Birmingham Steel Corporation Reaches New Agreement With Lenders; New Agreement to Provide Operating and Financial Flexibility.

Business Editors

BIRMINGHAM, Ala.--(BUSINESS WIRE)--April 5, 2000

Lenders to Provide Additional $25 Million Credit Facility

Birmingham Steel Corporation (NYSE:BIR) today announced it has agreed to a term sheet with the steering committee representing its lenders to implement a debt restructuring that will modify its current debt agreements to provide additional operating flexibility, relief from previous financial covenants, and $25 million in new funding commitments. The new $25 million loan will be made to Birmingham Southeast, LLC, an 85% owned subsidiary of the Company. The terms of the debt restructuring remain subject to final approval of the Company's bankers and holders of the Company's Senior Secured Notes and the completion of definitive documents. Definitive documents are expected to be finalized before the end of April.

John D. Correnti, Chairman and Chief Executive Officer of Birmingham Steel, commented, "We are pleased that our lenders have expressed confidence in our management team by agreeing on the terms of new financing arrangements which we believe provide financial and operating flexibility to return Birmingham Steel to profitability."

Correnti said that although the Company has no current plans to issue new equity, under the terms of the new arrangements Birmingham Steel will be permitted to raise up to $100 million in new equity and retain the proceeds for general corporate purposes. The Company will also be allowed to retain proceeds from a higher level of asset sales than was permitted under the prior financing arrangements.

Correnti continued, "Now that we have come to terms on the financing issues, management can focus its attention on our real purpose, which is to turn the Company around and become profitable."

The Company said interest rates on existing debt would not change under the new financing arrangement. Interest rates on the new $25 million loan - which will be used to support working capital and capital expenditures for the Cartersville, Georgia and Jackson, Mississippi plants - will be at the London Interbank Borrowing Rate (LIBOR) plus 4%. As compensation for agreeing to the new terms, the lenders will receive warrants for 3 million shares of the Company's common stock, exercisable over a ten-year period at a price of $3.00 per share.

Correnti commented, "The loan agreement modifications do not require any cash payment from the Company. The lenders chose to be compensated with options to purchase shares of Birmingham Steel, another indication of their support of the Company's management."

The Company has approximately $25 million available under its current $300 million bank revolver. With the new loan commitment, the total amount available to the Company and its subsidiaries will increase by an additional $25 million.

Birmingham Steel operates in the mini-mill sector of the steel industry and conducts operations at facilities located across the United States. The common stock of Birmingham Steel is traded on the New York Stock Exchange under the symbol "BIR".

Except for historical information, the matters described in this press release are forward-looking statements within the meaning of the safe-harbor provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially, including economic conditions, market demand factors, equipment breakdowns or failures, Birmingham Steel's success in implementing the restructuring plan, the Company's continued compliance with its financing arrangements and its principal debt agreements, as well as other risks described from time to time in the Company's periodic and special filings with the Securities and Exchange Commission. Any forward-looking statements contained in this document speak only as of the date hereof, and the Company disclaims any intent or obligation to update such forward-looking statements.