Receives commitment for $110 million term loan
WHEELING, W.Va., April 30 /PRNewswire-FirstCall/ -- Esmark Incorporated
(Nasdaq: ESMK) today announced that it has agreed to the material terms of
a proposed tender offer and merger with Essar Steel Holdings Limited for a
cash purchase price of $17.00 per share. The Company plans to enter into
definitive documentation upon expiration or waiver of the approximate 52
day "right to bid" period set forth in the collective bargaining agreement
with the United Steelworkers. Esmark has also entered into a binding
commitment letter with Essar for a $110 million term loan which is
anticipated to be funded by the middle of May. Proceeds of the loan will be
used to refinance the existing term loan and provide additional liquidity.
Within ten days of entering into definitive documentation, a
wholly-owned subsidiary of Essar will effectuate the two-step acquisition
by means of a front-end, cash tender offer for all of the outstanding
shares of Esmark's common stock, at $17.00 per share in cash. If greater
than 50% of the outstanding shares are tendered, then a second-step,
cash-out merger would follow in which all remaining shares of Esmark common
stock will be converted into the right to receive $17.00.
James P. Bouchard, Chairman and Chief Executive Officer of Esmark
Incorporated, said, "The proposed merger with Essar is the culmination of
an extensive review of the strategic options available to the company that
included exploratory discussions with a number of potential partners. With
spiraling raw material and transportation costs, difficulty securing
long-term financing commitments and the investment challenges associated
with maximizing steel production capacity, we were convinced that a
strategic partner like Essar was the best possible solution for the
long-term prospects of the company moving forward. I am grateful to the
employees of Esmark and Wheeling-Pittsburgh, our shareholders as well as
the United Steelworkers for their continued belief in our company, and I am
proud that the Esmark family will be joining a great company like Essar."
Madhu S. Vuppuluri, President Essar Americas, said "Essar is very
excited about the potential merger with a great company located in the
steel capital of the United States. We plan to make significant investments
into Wheeling- Pittsburgh Steel to make it a low cost, technologically
advanced steel producer. We look forward to a strong relationship with the
United Steelworkers, our employees as well as the local communities."
The tender offer, which was unanimously accepted by Esmark's Board of
Directors, is subject to certain conditions, including the valid tender in
the offer of a majority of the fully diluted Esmark common stock, and other
customary conditions as well as the approval by the Department of Justice
and Committee on Foreign Investment in the United States.
This press release contains forward-looking statements within the
meaning of Section 21E of the Securities Exchange Act of 1934, as amended.
These forward-looking statements are based on current expectations and
assumptions that are subject to risks and uncertainties that could cause
actual results to differ materially. These risks and uncertainties include,
but are not limited to (i) uncertainties concerning the parties entry into
definitive agreements including exercise of the United Steelworkers right
to bid and agreement on mutually acceptable terms for definitive loan
documentation, (ii) the risk that the conditions to closing under such
agreements may not be satisfied and (iii) certain other risks detailed in
the other reports and filings with the SEC by the Company, which identify
important risk factors that could cause actual results to differ from those
contained in the forward-looking statements. In addition, any
forward-looking statements represent the Company's views only as of today
and should not be relied upon as representing views as of any subsequent
date. While the Company may elect to update forward-looking statements from
time to time, it specifically disclaims any obligation to do so.
About Esmark Incorporated
Esmark Incorporated is a vertically integrated steel producer and
distributor, combining steel production capabilities through both blast
furnace and electric arc furnace technologies with the just-in-time
delivery of value-added steel products to a broad customer base
concentrated in the Ohio Valley and Midwest regions. Currently
headquartered in Wheeling, WV, the Company is a producer of carbon
flat-rolled products for the construction, container, appliance,
converter/processor, steel service center, automotive and other markets.
The company's products include various sheet products such as hot rolled,
cold rolled, hot dipped galvanized, electro-galvanized, black plate and
electrolytic tinplate. More information about Esmark can be found at
http://www.esmark.com.
About Essar Steel Holdings Limited (ESHL)
ESHL is a global producer of steel covering India, Canada, USA, the
Middle East and Asia. It is a fully integrated flat carbon steel
manufacturer -- from iron ore to ready-to-market products -- supplying
highly discerning customers in the automotive, white goods, construction,
engineering and shipbuilding industries. With a current capacity of 8
million tons, Essar's expansion in India, Asia and North America will see
capacity rise to 20 to 25 million tons by 2012.
SOURCE Esmark Incorporated
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Related links:
http://www.esmark.com
http://www.prnewswire.com/comp/967451.html/
CONTACT:
Investor Relations: Dennis Halpin of Esmark
Incorporated, +1-304-234-2421 (office), +1-304-650-6474 (mobile),
dhalpin@esmark.com; or Media: Bill Keegan of Edelman,
+1-312-927-8424 (mobile), bill.keegan@edelman.com, for Esmark
Incorporated
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