Agreement On Consensual Plan Reached In WCI Steel Bankruptcy

WCI Steel, Inc. moved substantially closer to emerging from Chapter 11 with the announcement today of an agreement in principle among WCI, the holders of more than two thirds of WCI’s secured notes, the United Steelworkers and The Renco Group, Inc., WCI’s controlling shareholder.

The agreement remains subject to final documentation, which is scheduled to be completed by March 28, 2006.  Judge Shea-Stonum adjourned the confirmation hearing to 1 p.m. on that date.

Under the agreement in principle, Renco will assume WCI’s existing pension plan, resulting in preservation of retiree pension benefits.

In return, the Reorganized WCI will contribute to the existing pension plan between approximately $15 million and $25 million, depending on the tax consequences of the reorganization.  The agreement eliminates all claims filed by the Pension Benefit Guaranty Corporation against WCI.

The Noteholders Plan is otherwise unchanged and will result in the issuance of $100 million 8% secured notes and 9 million shares of preferred and common stock.  The Noteholders will receive all of the new notes and virtually all of the equity of the reorganized company on account of their claims and their agreements to invest $50,000,000 in the reorganized company.  The Noteholders have asserted that the reorganized company will have a total enterprise value of between $275 million and $325 million.

Unsecured trade creditors will receive between 20% and 22% of their claims in cash.

The USW is a party to the agreement in principle and a supporter of the Noteholders’ Plan, which provides for implementation of a new collective bargaining agreement and retiree medical plan negotiated by the USW, subject to the ratification by the members.  Renco’s assumption of the existing pension plan ensures that all retirees and other beneficiaries of that plan will receive the benefits provided under the plan without interruption.

Questions to the Noteholders should be directed to their counsel, Thomas Moers Mayer, Esq. of Kramer Levin Naftalis & Frankel LLP at 212-715-9169 (office), 917-324-3915 (cell).

Questions to The Renco Group, Inc. should be directed to Steven Rubenstein at Rubenstein Communications Inc., 212-843-8043.