Supply Gas supplier $ 1,103,938 Attn: Steve Casciani P.O. Box 631919 Cincinnati, OH 45263-1919 Tel: 614-923-1234 Fax: 614-923-1010 Tube City, Inc. Raw materials supplier $ 1,023,945 Attn: John Keyes P.O. Box 3500 Pittsburgh, PA 15230 Tel: 412-678-6141 Fax: 412-678-2210 E-mail: jkeyes@tubecity.com BP Energy Company Supplier $ 997,348 Attn: Nick J. Kornuta 501 Westlake Park Boulevard Houston, TX 77079 Tel: 281-366-4947 Fax: 281-366-4929 E-mail: kornutnj@hp.com -------------------------------------------------------------------------- [00007] DEBTORS' MOTION FOR APPROVAL OF $290,000,000 DIP FINANCING PACT -------------------------------------------------------------------------- The Debtors' pre-petition liabilities fall into four categories: (A) WPSC is a party to a Third Amended and Restated Credit Agreement dated as of April 30, 1999 with certain financial institutions, and Citibank, N.A., as agent, which provides WPSC with a revolving line of credit for borrowings up to $150,000,000, with a $25,000,000 sub-limit for letters of credit. Borrowings under that Prepetition Credit Agreement are secured primarily by 100% of the eligible inventory of WPSC and PCC. In addition, WPC, PCC and Wheeling Construction Products, Inc. (which has been merged into WPSC) have guaranteed WPSC's obligations under the Prepetition Credit Agreement. As of the Petition Date: (i) the Debtors owed the Prepetition Lenders roughly $97,000,000 on account of loans made under the Prepetition Credit Agreement and (ii) the Debtors were contingently liable to the Prepetition Lenders for approximately $18,000,000 on account of letters of credit issued pursuant to the Prepetition Credit Agreement. (B) WPC is the issuer of $275,000,000 principal amount of 9-1/4% Senior Notes due November 15, 2007 and borrowed $75,000,000 under a Term Loan Agreement dated as of November 26, 1997, with DLJ Capital Funding, Inc. as syndication agent. The Senior Notes and borrowings under the Term Loan Agreement are unsecured obligations of WPC and are guaranteed by each of the other debtors in these Chapter 11 cases except W-P Coal Company and Monessen Southwestern Railway Company. (C) WPSC borrowed, and is obligated to repay, certain proceeds of $4,680,000 of industrial development revenue bonds issued by the Industrial Development Authority of Greensville County, Virginia and certain proceeds of $3,500,000 of industrial revenue bonds issued by the Director of the State of Nevada Department of Business and Industry. The repayment obligations of WPSC under the Virginia IRBs and the Nevada IRBs are guaranteed by each of the other debtors except WP Steel Venture Corporation, W-P Coal Company and Monessen Southwestern Railway Company. (D) The Debtors have outstanding accounts payable, principally to trade creditors, in excess of $160,000,000. As with most other large companies, Paul J. Mooney, Vice President and Treasurer of Pittsburgh-Canfield Corporation and an officer of each of PCC's debtor-affiliates, explained to Judge Bodoh at the First Day Hearing, Wheeling-Pittsburg has significant cash needs. "Access to substantial credit is necessary to meet the substantial day-to-day operating costs associated with the Debtors' operations, including the purchasing of materials, the payment of payroll and other obligations. The absence of additional working capital availability would immediately and irreparably harm the Debtors, their estates and their creditors, and would impair the possibility for a successful reorganization," Mr. Mooney testified. Prior to the commencement of their Chapter 11 cases, Mr. Mooney continued, the Debtors negotiated the terms of a $290,000,000 Debtor-in-Possession financing package with: * Citibank, N.A., as the initial issuing bank; * Citicorp U.S.A., Inc., as administrative agent; and * Citicorp U.S.A., * The CIT Group/Business Credit, * National City Commercial Finance, * Foothill Capital Corporation, and * Heller Business Credit, as the DIP Lenders; providing the company with term loan advances up to a maximum aggregate principal amount of $35,000,000. Of that amount, $30,000,000 million will be guaranteed by WHX pursuant to a Limited Recourse Guaranty and Security Agreement in favor of Citicorp U.S.A. In addition, the DIP Lenders have agreed, subject to certain conditions, to provide the Debtors with revolving loans, swing loans and letter of credit accommodations in an aggregate amount of up to $255,000,000. The DIP Lenders will have the option, under certain circumstances, to convert revolving loans in the amount of up to $50,000,000 into term loans with the same terms as such revolving loans. All term loans and revolving loans under the DIP Credit Agreement will be secured by first priority liens on the Debtors' assets (subject to valid liens existing on the Petition Date) and would be granted superpriority administrative status, subject to a $3,500,000 carve-outs for fees payable to the United States Trustee and professional fees. The Debtors believe that they require access to the entire DIP Credit Facility on an interim basis. Such access is required to assure that the Debtors will have sufficient liquidity to sustain their ongoing operations, and to provide trade creditors with the comfort that they will need in order for the Debtors to obtain reasonable post-Petition