Metallurg

August 18, 2004

      Compass Advisers, LLP ("Compass") provided financial advisory services to Metallurg, Inc. and Metallurg Holdings Inc. (collectively, "Metallurg") during its out-of-court restructuring.  Metallurg is a leading international producer and seller of high-quality specialty metals, alloys and metallic chemicals essential to the production of high-performance aluminum and titanium alloys, specialty steel, superalloys and certain non-metallic materials for various applications in the aerospace, power supply, automotive, petrochemical processing and telecommunications industries.  Metallurg sells approximately 50 different product groups to over 1,500 customers worldwide (primarily in North America and Europe).

      The steel industry experienced strong demand in 2004, particularly in China and the United States, and substantial price increases resulted from speculation plus the depletion of certain raw material stockpiles (such as vanadium pentoxide and ferrovanadium).  Metallurg required financial advisory services to address these market conditions and position the company for continued growth.

      Compass provided strategic advice to Metallurg, analyzing the company's business operations, financial condition and projections and evaluating its debt capacity, prospects and strategic objectives.  Our professionals developed a general strategy and tactics for accomplishing a reorganization, and developed an appropriate capital structure for the company on a restructured basis.  In addition, Compass assisted in the negotiations for new financing that helped Metallurg achieve its strategic goals.  With Compass' assistance, Metallurg secured private investments in the company and avoided filing for Chapter 11 bankruptcy.