Mar 5 2004
The union at bankrupt Weirton Steel have announced that they have reached a tentative labour agreement with International Steel Group, ISG who are in the process of trying to purchase them for US$255 million.
Under the agreement over 2000 steel workers jobs will be preserved and the mills’ hot end would continue operating.
The labour agreement also includes a new contract for union members which was said to be completely different to the existing one and will result in a new way of working.
The tentative agreement also takes ISG one step closer to sealing the takeover deal, while at the same time making it harder for anyone else to make a counter offer. The parties expected to be able to close the deal by the end of April if they receive approval from the US Bankruptcy Court.
Meanwhile, a group of Weirton Steel’s creditors, collectively owed US$118 million have opposed the ISG takeover bid claiming the deal is “fatally flawed”. They claim that the bid undervalues Weirton Steel’s assets and will not provide enough money for creditors.
The creditors also objected to the short time frames and auction procedures which they claim are designed to deter other bidders. In addition they, and the state Workers Compensation Commission objected to the US$6.37 break up fee payable to ISG, if Weirton go with a better offer.
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