Search
AMM.com Copying and distributing are prohibited without permission of the publisher
Email a friend
  • To include more than one recipient, please separate each email address with a semi-colon ';', to a maximum of 5

  • By submitting this article to a friend we reserve the right to contact them regarding AMM subscriptions. Please ensure you have their consent before giving us their details.


Would-be buyers hoped to operate RG: union

Keywords: Tags  Sparrows Point facility, RG Steel, Hilco Trading, Sherman International, Jindal Steel & Power, Severstal, Seaport Group, bankruptcy auction Chris Prentice


NEW YORK — At least two parties were said to have expressed an interest in buying and operating parts of the former RG Steel LLC Sparrows Point, Md., steelmaking facility prior to the sale of one of its top assets earlier this quarter.

A United Steelworkers union official confirmed to AMM that two groups had expressed interest in operating at least some of Sparrows Point’s production facilities before news broke that Nucor Corp. had bought equipment from the site’s cold mill for parts (amm.com, Dec. 12).

According to the union official, one interested party was Pittsburgh-based iron and steel equipment supplier Sherman International Corp.

The union official declined to comment further, but AMM has been told that Sherman had submitted a letter indicating initial interest by a Nov. 12 deadline set by auction firm Hilco Trading LLC, which purchased the entire Sparrows Point complex and land with Environmental Liability Transfer Inc. for $72.5 million at the bankruptcy auction (amm.com, Aug. 16).

Had it bid for and won the assets, Sherman had intended to operate at least portions of the facility, sources familiar with the situation said. The company was said to have been planning to submit a formal bid by Dec. 21.

Sherman had also considered partnering with New Delhi-based Jindal Steel & Power Co., sources said. Sherman declined to comment, while Jindal didn’t return AMM’s calls.

The union official said the other interested group was led by a former Severstal North America Inc. executive and organized by Seaport Group LLC, the New York investment bank hired to facilitate the bankruptcy auction after RG Steel filed for Chapter 11 protection in May (amm.com, May 31). Seaport Group didn’t respond to a request for comment.

Gary C. Epstein, chief marketing officer at Hilco Trading, declined to comment on specific companies reportedly interested in the assets but told AMM the company did not deny any interested parties the opportunity to bid.

“The rumors that Hilco rejected or dismissed any offers or interested parties to acquire part or all of the Sparrows Point mill without review or consideration are simply unfounded. All interested parties were put through a fair due diligence process and all qualified parties were seriously considered,” he said in an e-mail. 

Talk that at least two companies had been planning to make a play for the assets comes just one week after Charlotte, N.C.-based Nucor bought a portion of the cold mill complex—including the pickler, tandem mill and parts of the annealing furnaces—for parts and upgrades at its existing facilities.

The cold mill has been highlighted as one of the most attractive parts of the facility, with market players suggesting the rest of the assets will be hard-pressed to find a buyer if the state-of-the-art cold mill isn’t part of the package (amm.com, Dec. 13).

As a result, some market players have called Nucor’s move a strategic one, since it could keep a competitor out of the market for good.

But Nucor president and chief operating officer John Ferriola told AMM that taking out a possible competitor wasn’t the steelmaker’s motivation.

"Sparrows Point operated in our territory for 30, 40 years, so we’re used to that," he said when asked about possible competition from a new operator. "We were there for the last 25 years, we competed with them and we never fear competition."

Ferriola said that he was unaware if there were any other bids for any or all of the Sparrows Point facility, but noted that the equipment fit Nucor’s needs for upgrades at its existing mills.

"We saw an opportunity to buy parts and equipment at a reasonable price," he said Wednesday.

The remaining production assets, which had originally been scheduled to go to auction Jan. 3 alongside the cold mill, will now be sold through a private, negotiated sale process, Hilco said last week.


Have your say
  • All comments are subject to editorial review.
    All fields are compulsory.



Latest Pricing Trends