Feedback

Several groups emerge as potential buyers of Sparrows Point

Brazil's CSN is among the potential foreign buyers of the bankrupt steel mill, sources say. (UPDATE: Nucor identified as domestic bidder.)

victory rally 1942

A World War II Victory Rally at Sparrows Point. The now-shut steel mill may get a new lease on life.

Photo by: Hagley Museum and Library

(UPDATE on Thursday, 7/26, 7 a.m.: Sources tell The Brew that the domestic steelmaker who filed bidding papers yesterday for the purchase of Sparrows Point is Nucor. Please note that this is a preliminary step, subject to change among all of the parties, as the Chapter 11 sales process moves forward.)

At least three companies, two from overseas, filed papers by today’s deadline as potential buyers of Sparrows Point, giving the first concrete evidence that steelmaking may return to the plant where 1,500 workers are laid off.

Sources identified the two foreign bidders as CSN, the Brazilian steelmaker, and Optima Fund Management, a hedge fund associated with Metinvest, a Ukrainian mining group. A domestic steel company also submitted a bid for Sparrows Point’s assets by today’s deadline.

Each of these concerns say they want to restart operations at the Point, which were closed two months ago after owner RG Steel filed for Chapter 11 bankruptcy.

Today was the deadline for submission of qualified bids for assets owned by RG Steel.

In addition, there were one or more bids placed on returning RG Steel mills at Warren, Ohio, and Wheeling, W.Va. to full or partial operation, sources reported.

Altogether, more than 18 groups submitted bids for one of the three steel mills, with many of these bids from scrap dealers and related companies who seek RG Steel’s physical assets, such as machinery and raw materials, and do not plan on restarting the facilities.

The Sparrows Point Steelworkers Local 9477 had pinned its hopes on CSN, which had blown hot and cold over the purchase of Sparrows Point even before RG Steel filed Chapter 11 bankruptcy on May 31.

CSN engineers visited the plant, which would help the company gain greater entry into the American steel market and also serve as an outlet for tin plate, a mill specialty, for sale in South America.

The Optima Fund/Metinvest group had sought to purchase Sparrows Point from Severstal in 2011. It was rebuffed by the Steelworkers union who favored Ira Rennert, the billionaire owner of RG Steel, which racked up more than $440 million in operating losses before it filed for bankruptcy.

Seeking a Stalking Horse

Under the rules approved for the asset sale, a potential buyer had to submit a bid by noon today to qualify, along with a cash deposit of 2% of the proposed purchase price.

RG Steel has until next Monday to designate a leading or “stalking horse” bid or bids. This will establish a base line for the sale of the three plants and will enable the potential buyer to negotiate with the United Steelworkers union over successor agreements for a labor contract.

A final auction of the properties would take place on August 21.

If no stalking horse is identified, an auction for the properties would be held on July 31 in the law offices of Willkie, Farr & Gallagher in Manhattan

All parties had signed confidentiality agreements prior to today’s bid deadline.

A spokesperson for RG Steel did not respond to an email request for comment tonight. Officers of Sparrows Point Local 9477 USW could not be reached.

Be sure to check our full comment policy before leaving a comment.

  • Fordtrkfan

    Still nothing! …………….Waiting…………

  • Reality

    Isn’t there supposed to be some type of announcement today?

  • FAST FOOD WORKER 9477

    time to look for a job NOW !!!

  • Nashorn

    Stalking horse bidder(s) supposed to be announced. See Breaking News: No announcement: bit.ly/R0OBNw

    I don’t know how firm that 5 PM deadline is, so I wouldn’t jump off the Bay Bridge; otherwise it’s auction time tomorrow.

    In some respects I think it might be better to just let everyone bid and see where the chips fall.

    • Fordtrkfan

      ……that’s all folks! Insert looney tunes theme here! That’s what it almost seems these days, one big cartoon that doesn’ end well for Wil E Coyote!

  • RRS

    The place has great potential and is in a great location, from my understanding (if I,m not mistaken) all the wrokers there have agreed to their jurisdictions of work, if I can see the potential of the place I hope the buyers can also, all it takes is good stewardship from the buyer, I know the one company looking at the place (I will say no names) would be excellent as they have acces to their own ore and would,nt even need to worry about ore cost, just shipping cost only, I hope they get it together and and get the place, as I said before it,s a Sparrows Point is an excellent place to work and you would be hard-pressed to find another great job like that anywhere around Baltimore, let,s hope they get it all together and so we can all get the “phone call” we,re waiting for, you know the call that says come back to work, what a nice sound that is, at least I think so, how ’bout you????

    • Steelman

      your nuts, its the pollution capital of the usa.

  • Mickey 111

    you wont  hear  nothing  for  weeks…n   it  has  to  go  by  the  union…it’ll  be  weeks….

    • Steelman

      what union? even if you can find the union (there hiding)they have nothing to say! they caused this with all there bad decisions over the last four years!

  • FASTFOOD WORKER 9477

    WHERE  IS THE UNION AT  ARE THEY WORKING HARD  BEHIND CLOSED DOORS WITH A BIG PLAN TO SAVE SP  JUST PRICELESS

More of the Daily Drip »

Below the Fold

  • March 24, 2014

    • Last Thursday, I sent an email to the Mayor’s Office of Communications asking for some basic responsiveness: Please return our emailed queries and phone calls about stories. Please send us the same routine emails you send to other members of the media. Lately, more so than usual, they haven’t been. It’s a shame because, even [...]

Twitter

Facebook