Weirton Steel Corp. (Weirton, WV, U.S.), the fifth-largest U.S. integrated steel company, has announced it has taken a large step toward emerging from bankruptcy now that it has received conditional permission to participate in the Emergency Steel Loan Guarantee (ESLG) Program.
The decision by the program's board will enable Weirton Steel to secure a U.S. $145 million loan to help the steelmaker exit bankruptcy. The company must comply with various conditions established by the program board which company personnel currently are evaluating. The final action needed for the company to emerge depends on approval of its reorganization plan currently before a federal bankruptcy judge.
"This is tremendous news for our company, our employees, the State of West Virginia and the Upper Ohio Valley," D. Leonard Wise, Weirton’s Steel CEO officer, said. The company employs about 3,500 people.
The ESLG Program will guarantee 88 percent, or U.S. $128 million, of Weirton Steel's bankruptcy emergence loan from Chicago,IL, U.S.-based Fleet Capital Corp. The bank will close on the loan if Judge L. Edward Friend II approves the company's reorganization plan before Dec. 31. The judge is expected to make his decision before that date.
Weirton Steel, which has operated under Chapter 11 bankruptcy protection since May 19, would use the loan to offset the cost of emergence from bankruptcy and upgrade its mill equipment.
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