Ivaco Completes Sale of Atlanta Property

23 December 1999

Ivaco Completes Sale of Atlanta Property

    MONTREAL--Dec. 22, 1999-- Ivaco Inc. (TSE:IVA.A.) (TSE:IVA.B.) announces the closing of the sale of its 136-acre property in midtown Atlanta, Georgia. The property owned by Ivaco's wholly-owned subsidiary Atlantic Steel since the early 1900's was sold for US$74.9 million (Cdn$110.9 million) to Jacoby Atlantic Redevelopment L.L.C. and AIG Global Real Estate Investment Corp. The purchaser plans to develop the property into a retail, office, entertainment, residential and hotel mega complex.
    Proceeds of the US$74.9 million (Cdn$110.9 million) sale price include US$17 million (Cdn$25.2 million) in cash and the balance in notes secured by a first priority mortgage on the property. The notes are payable on December 15, 2000 but may be extended to:

(i) 60 days after the developer receives appropriate zoning
    approvals; and,

(ii) in any event the notes are payable no later than December 14,
    2001. The notes bear interest at 7 1/2 % per annum after December
    15, 2000.

    Atlantic Steel will remain responsible for the costs of environmental remediation based on a phase 2 environmental assessment completed earlier this year and recently approved by the Environmental Protection Division of the Georgia Department of Natural Resources. The developer has further agreed to undertake approximately US$5 million of remediation costs which will be spent during the coming months. This amount will be deducted from the balance owing at maturity of the notes. Total costs of remediation and demolition of buildings on the property have been estimated at US$10 million and Ivaco has obtained environmental CAP insurance to cover cost overruns.
    Paul Ivanier, President and Chief Executive Officer of Ivaco said, "We are very pleased that this transaction, which was originally announced in May 1997, has finally been concluded and is a win-win deal for both the purchaser and the seller. By closing the transaction prior to completion of the environmental remediation, it has provided the purchaser with an opportunity to accelerate the schedule for development of the property than otherwise would have been possible. On the other hand Ivaco has benefited by bringing the transaction to closure".
    Ivaco will record a substantial gain on the sale of the property in the fourth quarter of 1999. The gain is estimated to be approximately Cdn$50 million after deducting the costs of the estimated remediation, other costs associated with the transaction and after income taxes.
    Ivaco is a Canadian corporation and is a leading North American producer of steel, fabricated steel products and precision machined components. Ivaco has operations in Canada and the United States. Shares of Ivaco are traded on The Toronto Stock Exchange (IVA).