KEYSTONE CONSOLIDATED INDUSTRIES, INC. [LOGO GOES HERE]
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PRESS RELEASE
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FOR IMMEDIATE RELEASE CONTACT:
Keystone Consolidated Industries, Inc. Bert E. Downing, Jr.
5430 LBJ Freeway, Suite 1740 Vice President - Chief
Dallas, Texas 75240-2697 Financial Officer
(972) 458-0028 (972) 458-0028
KEYSTONE RECEIVES COURT APPROVAL OF ITS DISCLOSURE STATEMENT AND SCHEDULES
DATE FOR CONFIRMATION HEARING
DALLAS, TEXAS . . . July 11, 2005. . . Keystone Consolidated Industries,
Inc. (KESNQ.PK) announced that following a Disclosure Statement Hearing on June
24, 2005, the U.S. Bankruptcy Court for the Eastern District of Wisconsin in
Milwaukee has issued an Order that, among other things, approved the adequacy of
Keystone's Third Amended Disclosure Statement, established a plan objection
deadline of August 3, 2005, and scheduled a hearing on August 10, 2005, to
confirm Keystone's Third Amended Joint Plan of Reorganization.
Keystone's Third Amended Joint Plan of Reorganization provides for, among
other things:
o The assumption of the previously negotiated amendment to the collective
bargaining agreement with the Independent Steel Workers Alliance (the
"ISWA"), Keystone's largest labor union;
o Liabilities due to pre-petition secured creditors would be reinstated in
full against reorganized Keystone;
o All of Keystone's common and preferred stock outstanding at the petition
date would be cancelled;
o Pre-petition unsecured creditors of Keystone would receive, on a pro rata
basis, in aggregate, $5.2 million in cash, a $4.8 million note and 49% of
the common stock of reorganized Keystone (the amount of cash and principal
amount of the note may increase based on certain events);
o Certain operating assets and existing operations of Sherman Wire Company
("Sherman Wire"), one of Keystone's pre-petition wholly-owned subsidiaries,
will be sold at fair market value to Keystone, which will then be used to
form and operate a newly created wholly-owned subsidiary of reorganized
Keystone;
o Sherman Wire, and its pre-petition wholly-owned non-operating subsidiaries,
J.L. Prescott Company, and DeSoto Environmental Management, Inc. as well as
Sherman Wire of Caldwell, Inc., a wholly-owned subsidiary of Keystone, will
ultimately be liquidated and the pre-petition unsecured creditors of these
entities will receive their pro-rata share of the respective entity's net
liquidation proceeds;
o Pre-petition unsecured creditors of Keystone's wholly-owned pre-petition
subsidiary, FV Steel & Wire Company, would receive cash in an amount equal
to their allowed claims;
o One of Keystone's Debtor-In-Possession lenders, EWP Financial, LLC (an
affiliate of Contran Corporation ("Contran"), Keystone's pre-petition
majority shareholder) would convert $5 million of its credit facility,
certain pre-petition unsecured claims and certain administrative claims
into 51% of the common stock of reorganized Keystone;
o The Board of Directors of reorganized Keystone will consist of seven
individuals, two of which shall be designated by Contran, two of which
shall be designated by the Official Committee of Unsecured Creditors (the
"OCUC"), and the remaining three directors shall qualify as independent
directors (two of the independent directors shall be appointed by Contran
with the OCUC's consent and one shall be appointed by the OCUC with
Contran's consent); and
o The Plan of Reorganization assumes Keystone will obtain Bankruptcy Court
approval for agreements that have been reached with certain retiree groups
that will provide relief by permanently reducing healthcare related
payments to these retiree groups from pre-petition levels and such
agreement will be assumed by reorganized Keystone.
Confirmation of the Third Amended Plan of Reorganization remains subject
to, among other things, (1) the confirmation hearing on August 10, 2005, (2)
obtaining the requisite vote of Keystone's and its subsidiaries' various
creditor constituencies, (3) satisfying other confirmation requirements and
obtaining the related approval of the Bankruptcy Court and (4) obtaining
sufficient exit financing to refinance the balance of Keystone's
Debtor-In-Possession loans. Keystone has received term sheets from, and is
currently negotiating with, lenders interested in providing the necessary
financing to exit from bankruptcy. No assurances can be given that the
negotiations will result in Keystone receiving the necessary financing.
Keystone believes Bankruptcy Court approval of the adequacy of the Third
Amended Disclosure Statement and the scheduling of the August 10, 2005
confirmation hearing, represent the final major steps in Keystone's efforts to
complete a successful restructuring. Keystone and its advisors will continue to
work diligently in an effort to achieve its goal of exiting bankruptcy as soon
as possible.
As provided by the safe harbor provisions of the Private Securities
Litigation Reform Act of 1995, Keystone cautions that statements in this press
release relating to matters that are not historical facts are forward-looking
statements that represent management's beliefs and assumptions based on
currently available information. Forward-looking statements can be identified by
the use of words such as "believes," "intends," "may," "should," "could,"
"anticipates," "expected," or comparable terminology, or by discussions of
strategies or trends. Although Keystone believes the expectations reflected in
such forward-looking statements are reasonable, it cannot give any assurances
that these expectations will prove to be correct. Such statements by their
nature involve substantial risks and uncertainties that could significantly
impact expected results, and actual future results could differ materially from
those described in such forward-looking statements. While it is not possible to
identify all factors, Keystone continues to face many risks and uncertainties.
Among the factors that could cause actual future results to differ materially
are the risks and uncertainties discussed in this press release and those
described from time to time in the Keystone's other filings with the U.S.
Securities and Exchange Commission including, but not limited to:
o Future supply and demand for Keystone's products (including cyclicality
thereof),
o Customer inventory levels,
o Changes in raw material and other operating costs (such as ferrous scrap
and energy),
o General economic conditions,
o Competitive products and substitute products,
o Changes in customer and competitor strategies,
o The impact of pricing and production decisions,
o The possibility of labor disruptions,
o Environmental matters (such as those regulating emission and discharge
standards for existing and new facilities),
o Government regulations and possible changes therein,
o Significant increases in the cost of providing medical coverage to
employees and retirees,
o The ability to successfully obtain reductions in Keystone's operating
costs, including achieving relief from the current provisions of agreements
relative to healthcare with certain retiree groups,
o The ability of Keystone to successfully renegotiate the terms of certain of
its indebtedness,
o The ultimate resolution of pending litigation,
o International trade policies of the United States and certain foreign
countries,
o A successful reorganization and exit from the bankruptcy process,
o Any possible future litigation, and
o Other risks and uncertainties as discussed in this press release.
Should one or more of these risks materialize (or the consequences of such
a development worsen), or should the underlying assumptions prove incorrect,
actual results could differ materially from those forecasted or expected.
Keystone disclaims any intention or obligation to update or revise any
forward-looking statement whether as a result of new information, future events
or otherwise.
Keystone Consolidated Industries, Inc. is headquartered in Dallas, Texas.
The company is a leading manufacturer and distributor of fencing and wire
products, wire rod, industrial wire, nails and construction products for the
agricultural, industrial, construction, original equipment markets and the
retail consumer. Keystone's common stock is traded under the symbol: KESNQ.PK.
Up to date information concerning the bankruptcy case, copies of Bankruptcy
Court filings and orders issued by the Bankruptcy Court may be found at
http://www.kccllc.com .
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