OREGON STEEL HEADLINESSteel Producers /
Oregon Steel
Oregon Steel Announces Final Settlement of Labor Dispute Agreement
Sep. 15, 2004 Oregon Steel Mills, Inc. has finalized settlement of the labor dispute at its majority-owned CF&I Steel LP, now doing business as Rocky Mountain Steel Mills (RMSM).
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Proposed Common Stock Offering
Oregon Steel Mills also announced that it has filed a registration statement on Form S-3 with the U.S. Securities and Exchange Commission relating to a proposed public offering of 7,500,000 shares of its common stock and an additional 1,125,000 shares that may be purchased by the underwriters to cover over-allotments. All of the shares will be issued and sold by the company.
The company intends to use the net proceeds from the offering to satisfy the obligation in connection with the Settlement of the labor dispute, to construct a spiral weld pipe mill at an estimated cost of $35 million, for general corporate purposes, and for other uses.
A registration statement relating to these securities has been filed with the SEC but has not yet become effective. Securities may not be sold under this registration nor may offers to buy be accepted prior to the time the registration statement becomes effective.
The company cautions that this announcement does not constitute an offer to sell or solicitation of an offer to buy, and that there shall be no sale of these securities in any state in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state.
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The finalized settlement ends a labor dispute that has been ongoing for more than six years between RMSM and the United Steelworkers of America and implements new five-year collective bargaining agreements.
The settlement was conditioned on, among other things, (1) its approval by stockholders of New CF&I, Inc., a majority-owned subsidiary of Oregon Steel Mills and the general partner of RMSM; (2) ratification of new collective bargaining agreements between RMSM and the Union; (3) approval by the National Labor Relations Board (NLRB) and the dismissal of cases pending before the NLRB related to the labor dispute; and (4) various pending legal actions between the company, New CF&I and RMSM and the Union being dismissed.
The settlement resulted in the dismissal of all court actions between the company and the union and the NLRB's issuance of an Order Withdrawing Complaints and Conditionally Approving Withdrawals of Charges related to the labor dispute. The settlement includes ratification of new five-year collective bargaining agreements at RMSM. The settlement called for establishment of a trust and on September 10, 2004, the Rocky Mountain Steel Mills — United Steelworkers of America Back Pay Trust was established. As part of the tentative settlement, the company, on behalf of RMSM, had originally planned to issue four million shares of company common stock to the Trust. On September 10, 2004, the parties agreed instead that the Trust would receive cash in an amount equal to the gross proceeds from the sale of four million shares of company common stock in an underwritten stock offering. The company, after consultation with the Union, will determine the price at which the four million shares of common stock will be sold in the offering.
As in prior quarters, the company will continue to adjust the Settlement charges for the change in the price of common stock through the date of pricing of the offering. In addition, as previously disclosed, the Settlement includes an early retirement option with immediate enhanced pension benefit for certain bargaining unit employees, based on seniority. As employees accept the early retirement benefits, the company expects to record an additional charge during the remainder of 2004 estimated at approximately $6.8 million related to these benefits. The enhancements to pension and post retirement medical benefits for non-early retirees will be accounted for prospectively on the date at which plan amendments occur pursuant to the new five-year collective bargaining agreements in accordance with SFAS No. 87 and SFAS No. 106.