Chatwins Group and Reunion Industries Announce Revised Agreement to Merge.

PITTSBURGH--(BUSINESS WIRE)--Aug. 6, 1999--

Chatwins Group Inc., a privately held corporation, today announced that it has entered into an amended merger agreement with Reunion Industries Inc. (Nasdaq Small Cap:RUNI)(PCX:RUN).

Chatwins currently owns approximately 36.8% of Reunion's outstanding common stock.

The parties are pursuing a revised strategy for satisfying the merger's financing condition described later herein. Chatwins has entered into a letter of intent providing for the sale of its Klemp industrial grating division for approximately $32.6 million cash plus the assumption of certain operating liabilities. This transaction will strengthen Chatwins' financial condition and should enable the parties to obtain private senior and subordinated financing to satisfy the merger financing condition.

Reunion is a Stamford, Conn. based corporation currently engaged in manufacturing high volume precision plastic products and providing engineered plastic services in New York, North Carolina, Indiana and Ireland. Reunion also has wine grape agricultural operations in Napa County, Calif. For the year ended Dec. 31, 1998, Reunion had sales of $97.3 million and a net loss of $12.4 million, which included charges of $9.2 million for an adverse legal judgment and $1.7 million from discontinued operations.

In approving the merger, Chatwins' board of directors determined that combining the two companies should, among other things, make borrowing less expensive and less restrictive and provide Chatwins' shareholders with the greater liquidity that is typically available to publicly-traded companies.

The amended merger agreement expressly authorizes the sale of Klemp and makes completion of the Klemp transaction a condition of the merger. In the merger, the outstanding common stock of Chatwins will be converted into a total of 9,500,000 shares of Reunion common stock, plus up to an additional 500,000 shares of Reunion common stock if Chatwins achieves specified performance goals is 2000. The Reunion common stock currently held by Chatwins will be retired in the merger. After the merger, former Chatwins stockholders will own approximately 79.2% of the Reunion common stock outstanding, excluding the 500,000 contingent shares which ultimately may be issued.

All of the Chatwins preferred stock outstanding will be converted in the merger into new Reunion 10% redeemable Series A preferred stock, which will have an aggregate initial redemption value of approximately $8.8 million, assuming the merger occurs on Sept. 30, 1999.

The boards of directors of both companies and the holders of a majority of the Chatwins Group outstanding common stock have approved the amended merger agreement. Completion of the merger is subject to a number of conditions including (i) approval by the Reunion stockholders and (ii) obtaining financing in an amount sufficient to redeem Chatwins' $50 million 13% Senior Notes and to provide adequate working capital after the merger.

The merger is targeted for completion late in the third quarter of this year, although there can be no assurance as to whether or when all conditions to the merger will be satisfied or when the merger may be completed.

Chatwins has previously notified its warrantholders that its registration statement on Form S-1 filed with the SEC can not be used in connection with any resale of its warrants or shares of its common stock underlying the warrants. Any transactions in Chatwins' warrants or common stock into which the warrants are convertible continue to require compliance with Rule 144A or another exemption from the registration requirements of the Securities Act of 1933.

Chatwins Group Inc., through its manufacturing divisions, designs, manufactures and markets a broad range of fabricated and machined industrial products in a variety of industries. Chatwins files periodic reports in accordance with the Securities Act of 1934, as amended.

This press release contains forward-looking statements within the "safe harbor" provision of the Private Securities Litigation Reform Act of 1995 with respect to, among other things, Chatwins, the proposed Reunion-Chatwins merger, and the expected impact of the merger on Chatwins. These forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from the results contemplated by those forward-looking statements. Those risks and uncertainties include domestic and international economic conditions, the availability of financing on reasonable terms and other factors outside of the control of Chatwins. All forward-looking statements are qualified by these risks and uncertainties.