WEIRTON STEEL ISG mulls buying troubled company

Weirton Steel is still pursuing a plan to remain an independent producer.
WEIRTON, W.Va. (AP) -- Weirton Steel Corp. is negotiating a possible sale as a way to escape bankruptcy.
The struggling steelmaker reported in documents filed late Tuesday with the U.S. Bankruptcy Court in Wheeling, W.Va., that it has discussed a sale with International Steel Group Inc. of Cleveland.
Weirton also outlined a reorganization plan that would eliminate 950 jobs -- nearly one-third of its work force -- and terminate an underfunded pension and health care plan that covers 10,000 retirees and their dependents.
ISG was formed last year after New York buyout firm WL Ross & amp; Co. bought the remnants of bankrupt LTV Corp. Later, it acquired the assets of Bethlehem Steel and Acme Metals. ISG is now the nation's second-largest integrated producer and is in the process of going public.
Toured mill
ISG Chairman Wilbur Ross, in a telephone interview from London Tuesday, said his management team has toured the company mill at Weirton's request.
"That's really about as far as it's gone," he said. "There are, at present, no talks under way.
"It is ISG's practice ... to look at every company that's in difficulty and has put itself up for sale," he said. "That's sort of our standard operating procedure."
Acquiring Weirton -- the nation's fifth-largest integrated producer -- would help ISG expand its growing empire to include one of the largest tin mill operations in the nation. It also would end a labor legacy at the West Virginia mill, once America's largest wholly employee-owned company.
Weirton is still pursuing a plan to remain an independent producer, but success hinges on factors beyond the company's control, including the continuation of tariffs on steel imports and the approval of a federally guaranteed loan package by year's end.
Reorganization plan
Because the Emergency Steel Loan Guarantee program is slated to end Dec. 31, the company had to file its reorganization plan now, while it is still negotiating the proposed changes with the Independent Steelworkers Union, company spokesman Gregg Warren said.
That means the plan will likely be modified before it is presented to the bankruptcy court for a confirmation hearing in early December.
Weirton Steel sought Chapter 11 bankruptcy protection in May after racking up more than $700 million in losses over five years.
The company paid nearly $31 million in retiree benefits in 2002 and expects to pay slightly more than that this year, court documents indicate. As of Dec. 31, 2002, actuarial estimates put Weirton's future cost of retiree benefits at about $356 million.
Other steel companies, including Bethlehem and LTV, have used bankruptcy partly to be freed of obligations to retirees.