Stelco cuts new deal with Deutsche Bank

Stelco Inc., Algoma Steel's biggest competitor, has cut a new financing deal that allows it to work around its recent loss of a General Motors contract.

The following is a company news release:

********************** Stelco announces it has negotiated amended Deutsche Bank commitment

HAMILTON, ON, Nov. 24 - Stelco Inc. (TSX:STE) today announced that it has successfully negotiated Commitments from Deutsche Bank and its affiliates to replace the Commitments previously announced that depended on a General Motors contract.

Stelco's Board of Directors unanimously approved the Company entering into the revised Commitments with Deutsche Bank.

The financing includes an asset-based loan facility co-underwritten by Deutsche Bank AG and CIT Business Credit Canada, for which Deutsche Bank Securities Inc. will act as Lead Arranger. Other than not requiring the General Motors contract, the new Commitments provide for certain assurances to be given with respect to several other large customer contracts, and the removal of the provision relating to a management equity plan.

Courtney Pratt, Stelco's President and Chief Executive Officer said, "We have worked very hard with Deutsche Bank to produce a new financing proposal in the absence of a supply contract with General Motors, and are very pleased that we have been able to come to a positive outcome so quickly.

This shows how supportive the Bank and other bondholders are for an exit from CCAA for the Company.

They obviously believe our exit is possible and should be supported.

Hopefully other stakeholders and our unions will see it that way as well and will support this opening bid which others are free to top. "Having the Deutsche Bank Commitments in place are in the best interest of the Company. Our board has confirmed that late yesterday. We will be seeking Court approval for the Deutsche Bank solution tomorrow. If approved by the Court, the Deutsche Bank Commitments will become the benchmark against which subsequent proposals would be evaluated." Hap Stephen, Stelco's Chief Restructuring Officer added, "The existence of a clear strong bid from Deutsche Bank will open the way for a broader based capital raising process which we will be seeking approval for on Thursday.

Others now know how valuable the business is and will have to act in a clear and decisive way to better this very good refinancing plan. They will have a chance to do so in a Court approved capital raising process that will be overseen by the Monitor appointed by the Court."

Stelco will be seeking approval of the revised Deutsche Bank commitment letters on November 25, 2004.

The Company will be filing additional materials with the Ontario Superior Court of Justice for the hearing.

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