Deconsolidated US companies file amended Plans of Reorganization (ad hoc)

16. September 2005

In 2002, US members of the RHI group filed for bankruptcy protection under Chapter 11. This included North American Refractories Company (NARCO), Global Industrial Technologies (GIT), A.P. Green Industries (APG) and Harbison-Walker Refractories Company (H-W).

RHI, several RHI affiliates and various US companies operating under Chapter 11, including NARCO and GIT, had reached settlement agreements in April 2004 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. These 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 additional burdens on the results will arise from these agreements for RHI. A condition to the NARCO 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.

On September 15, 2005, the US-Chapter 11 companies filed amended Plans of Reorganization (PoR). The PoR filed by these companies incorporate the above mentioned settlement agreements. RHI and the parties involved in the Chapter 11 proceedings are currently reviewing the PoR.

If the court gives its approval, RHI AG and its affiliates will receive protection with respect to all remaining asbestos claims against the debtor companies in the USA on the basis of these settlement agreements and provide, among other things, that RHI AG and its affiliates will be beneficiaries of the channeling injunctions of the plans of reorganization.

The implementation of all above mentioned agreements can be effected as soon as the court in Pittsburgh approves the settlement agreements and the debtors’ PoR within the Chapter 11 proceedings. Therewith all present and future asbestos claims against the deconsolidated US companies would finally be resolved with legal security.