FOLLANSBEE, W.Va., April 27 /PRNewswire-FirstCall/ -- Wheeling-Pittsburgh
Steel Corporation (Nasdaq: WPSC) today filed a lawsuit in the Brooke County,
West Virginia Circuit Court against Central West Virginia Energy Company
(CWVEC) a subsidiary of Massey Energy Company, alleging substantial monetary
damages.
The suit charges CWVEC with breaching its long-term coal supply agreement
beginning in late 2003 and continuing to the present, causing Wheeling-
Pittsburgh Steel to purchase coal on the spot market at significantly higher
prices than under its agreement with CWVEC.
"Massey's flagrant disregard of its long-term coal supply agreement has
caused millions in dollars of damages to Wheeling-Pittsburgh Steel's business
and dramatically increased the cost of our coke oven repair program," said
James G. Bradley, Chairman and CEO. "A reliable supply of properly blended
coal is critical to our Coke Plant's operations and to the future of this
company. This lawsuit is necessary to enforce a critically important contract
to this company's future, and to protect our 3,400 employees who have
sacrificed to rebuild Wheeling-Pittsburgh Steel into a successful company in a
very competitive steel industry."
CWVEC has supplied Wheeling-Pittsburgh Steel with high volatile
metallurgical coal since 1993. In 2002, during Wheeling-Pittsburgh Steel's
bankruptcy process, an amended coal supply agreement was signed and approved
by the bankruptcy court that extended this requirements contract through 2010.
As part of that agreement, Wheeling-Pittsburgh Steel agreed to pay Massey its
pre-petition receivable of $7.2 million in 60 equal monthly installments, as
well as increase the base price it paid for Massey's coal. If it had not been
assumed, Massey, as an unsecured creditor, would have received a minimal
percentage of this amount.
"Without a highly-reliable supply of properly blended coal, our coke
batteries were not able to provide us with enough coke to keep our blast
furnace operations running at production levels necessary to service the steel
market," Bradley said. "More importantly, our coke batteries, which are
continuous, 24-hour-a-day, seven-day-a-week operations, were damaged because
of Massey's diversion of Wheeling-Pittsburgh Steel's contracted coal to the
spot market."
"We tried to work with the leadership of Massey Coal to resolve these
issues, but without any success," Bradley noted. "While we have been reluctant
to file this suit, we believe we have a strong case and are determined to
demonstrate Massey unlawfully avoided its contractual obligations, costing
this company millions of dollars in added expense, millions of dollars in
damage to our coke plant and threatening the future of Wheeling-Pittsburgh
Steel."
CWVEC is a wholly-owned subsidiary of Massey Metallurgical Coal, Inc., and
it is in turn a wholly-owned subsidiary of Massey Energy, the nation's largest
producer of metallurgical coal.
About Wheeling-Pittsburgh Steel:
Wheeling-Pittsburgh is a steel company engaged in the making, processing
and fabrication of steel and steel products using both integrated and electric
arc furnace technology. The Company's products include hot rolled and cold
rolled sheet and coated products such as galvanized, pre-painted and tin mill
sheet. The Company also produces a variety of steel products including roll
formed corrugated roofing, roof deck, floor deck, bridgeform and other
products used primarily by the construction, highway and agricultural markets.
This release may contain projections or other forward-looking statements
regarding future events or the future financial performance of Wheeling-
Pittsburgh Corporation that involve risks and uncertainties. Readers are
cautioned that these forward-looking statements are only predictions and may
differ materially from actual future events or results. Readers are referred
to the "Business - Risk Factors" section of the Company's Annual Report on
Form 10-K for the year ended December 31, 2004, and other reports and filings
with the SEC, which identify important risk factors that could cause actual
results to differ from those contained in the forward-looking statements.
SOURCE Wheeling-Pittsburgh Steel Corporation
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http://www.wpsc.com
Company News On-Call:
http://www.prnewswire.com/comp/967451.html
CONTACT:
Jim Kosowski of Wheeling-Pittsburgh Steel
Corporation, +1-304-234-2440
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