Date payment terms. The Debtors' working capital assets -- its inventory and accounts receivable -- are already encumbered, Michael E. Wiles, Esq., and Lorna G. Schofield, Esq., of Debevoise & Plimpton told Judge Bodoh, noting that the Debtors sought (without success) to arrange debtor-in-possession financing on alternative terms or from other sources. The Debtors are convinced, Mr. Wiles said, that the terms and conditions of the DIP Credit Facility are fair and represent the best financing option available under the circumstances. The roll-up style DIP Credit Agreement contemplates immediate repayment of all of the outstanding obligations under the pre-Petition Date revolving credit agreement that Wheeling-Pittsburgh Steel Corporation entered into with the Prepetition Lenders, and Citibank, N.A., as agent. The Debtors agree that all repayments to the Prepetition Lenders pursuant to the terms of the DIP Order will be subject to the rights of any official committee of creditors, in later proceedings, to challenge the claims of the Prepetition Lenders and the liens securing those claims and to recover payments if such liens or claims are determined to be invalid or overstated, so long as those claims are asserted within 120 days of the Petition Date. The DIP Credit Agreement also contemplates an immediate repurchase by WPSC of receivables sold to Wheeling-Pittsburgh Funding, Inc. (a wholly-owned subsidiary of WPSC), under a Securitization Facility for which Bank One, N.A. serves as trustee. This repurchase of receivables, Mr. Wiles and Ms. Schofield explained, is required in order to provide unencumbered collateral for post-petition loans under the DIP Facility. There are two holder of Securitization Certificates issued by the Wheeling-Pittsburgh Trade Receivables Master Trust pursuant to the Wheeling-Pittsburgh Trade Receivables Master Trust Pooling and Servicing Agreement dated as of August 1, 1994 and a Series 1999-1 Supplement dated as of May 27, 1999: * Citibank, N.A., holding $90,000,000 of the certificates; and * IBJ Whitehall Credit Corporation holding $15,000,000. This repurchase will also be without prejudice to the rights of any official committee of creditors to challenge the claims of the securitization trustee and to recover payments if such claims were determined to be invalid or overstated within 120 days of the Petition Date. Revolving loans will bear interest at: * Citibank's base rate plus 1.25% to 2.25% for Base Rate Loans; or * LIBOR plus 2.75% to 3.25% for Eurodollar Rate Loans. In the event of a default, the interest rate increases by 2%. Term loans will bear interest at 16% per annum. So long as no Default has occurred and is continuing, the Debtors may pay all or a portion of the interest payable on the Term Loans in excess of 13% per annum by adding such excess amount ("PIK Interest") to the principal amount outstanding on the Term Loans on the first Business Day of each calendar month. The Debtors will pay a variety of fees under the DIP Financing Pact: * Commitment Fees ranging from 0.500% to 0.625%, payable on the daily unused portion of the revolving loan commitment under the DIP Credit Facility; * Letter of Credit fees ranging from 2.25% to 2.75%; * an Underwriting Fee equal to 2.25% of the amount of the Revolving Loan Facility; * an annual $25,000 Agent's Fee; * an annual $225,000 Collateral Monitoring Fee; * a Structuring Fee of 0.50% of the amount of the Term Loan Facility; * an additional Underwriting Fee equal to: (i) 3.00% of the total amount of the term loan commitments on the Closing Date, payable on such date, (ii) 3.00% of any additional term loan commitments made after the Closing Date and (iii) 1.00% of the then-existing term loan commitments on the first anniversary of the Closing Date; and * a $750,000 fee will be payable to WHX in consideration of its guarantee of the term loans. The Debtors covenant that they will limit Capital Expenditures for the period from November 1, 2000, through the last day of each Fiscal Year indicated to: Maximum Amount of For the Fiscal Year Ending Capital Expenditures -------------------------- -------------------- December 31, 2000 $12,500,000 December 31, 2001 $42,500,000 December 31, 2002 $60,000,000 Additionally, the Debtors covenant that they will at all times maintain Excess Availability of not less than $15,000,000 under the DIP Facility. With respect to Reclamation Claims, the DIP Financing Agreement provides, at Section 7.21, that the Debtors will not "make any payments or transfer any property on account of claims asserted by vendors of any Borrower for reclamation in accordance with Section 2-702 of the UCC and Section 546(c) of the Bankruptcy Code [or] enter into any agreements or file any motion seeking a Bankruptcy Court order for the return of inventory to any vendor pursuant to Section 546(g)* of the Bankruptcy Code, other than as expressly . . . permitted [in] the Final [DIP Financing] Order." *** End of Issue No. 1 *** ------------------------------------------------------------------------- Peter A. Chapman peter@bankrupt.com http://bankrupt.com ------------------------------------------------------------------------- Recommended Reading: "Panic on Wall Street: A History of America's Financial Disasters." 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