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13.04.2004 – 08:03

RHI Magnesita

euro adhoc: RHI AG
RHI reaches important settlement agreements regarding US Chapter 11 proceedings (E)

  Disclosure announcement transmitted by euro adhoc.
  The issuer is responsible for the content of this announcement.
RHI and several RHI affiliates have entered into settlement
agreements with the previous owners of certain former affiliated US
companies and the companies themselves, which have been operating
under Chapter 11 of the US Bankruptcy Code since the beginning of
2002. These settlement agreements, which were filed with the
competent Bankruptcy Court in Pittsburgh, represent important steps
to resolve open issues and legal disputes, among other things related
to the acquisition of Global Industrial Technologies, Inc. ("GIT") in
the year 1999 and the related Chapter 11 proceedings. All agreements
reached are subject to the approval by the court in Pittsburgh.
The agreements include the following central issues:
RHI and DII Industries ("DII") have agreed to settle their legal
disputes about an agreement made in the year 2002 regarding further
payments in the context of the Chapter 11 proceedings of
Harbison-Walker. In December 2003, DII initiated voluntary Chapter 11
proceedings in accordance with the US Bankruptcy Code and presented a
plan of reorganization, which, among other things, provided for the
establishment of trust funds for asbestos and silica-based claims
against Harbison-Walker and permanent channeling injunctions in
accordance with Sections 524(g) and/or 105 of the US Bankruptcy Code
with respect to such claims. If the settlement agreement is approved,
the DII plan of reorganization will be amended to provide, among
other things, that RHI AG and its affiliates will be beneficiaries of
the channeling injunctions contemplated by the DII plan of
reorganization. If the Bankruptcy Court approves the agreement, DII
will pay USD 10.0 million to RHI Refractories Holding and, on behalf
of the RHI companies, USD 1.0 million to the asbestos and silica
trusts.
RHI, several RHI affiliates and various US companies operating under
Chapter 11, including North American Refractories Company (NARCO) and
GIT, also have reached agreements to settle all mutual prepetition
claims, including those arising from receivables, payables, bank
guarantees, liabilities and tax issues arising out of the debtors’
affiliation with RHI.  If the settlement agreements are approved, the
plans of reorganization of the US companies will be amended to
provide, among other things, that RHI AG and its affiliates will be
beneficiaries of the channeling injunctions of the plans of
reorganization. The agreements regulate the handling of bank
guarantees and liabilities as well as RHI’s relinquishment of
prepetition operating receivables from the US debtor companies and
the relinquishment of all shares in the US debtor companies in the
course of the Chapter 11 proceedings. As RHI wrote down all accounts
receivable and book values of investments affected in the financial
statements of 2001, no burdens on the results will arise from these
agreements for RHI.  A condition to the settlement agreement is a USD
60 million payment by Honeywell International Inc. to RHI
Refractories Holding under a prior contract related to NARCO’s
Chapter 11 filing.
If the court gives its approval, RHI and its companies will receive
protection with respect to all asbestos claims against the debtor
companies in the USA on the basis of the settlement agreements
reached now. In addition, litigation issues with Halliburton will be
resolved and further uncertainties arising from risks and payment
agreements related to the Chapter 11 proceedings can be eliminated.
The implementation of all settlement agreements can be effected as
soon as the court in Pittsburgh gives its approval to the settlement
agreements and to the debtors’ reorganization plans within the
Chapter 11 proceedings. From today’s perspective, this should be
possible in the year 2004.
end of announcement        euro adhoc 13.04.2004

Further inquiry note:

RHI AG
Investor Relations
Markus Richter
Telefon: +43/0502 13 - 6123
Fax: +43/0502 13 - 6130
mailto: markus.richter@rhi-ag.com

Branche: Refractories
ISIN: AT0000676903
WKN: 067690
Index: ATX Prime
Börsen: Wiener Börse AG / official dealing