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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8 - K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): November 25, 1997
NATIONAL STEEL CORPORATION
(Exact name of registrant as specified in its charter)
Delaware
(State or other jurisdiction incorporation)
1-983 25-0687210
(Commission File Number) (IRS Employer Identification No.)
4100 Edison Lakes Parkway, Mishawaka, IN 46545-3440
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: 219-273-7000
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ITEM 5. OTHER EVENTS
National Steel Corporation issued a press release on November 25, 1997
announcing that it has redeemed all of its Series B Preferred Stock held by
Avatex Corporation, formerly known as National Intergroup, Inc. and has
finalized a settlement with Avatex regarding certain employee benefit
liabilities associated with the Company's former Weirton Steel Division, as well
as certain environmental liabilities. A copy of this press release is attached
hereto as Exhibit 99.1.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
Exhibit 99.1 Press release dated November 25, 1997.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
NATIONAL STEEL CORPORATION
Date: December 1, 1997 By: /s/Michael D. Gibbons
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Michael D. Gibbons
Acting Chief Financial Officer
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News Release
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Media Contact: Leon L. Judd
(219) 273-7631
Analyst/Investor Contact: Joseph A. Rainis
(219) 273-7158
NATIONAL STEEL REDEEMS SERIES B PREFERRED STOCK
AND FINALIZES SETTLEMENT WITH AVATEX
Mishawaka, IN, November 25, 1997--National Steel Corporation (NYSE:NS) announced
today it has redeemed all of its Series B Preferred Stock held by Avatex
Corporation, formerly known as National Intergroup, Inc. The stock currently has
a book value of approximately $62 million. In addition, the Company has
finalized a settlement with Avatex regarding certain employee benefit
liabilities associated with the Company's former Weirton Steel Division, as well
as certain environmental liabilities. Avatex had previously agreed to indemnify
the Company with respect to these liabilities in connection with a series of
transactions occurring after 1984.
In 1990, Avatex made a prepayment of $146.6 million to the Company in exchange
for the Company's releasing Avatex of Weirton employee benefit liabilities of a
like amount. In addition, in 1994, Avatex made a $10 million prepayment to the
Company with respect to Avatex's future environmental indemnity obligations.
As a result of the redemption and settlement, the Company today made a payment
of $59 million to Avatex and will pay Avatex an additional $10 million, without
interest, in installments of $2.5 million each, in the first and second quarters
of 1998, and a third installment of $5 million one year following the closing.
As part of the settlement, National Steel will receive insurance proceeds of
approximately $17 million with respect to settlements of past and future
environmental claims, some of which were indemnified by Avatex. National Steel
will also retain the $9 million net balance of the environmental indemnity
prepayment previously made by Avatex.
Under its settlement with Avatex, National Steel will have responsibility for
the Weirton pension obligation, which is currently funded in excess of 95% when
measured on an accumulated benefit obligation basis and for which the Company
will have no immediate funding requirements, as well as other Weirton employee
benefit liabilities. National Steel has relieved Avatex from any future
indemnity obligation with regard to these Weirton employee benefit liabilities,
as well as the previously indemnified environmental liabilities.
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This transaction is expected to result in lower on-going costs to the Company
with respect to the continuing Weirton employee benefit obligations. These lower
costs and the elimination of approximately $7 million per year in dividend costs
will have a positive impact on future reported earnings per common share.
As a result of the redemption of its Series B Preferred Stock, NKK U.S.A.
Corporation, a subsidiary of NKK Corporation, will no longer have any obligation
to Avatex relating to a "put" agreement entered into in 1990 at the time such
preferred stock was issued. The lapse of this "put" with respect to the
Company's dividend and redemption obligations may result in imputed income to
NKK U.S.A. Corporation. The Company is obligated to make a payment of
approximately $1.4 million to NKK U.S.A. Corporation for related taxes.
All statements contained in this press release, other than historical
information, are forward-looking statements. A variety of factors could cause
business conditions and the Company's actual results and experience to differ
materially from those expected by the Company or expressed in the Company's
forward-looking statements. Additional information concerning these factors is
available in the Company's most recent report on Form 10-Q for the quarter ended
September 30, 1997.
Headquartered in Mishawaka, Indiana, National is the nation's fourth largest
integrated steel company, with annual shipments of approximately six million
tons of flat rolled products. National employs approximately 9,500 people. Visit
National Steel's website at: www.nationalsteel.com.
