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OREGON STEEL PURCHASES STEELMAKING ASSETS OF CF&I STEEL

 PORTLAND, Ore., March 5 /PRNewswire/ -- Oregon Steel Mills Inc. (NYSE: OS) announced that it has completed the purchase of substantially all the assets of CF&I Steel Corp. ("CF&I") and certain of its subsidiaries.
 The assets were acquired by a partnership, CF&I Steel L.P. ("Partnership"). The general partner, which owns 95.2 percent, is a wholly owned subsidiary of Oregon Steel; the sole limited partner is the Pension Benefit Guaranty Corp. (PBGC), which owns a 4.8-percent profits interest. The purchase price paid, or to be paid, by the Partnership for the assets of CF&I is as follows:
 -- Cash, which is to be not more than $15 million, nor less than $1 million, subject to closing adjustments as discussed below;
 -- Installment cash payments totalling $67.5 million over 10 years, plus interest at 9.5 percent per annum to specified creditors of CF&I which may also be subject to closing adjustments;
 -- Assumption by the Partnership of $18.5 million of post bankruptcy petition liabilities of CF&I;
 -- Delivery to specified creditors of CF&I, 10 years from closing date, of 598,400 shares of Oregon Steel common stock;
 -- Delivery following closing to specified creditors of CF&I of warrants to purchase for five years, 100,000 shares of Oregon Steel common stock at $35 per share.
 The cash portion of the purchase price is subject to a purchase price adjustment based on inventories, accounts receivable and prepaid expenses at closing. If the purchase price adjustment indicates that the cash portion of the purchase price should exceed $15 million, any such additional amount will be added to the installment cash payments mentioned above. If the purchase price adjustment results in a determination that the cash portion of the purchase price is less than $15 million and exceeds, or is less than the estimated amount actually paid at closing, a cash payment equal to such difference will be paid or refunded within 90 days following closing.
 Oregon Steel has agreed to guarantee the payment of the first 25 months of installment cash payments referred to above (a total of approximately $21.8 million of principal and interest) and the performance of certain capital expenditures for improvements at the facilities being acquired by the Partnership in the aggregate amount of $40 million.
 The Partnership plans to spend over $160 million to upgrade the steelmaking process, including a new DC arc furnace, ladle metallurgy station, vacuum degassing, and upgrades to a caster: installation of a new rod train and installation of in-line head hardening for the rail mill. Bids for the capital improvements are scheduled for April, with construction expected to begin by late summer.
 The Partnership is expected to ship over 500,000 tons during 1993 of rail, rod, bar, wire and tubular products. After completion of the capital projects, shipments are expected to exceed 700,000 tons. The capital improvements should lower costs, improve quality and allow the Partnership to be more competitive.
 Oregon Steel Mills produces steel plate and pipe from plants located in Portland; Fontana and Napa, Calif.; and Camrose, Alberta. The addition of the assets of CF&I provides the company with manufacturing capacity in steel rail, rod, bar and tubular products from its Pueblo, Colo., plant.
 -0- 3/5/93
 /CONTACT: Vicki Tagliafico of Oregon Steel Mills, 503-240-5226/
 (OSM)


CO: Oregon Steel Mills Inc.; CF&I Steel Corp.; CF&I Steel L.P.; Pension
 Benefit Guaranty Corp. ST: Oregon, Colorado IN: MNG SU: TNM


LM -- SE006 -- 3610 03/05/93 17:12 EST
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Publication:PR Newswire
Date:Mar 5, 1993
Words:590
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