Exhibit 99.3
FOR IMMEDIATE RELEASE
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REPUBLIC ANNOUNCES FINANCING AGREEMENT IN PRINCIPLE FOR ASSET SALE PLAN
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FAIRLAWN, Ohio - May 17, 2002 -- Republic Technologies International
LLC, the nation's leading supplier of special bar quality steel, today announced
that RTI Acquisition Corp. (RAC) has secured a new equity partner and an
agreement in principle with Republic's existing bank group to finance its
transaction. RAC is the company with which Republic has signed a letter of
intent to sell its primary assets.
RAC's new equity partner is Xxxx Investment Group, L.P. of Dallas,
Texas. Republic's bank group is agented by Fleet Capital, X.X. Xxxxxx Xxxxx and
Bank of America. RAC's agreement in principle for financing with the bank group
also extends financing for Republic to permit the sale to RAC to be completed.
RAC now has concluded significant agreements concerning the transaction
with Republic, Republic's bank group and Republic's hourly employees as
represented by the United Steelworkers of America. These agreements will clear
the way for the completion of the bankruptcy process and the sale of the
company's primary assets.
"As we had expected, KPS Special Situations Fund was able to secure a
replacement investment partner to proceed with its acquisition," said Xxxxxx X.
Xxxxxxxx, Republic's president and chief executive officer. "This again
demonstrates the value that exists in Republic's business. The agreement in
principle on new financing is an important step in Republic's effort to emerge
from Chapter 11 stronger than ever. This will facilitate the business plan
developed by RAC, which represents the best course for serving our creditors and
customers, saving jobs, protecting our suppliers and benefiting the communities
where Republic operates."
The U.S. Bankruptcy Court in Akron, Ohio, has set a tentative date of
Tuesday, May 21 for a status conference on the sale.
According to the letter of intent signed by RAC and Republic, the
transaction is valued at significantly in excess of $450 million. RAC will
operate the facilities it expects to acquire under a newly negotiated contract
with the United Steelworkers of America. The agreement between RAC and the USWA
is credited with facilitating the transaction.
RAC expects to operate Republic's primary steelmaking facilities in
Canton and Lorain, Ohio, as well as many of its other facilities. In all, the
investors propose hiring approximately 2,500 of Republic's nearly 4,000
employees.
Xxxx Investment Group, L.P.,(xxx.xxxxxxxxxxxxxx.xxx) is a private
investment company focused on middle-market direct investments in a variety of
industries including manufacturing, distribution, and business services. The
group proactively seeks growth capital and management buyout investments
requiring up to $50 million of invested equity. Xxxx Investment Group, L.P.
typically seeks majority or significant minority positions in U.S.-based
companies. Xxxx Investment Group, L.P. is affiliated with Xxxx Consolidated,
Inc., a privately held family enterprise directed by Xxx X. Xxxx with global
operations in oil and gas, residential and commercial real estate, electric
power, agriculture and private equity investing.
KPS Special Situations Fund, L.P. (xxx.xxxxxxx.xxx) is a $210 million
private equity fund focused on constructive investing in turnarounds,
restructurings, bankruptcies and other special situations. Based in New York,
KPS seeks to realize significant capital appreciation by making controlling
equity investments in companies engaged in manufacturing, transportation and
service industries challenged by the need to effect immediate change. This
transaction would be the fourth bankruptcy-related acquisition completed by KPS
in two years.
Republic Technologies International, based in Fairlawn, Ohio, is the
nation's largest producer of high-quality steel bars. With nearly 4,000
employees and 2001 sales of approximately $1 billion, Republic was included in
Forbes magazine's 2001 and 2000 lists of the largest U.S. private companies.
Republic has plants in Canton, Massillon, and Lorain, Ohio; Beaver Falls, Pa.;
Chicago and Xxxxxx, Ill.; Xxxx, Ind.; Lackawanna, N.Y.; Cartersville, Ga.; and
Xxxxxxxx, Ont. The company's products are used in demanding applications in the
automotive, agricultural, aerospace, off-highway, industrial machinery and
energy industries.
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