WEIRTON STEEL Company welcomes news of loan extension

The steelmaker plans to upgrade equipment and reduce debt.
MORGANTOWN, W.Va. (AP) -- As part of its omnibus spending bill, Congress has approved a two-year extension of the Emergency Steel Loan Guarantee Program and sent it on to the White House.
The renewal is good news for bankrupt Weirton Steel Corp., which plans to claim a $145 million federally guaranteed loan package if it's able to emerge from Chapter 11 as a stand-alone company. Weirton won conditional approval in November for the loan, which is a key component of its reorganization plan.
Fleet Capital Corp. has agreed to supply the money, $128 million of which would be insured against default by the federal government. The West Virginia Economic Development Authority also has agreed to lend Weirton $5.6 million to supplement that package.
Took a risk
Weirton spokesman Gregg Warren said Friday the company knew it was taking a risk in December when it sought the indefinite postponement of court and creditor approval for its reorganization plan.
"We were fairly confident the extension would be granted," Warren said, "although we were nervous on several occasions -- especially when only the House acted on the omnibus bill and we had to wait for the Senate. There were some moments when we wondered whether the extension was in jeopardy.
"The extension obviously provides the company with additional time to complete several conditions the ESLG board placed on us," he said.
Trading of Weirton stock surged on the news Friday, and the price shot up 131 percent. The company's stock closed at 9 cents, up from 4 cents the previous day. A year ago, Weirton's shares closed at 29 cents.
Plans for loans
The company plans to use the state and federal loans to upgrade mill equipment, reduce debt and finance the cost of emerging from bankruptcy if it is able to meet the federal board's conditions, the most significant of which may be a new labor agreement with the 3,000-member Independent Steelworkers Union.
Last week, the company said there have been no contract talks with the ISU for more than a month. ISU President Mark Glyptis disputed that, saying negotiations have been ongoing since last June. The current contract expires March 31.
Weirton, the nation's No. 2 producer of tin, filed for Chapter 11 protection in May 2003 after losing money for five years. It is struggling to emerge as a stand-alone company while simultaneously pursuing a sale to a larger company.
International Steel Group Inc. of Cleveland has toured the facilities several times but has yet to make an offer. ISG President Rodney Mott said Thursday the company would make an announcement if and when it reaches a decision.
ISU spokesman Dave Gossett, however, said union officials have been holding serious, daily talks with ISG about a possible buyout in hopes of heading off any potential labor conflicts.