RG Steel Sparrows Point & Warren Sold to Liquidators
Steel Market Update (SMU) sources have identified two liquidators (acquisition & disposal companies) as the winning bidders for the assets of RG Steel Warren and Sparrows Point fully integrated steel mills.
According to an article in the Baltimore Brew published earlier this morning, union officials have informed steelworkers the winning bidder for RG Steel Sparrows Point is Hilco Industrial – a liquidation company. The Brew reported the winning bid for the $1 billion (book value) mill as being $72 million.
Joe Rosel, president of USW Local 9477, said there was no mill bidder for the assets of Sparrows Point or Warren.
The Sparrows Point mill has one of the largest blast furnaces in North America rated at approximately 9,000 tons per day of melt. The mill capacity was approximately 3.0 million tons although it was not operating anywhere near that level prior to the mill shutting down. The Sparrows Point facility also includes a hot strip mill, pickle lines, two cold mills, batch annealing, two skinpass mills, four galvanizing lines (2 were not in use when the mill shut down) and three tin plate mills. There were more than 1,600 union workers at the mill which were laid off when the company filed for Chapter 11 protection on May 31st.
The Warren, Ohio mill was also sold to a non-steel company identified this morning by SMU sources as CJ Betters and the sale price around $18 million. Steel Market Update contacted CJ Betters this morning but was unable to get a confirmation or any comment from the company.
The Warren facility was approximately 1.0-1.5 million ton per year mill with one blast furnace rated at 4,000 tons per day. The facility was known for producing specialty steels – high carbon and high strength. The mill has a hot strip mill, pickling mills, cold mill, batch annealing and hot dipped galvanizing line. The mill was essentially a hot rolled mill at the time of the RG Steel Chapter 11 filing.
Last week the assets of the former Wheeling Pittsburgh Steel were sold in pieces at auction. The only assets bought by a steel mill was the equipment belonging to the Wheeling Corrugating Company – a manufacturer of decking and building components plus the Yorkville cold mill and the 50% ownership RG Steel had in Ohio Coatings. The equipment was bought by Nucor for $7 million. Yorkville and the 50% interest in Ohio Coatings were purchased by a joint venture between Esmark and TCC – a Korean tin plate mill which owned the other 50% interest in Ohio Coatings prior to the auction. The other Wheeling facilities were purchased by salvage or non-steel entities.
Combined the total “rated” capacity of the three RG Steel mills was 7.5 million tons. However, the real capacity taken out of the market is probably closer to 2.0 million tons.
The auction results still need to be approved by a bankruptcy judge.