RHI capital restructuring not affected by Chapter 11 cases in the USA (ad hoc)

15. February 2002

Global Industrial Technologies, Inc. (GIT), A.P. Green Industries Inc., Harbison Walker Refractories Co. and further companies under the umbrella of RHI Refractories Holding Company in the USA filed for bankruptcy protection under Chapter 11 on February 14, 2002. The management of the above companies has decided to initiate a reorganization under Chapter 11 in order to effectively counteract the growing number of asbestos claims and the increasingly incalculable amounts involved.

RHI AG had announced on January 14, 2002 that it would divest of all companies comprised in RHI Refractories Holding Company, and deconsolidated them retroactively as of December 31, 2001.

The management of the affected US companies is confident to achieve a successful reorganization of the refractories business in the USA through a consistent focus on economically sound business structures. The basis of the reorganization under Chapter 11 is a so-called Debtor-in-Possession-financing (DIP) in the amount of USD 35 million, which is provided by a third party to secure the future financial obligations of the US companies. North American Refractories Company (NARCO), which introduced the reorganization as early as January 7, 2002, has additionally been promised an external DIP in the amount of USD 20 million.

Thus, no further financial obligations will arise for RHI AG from the Chapter 11 proceedings of the deconsolidated US companies; the successful implementation of the US reorganization will be secured by the US management.

RHI will thus be able to continue the capital restructuring announced on January 14, 2002, as planned without any further financial obligations the USA. The convertible bond, which requires a vote in this context, will be resolved on at an extraordinary general meeting of RHI AG on February 15, 2002.