FT. WAYNE, INDIANA — January 28, 1999 — Steel Dynamics, Inc.
(NASDAQ: STLD) announced today that several underwriters, together with
SDI, have been served with a Complaint filed in the United States
District Court for the District of Minnesota, Fourth Division, by IDS
Bond Fund, Inc. and four other affiliated purchasers in connection with
an underwritten private debt offering in March 1998 to fund the
expansion and completion of the facilities of the Nakornthai Strip Mill
Public Company Limited (“NSM”), a steel mini-mill in Chonburi, Thailand.
Plaintiffs allege that they were purchasers of U.S. $62 million of the
notes in the offering.
In their Complaint, which seeks rescission of their purchases and
monetary damages, Plaintiffs allege that the underwriters were
responsible for various misrepresentations and omissions in connection
with the offering. Plaintiffs also allege, however, that SDI, though
neither an underwriter of nor the issuer in the offering, is also liable
for these misrepresentations and/or omissions by reason of its
involvement in and statements allegedly attributed to it in the
pre-offering process.
SDI denies that it has any liability to Plaintiffs or to any other
note purchaser and will steadfastly defend itself in this litigation. It
is surprised and shocked that it has been named in this Complaint and
that its role with and relationship to NSM has been so mischaracterized.
SDI’s relationship with NSM was pursuant to a Management Advisory and
Technical Services Agreement, in which it was to have rendered periodic
job training services and operating know-how, and pursuant to a License
Agreement, under which it agreed to license certain of its mini-mill
technology to NSM. This role was never misrepresented in the Offering
Memorandum nor in any other manner by SDI.
In commenting upon the lawsuit, Keith Busse, SDI’s president and
chief executive officer, stated, “We believe that the Plaintiffs have
improperly misrepresented SDI’s role in the offering, but, even more
importantly, do not understand and clearly do not appreciate what SDI
did to assist NSM, over and above what it was obligated to do. We have
put some of our best people on site in Thailand to help maintain and
stabilize NSM through one of the most severe market dislocations in
steelmaking history and to render temporary assistance with everything
from middle and senior management to equipment design and configuration.
We trust that these matters will be clarified and better understood as
things develop.”
SDI terminated its two agreements with NSM and with NSM Management
Co. as of the end of December 1998, but is working closely with NSM and
will cooperate with all persons having any interest in NSM, to
transition to a new management advisory team and a new management
structure over the next several months. |