Hilco mum on the status of Sparrows Point mill

No comment on any potential interest by operators to reopen the idled Baltimore steel plant.

steelworkers at hall

Steelworkers jam into the Local 9477 union hall on Dundalk Avenue last August to hear about the sale of Sparrows Point to Hilco.

Photo by: Mark Reutter

The deadline for “initial indications of interest” for purchasing parts or all of the Sparrows Point steel mill passed yesterday, and the word from its current owner – relayed to The Brew – is “no comment.”

More than 1,500 workers have been waiting to see if the idled steel mill, once the world’s largest, has any chance of reopening.

“Hilco is not yet prepared to make a statement or comment at this time,” said Gary C. Epstein, chief marketing officer, this afternoon.

Hilco Industrial and a partner purchased the 120-year-old steel mill, located on Baltimore’s outer harbor, for $72.5 million in a bankruptcy auction last August.

In September, Hilco placed the closed mill up for sale, setting a November 12 deadline for prospective buyers to express interest in the property, followed by a bid deadline of December 21 and an auction, if necessary, on January 3, 2013.

The sale was instigated, according to Epstein, after a number of companies expressed interest in parts of the mill. “We’d like nothing more than to help get people back to work, if that’s possible,” Epstein said at the time.

The Waiting Game

Joe Rosel, president of the United Steelworkers (USW) Local 9477 representing Sparrows Point, also has vowed to find a “strategic” steel company to operate the mill.

Rosel has not made any public comment in recent weeks about his success in finding such a company, which would presumably enter into a contract with the USW, re-hire the workforce and start up the furnaces.

A union officer today accused Hilco of being “very uncooperative” in the union’s search of an industrial savior. The officer did not wish to be identified due to the sensitive nature of discussions with possible partners.

Since Hilco does not recognize the USW, former Sparrows Point employees are in limbo, not only without a job, but without an employer.

Bidders May Remove Equipment

In its sales material in September, Hilco said it will entertain bids on the entire mill, one or more production lines, or one or more components of the production lines.

Successful bidders may physically remove assets from Sparrows Point, including entire production lines, according to the bid documents.

Over the summer, several steel operators offered bids on Sparrows Point, including Brazil’s CSN and Mexico’s AHMSA. But their bids were not considered acceptable to RG Steel’s bank creditors. Hilco went on to win the auction in a joint venture with Environmental Liability Transfer (ELT), a St. Louis “brownfield” redeveloper.

Interest by Port

The 3,400-acre Sparrows Point peninsula, 10 miles southeast of downtown Baltimore, is owned by ELT, while Hilco owns the physical assets. A portion of the property, known as Coke Point, is under active review by the Maryland Port Administration for a dredge-containment facility.

The port authority is also eying the mill’s deepwater port as a possible site for a car-unloading facility. During its long heyday after World War II, when Sparrows Point employed up to 30,000 workers, its location as the country’s only tidewater steel plant was a major strategic advantage for its then-owner, Bethlehem Steel Corp.

Hilco bills itself as one of the world’s largest liquidators of industrial property. It is not a steel company and says it has no interest in operating Sparrows Point. 

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  • Dr. Raymond Boothe

    It was noted today that Ternium Steel (Argentina) has the lead in purchasing the ThyssenKrupp Plant in Culvert City, Alabama. Other bidders include Posco (South Korea) ArcelorMittal, Nucor and United States Steel. Over ten parties so far have shown interest in ThyssenKrupp’s North American assets estimated at 9 billion dollars. The Culvert City Plant is one of the most modern steel plants in the United States.

    • Nashorn

      Nobody’s showing interest at $9 billion or anywhere close. On Monday, Thyssen announced that it had written down the value of its Thyssen Americas unit by $4.6 billion, prompted by the bids coming in from the sales efforts – was $9 Bn, now $4.4 Bn. Cancelled their 2011-2012 dividend – BIG for a German company.

      Not Culvert City, Calvert City. 

      • Dr. Raymond Boothe

        Excuse the spelling error-The original estimate for Calvert City by TK was around 9.5 billion, but the average bidding proposals are coming in around 4.0 billion to 4.4 billion. Still a lot of money and still a lot of bidders. According to Bloomberg this morning Ternium Steel (Argentina) has taken the lead over Posco South Korea) in the bidding war. No exact figures have been made public.

        Anyway a worn out steel mill like SP is not going to pull in any such money. Hilco did not look at SP as an operating plant but as a salvage investment. If somebody wanted to operate it they would have purchased it all at the first auction. Hilco will be quite happy to sell the cold mill which will most likely recoup all of their original investment. Allowing someone else to operate the rest of SP on Hilco’s property is a losing investment.  

    • George

      If Culvert City has ten bidders then just think how many interested bidders a large mill like the Sparrows Point complex will have at the January auction.  Great to see so much rising interest our American steel mills!

  • funky1209

    Well folks of a 1190  if mingo restarts   ya have to reapply for ya job    hows that for a union  official  straight from the mouth of  1190  officials

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