WHEELING, W.Va. (AP) -- Steelmaker and distributor Esmark Inc. has agreed to pay India's Essar Steel Holdings a $20.5 million fee if Essar's proposed $670 million buyout offer fails.
The fee, which was not mentioned in last week's announcement of the deal, is contained in a filing with the Securities and Exchange Commission.
The United Steelworkers, which must approve any change in ownership along with regulators, has yet to weigh in on the deal. But union leaders have said they have too little information to either endorse or oppose the buyout, valued at $1.1 billion when Esmark's debt is included.
Esmark last year bought twice-bankrupt Wheeling-Pittsburgh Corp., which has steel plants in West Virginia, Pennsylvania and Ohio. Formerly headquartered in Illinois, the newly merged company employs 3,700 people.
Esmark says it needs a strategic partner to overcome spiraling raw materials and transportation costs, difficulty securing long-term credit and investment challenges.
The SEC filing also suggests Wheeling-Pitt's $219 million verdict in a breach-of-contract case against Massey Energy Co., the nation's fourth-largest coal producer by revenue, cannot be settled while the deal is pending. Massey's appeal is to be heard by the state Supreme Court.
The document filed with the SEC bars Esmark from settling any claim involving more than $500,000.
