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Liquidator reportedly high bidder for Sparrows Point mill

In a grim turn of events for the nearly 2,000 workers at the Sparrows Point steel mill, the reported high bidder for its assets is a well-known, international company that specializes in auctioning off equipment at closed plants.

Multiple reports citing a steelworker’s union official have named the new owner of Sparrows Point as Hilco Industrial, a subsidiary of Northbrook, Ill-based Hilco Trading LLC. The price, according to the Associated Press, was $72 million.

Sparrows Point’s parent company, RG Steel, is in Chapter 11 bankruptcy and in the process of selling its assets after being unable to overcome low steel prices and high raw material costs.

RG Steel bought Sparrows Point and two other steel mills from OAO Severstal in March 2011 for $1.2 billion.

Also auctioned on Tuesday was RG Steel’s plant in Warren, Ohio. The Vindicator newspaper in Youngstown, Ohio, reported Wednesday that that plant had been purchased by CJ Betters Enterprises of Monaca, Pa. The owner of CJ Betters said the plan was to revive the plant, which had been profitable prior to its idling.

The sale of Sparrows Point has been objected to by a number of entities. The Chesapeake Bay Foundation and Blue Water Baltimore Inc. filed a motion in the U.S. District Court for Delaware on Tuesday objecting to the order the court approved regarding sale of the mill. Much of the concern is that the new buyer adheres to court-ordered consent decrees meant to clean up pollution at the site.

The latest to voice concern about the sale was Baltimore County, where the steel plant is located. County Executive Kevin Kamenetz said Wednesday the county was concerned about the sale and filed the objection to make sure it has a voice when the bankruptcy judge has a hearing on the sale later this month.

“The bankruptcy judge still has to approve the sale to the liquidator,” Kamenetz said. “And, I anticipate that the county will oppose the sale on the grounds that the price is too low.”

Kamenetz said the county was hoping to find a way to keep the plant open, even if it was in a limited capacity. He said under the right situation an operator could be found for the core steel production part of the plant while the non-core part could be liquidated by Hilco.

“There is still a window of opportunity to maintain steel work at Sparrows Point, in my opinion,” Kamenetz said. “Hopefully, we can still have steel work there for another 120 years.”

A hearing on the sales of Sparrows Point and the Warren, Ohio, facility is scheduled for next week.

Also Wednesday, a federal judge in Delaware approved the sale of two Ohio facilities owned by RG Steel.

U.S. Bankruptcy Judge Kevin Carey approved the sale of the company’s Mingo Junction facility for $20 million and its Martins Ferry facility for $22 million.


One comment

  1. Maryland Esquire

    Why would you indicate that RG Steel “was in the process of liquidating assets?” It filed for Chapter 11, not Chapter 7 bankruptcy protection. Has RG Steel been liquidating instead of attempting to reorganize?

    Also, the comments from Kevin Kamenetz about keeping the mill open are curious in light of Daily Record articles from May 30 and May 31, 2012 in which the Daily Record reported that Kamenetz had created a partnership of businesses to discuss developing the land at Sparrows Point and making the “best use of it” following the RG Steel bankruptcy filing. The Daily Record provided the following quote from Kamenetz in its May 30 article: “We want to be able to market to entities who use the port,” he said. “We want to think ahead about the best uses for the Sparrows Point peninsula.”

    The Daily Record’s previous articles do not appear to indicate that the County Executive had a mission of keeping the mill open; rather, that he was catering to the interests of potential developers.