YOUNGSTOWN Steelmaker to emerge from bankruptcy

The steelmaker needs labor and pension agreements to receive a $250 million loan.
YOUNGSTOWN (AP) -- Wheeling-Pittsburgh Steel Corp. will be out of bankruptcy within two weeks now that it has won approval for its reorganization plan, an official said.
U.S. Bankruptcy Judge William T. Bodoh approved the plan Wednesday after a hearing in Youngstown, where attorneys said Wheeling-Pitt's creditors had voted overwhelmingly to endorse the restructuring.
The West Virginia steelmaker will emerge from bankruptcy after it receives a $250 million federally guaranteed loan from the Royal Bank of Canada to begin repaying its debts. That's expected to occur within 12 days, said James Bradley, company president and chief executive.
Independent company
After Wheeling-Pitt sheds its bankruptcy status, it will become an independent company, and no longer will be a subsidiary of New York-based WHX Corp.
"In over 18 years in a community that has seen the effects of the demise of many steel companies, I'm delighted to be able to look at one successful case," Bodoh said.
Attorneys for the creditors and the union said Wednesday that an informal agreement has been reached with the United Steelworkers of America on a new contract.
Union attorney David Jury said negotiations that began in May are continuing in Pittsburgh this week to iron out remaining details.
Pact expected soon
He said the union expects an agreement soon. It would then be put to a ratification vote by the rank-and-file.
Although neither side has offered specifics, one union leader said workers are being asked to accept layoffs, as well as pay and benefit cuts.
While it's not in writing either, Wheeling-Pitt also has an informal agreement with the federal Pension Benefit Guaranty Corp. on outstanding pension issues, said Michael Wiles, lead attorney for the steelmaker's creditors. Those discussions also are continuing, but a PBGC attorney confirmed to Bodoh that a formal agreement is close.
The pension and labor issues are critical to the reorganization plan. Wheeling-Pitt must resolve both by June 30 to claim the loan package, and Bradley said he is confident that deadline will be met.
"We will not jeopardize that loan," he vowed.
Wheeling-Pitt plans to use nearly half the money for a new $110 million electric arc furnace, which would let it make steel from scrap rather than just raw materials. The furnace would replace one built in 1903. It is considered the key component to a desperately needed modernization.
Much of the remainder of the loan would be used to pay creditors.
Wheeling-Pitt employs some 3,800 people at plants in Steubenville, Mingo Junction, Yorkville and Martins Ferry, Allenport, Pa., and Follansbee and Beech Bottom in West Virginia.