Birmingham Steel Corporation and North American Metals, Ltd. Sign Definitive Agreement for SBQ Operations.

Business Editors

BIRMINGHAM, Ala.--(BUSINESS WIRE)--Sept. 28, 2000

North American Metals to purchase stock of American Steel &

Wire Corporation and assets of Memphis facility

Birmingham Steel Corporation (BSC) (NYSE: BIR) today announced it has signed a definitive agreement to sell its special bar quality (SBQ) operations in Cleveland, Ohio, and Memphis, Tennessee, to North American Metals, Ltd. (NAM). The terms of the transaction were not disclosed; however, BSC said expected proceeds from the sale will enable the Company to significantly reduce debt and interest expense and retire the $75 million leveraged lease obligation associated with the Memphis facility. As a result of the transaction, the Company will eliminate operating losses related to the Cleveland facility and all carrying costs relating to the idled Memphis melt shop. Upon completion of the sale, the Company's business platform will consist of its core operations in Kankakee and Joliet, Illinois; Birmingham, Alabama; Jackson, Mississippi; Seattle, Washington; and Cartersville, Georgia. The transaction is subject to the approval of BSC's Board of Directors and lenders and completion of financing arrangements with NAM's lenders. The transaction is expected to close on or before December 1, 2000.

John Correnti, Chairman and Chief Executive Officer of Birmingham Steel, commented, "We are pleased to report the signing of a definitive agreement to sell our SBQ operations to North American Metals. This transaction represents a giant step in the financial turnaround of Birmingham Steel. Upon closing of the transaction, we will return to overall profitability and positive cash flow. In addition, we will reduce our balance sheet debt level by approximately 30%."

NAM is a new entity formed to acquire niche companies in the steel industry. NAM has engaged Corus Consulting, a subsidiary of Corus Group PLC, to assist in identifying and assessing acquisition opportunities in the U.S. steel industry. With respect to the purchase of BSC's SBQ operations, NAM said it expects to secure funding commitments totaling $350 million of debt and equity financing for the initial purchase and to support working capital, capital expenditures and re-start of operations at the idled Memphis facility. NAM said financing for the transaction would be facilitated by insurance issued on the value of the acquired facilities.

William Powers, Chairman and Chief Executive Officer of North American Metals, Ltd, commented, "We are excited to announce the purchase of Birmingham Steel's SBQ facilities in Cleveland and Memphis. We see tremendous potential for these facilities to become a leading supplier of SBQ products in the United States. This transaction is the culmination of an innovative financing program that we plan to utilize to acquire other premier, but undervalued, steel assets. We believe our business plan for the Cleveland and Memphis operations will accelerate market penetration goals and generate positive financial returns for the new venture."

NAM said it would retain the American Steel & Wire Corporation identity, the entity under which BSC produced and marketed SBQ products. NAM said it expected to retain the existing management and workforce at Cleveland and will begin planning the re-start of melting and rolling operations in Memphis. Powers said NAM expected to hire additional experienced operations, management and technical personnel for both facilities.

Commenting on BSC's decision to sell the SBQ operations, Correnti said, "With a limited amount of capital spending, we believe the SBQ facilities will be profitable long-term operations. However, Birmingham Steel did not have the financial resources to commit to making the SBQ operations profitable. We believe it is in the best interest of our stockholders and employees to sell these operations and return to the profitable and proven business platform of our core operations."

Correnti continued, "We appreciate the attitude and commitment of our American Steel and Wire Corporation employees in Cleveland, who have endured difficult times during the past three years. We believe the transaction with North American Metals provides a tremendous opportunity for American Steel & Wire to return to its former status as the premier SBQ producer in North America."

Correnti said a number of parties had expressed interest in a purchase or joint venture of the Cleveland and Memphis facilities, and noted that BSC has been in serious negotiations with North American for several months. Correnti said he believes the Company's lenders will be supportive of the transaction and will work with the parties to accommodate a closing date on or prior to December 1, 2000.

Correnti commented, "The sale of the SBQ operations begins a new day for Birmingham Steel. Upon completion of the sale, our financial condition will dramatically improve, and we can shift our focus from near-term survival to long-term growth. Also, the transaction will enable us to reassess our growth options in the steel industry from a much stronger position. We believe the steel industry is ripe for consolidation, and we are open to any opportunities that are accretive to earnings and will build value for our stockholders."

Correnti continued, "The receipt of proceeds from the SBQ sale will not affect the requirement under our current loan agreements to refinance our debt within two years. We are exploring options with several major lending groups regarding a new financing structure that could allow us to establish a more flexible financing base to support the long-term growth goals of the Company."

Correnti concluded, "We are excited about the future, and look forward to continuing progress in our quest to return Birmingham Steel to a place of pre-eminence in the steel industry."

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 provision 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, 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.