Oh, Scrap! Sparrows Point Auctioned to Other Auctioneer
The Sparrows Point auction winner is equipment liquidator Hilco Industrial, which bought the idled steel plant yesterday for $72 million, the Baltimore Brew reports. The auction of bankrupt RG Steel assets drew no steel companies and, according to an e-mail United Steelworkers Local 9477 President Joe Rosel sent to members, “did not go as planned nor as we expected.”
The Sun’s Jamie Smith Hopkins apparently reached Rosel this morning, and he held out some hope for the union’s 1,600 or so laid-off workers:
“We’ve been making steel here for 120 years, and we’re not giving up,” he said. “We’re still going to fight to find an operator for this plant, even in the face of what just occurred. There is an opportunity to make money for Hilco or somebody else by selling it to a strategic steelmaker who actually to wants to operate it — next week, next month or six months from now — and we’ll work to try to do that.”
Meanwhile, a Pennsylvania scrap dealer bought RG’s Warren plant for about $18 million, according to Steel Market Update. As The Brew’s Mark Reutter calculates:
This would make the total auction price for Warren, Sparrows Point and RG Wheeling $125.2 million – vastly below their reported $1.3 billion in assets and a fraction of the $434 million in secured senior claims held by Wells Fargo, GE Capital and other banks.
The auction results still need to be ratified by the bankruptcy judge.