Weirton Accepts ISG's Buyout Offer

February 18, 2004 ( - Beleaguered Weirton Steel Corp has agreed to accept International Steel Group Inc's (ISG) $255 million buyout offer.

ISG’s offer is a combination of cash and the assumption of Weirton Steel’s liabilities. More specific details of the proposed buyout were not immediately available, as a company spokesperson told Dow Jones they would be made available in the bankruptcy court filing.

The buyout would also include 300 layoffs in addition to the 950 Weirton Steel planned to cut as part of its bankruptcy reorganization plan.

While the deal would ultimate keep the lights on at the plan, it could spell the end of free health insurance coverage for some 10,000 retirees, dependents and surviving spouses at Weirton. Recently, the Independent Steelworkers Union negotiated a deal with ISG in which the company would provide more than $3.7 million in “seed money” for a new Voluntary Employee Beneficiary Association to provide health insurance to retirees, although it still remains unclear whether or not retirees would have to pay premiums. Weirton has proposed a similar measure earlier requiring retirees to chip in for health-care premiums. However, retirees bached at the notion, arguing they were paid lower wagers during their career in exchange for certain promises of retiree benefits.

If approved by the court overseeing Weirton’s Chapter 11 bankruptcy proceeding, the buyout would signal the end of an era for the Wheeling, West Virginia-based Weirton, at one time the largest American company owned entirely by its workforce. After Weirton files the details of ISG’s offer with the US Bankruptcy Court in Wheeling , a judge will solicit other bids. It may take as long as 45 days to finalize the sale.