Bethlehem near deal on rod division

November 14, 1992|By Ross Hetrick | Ross Hetrick,Staff Writer

A deal to sell a Bethlehem Steel division, which includes the closed rod mill at Sparrows Point, is close to becoming a reality, according to officials of Ispat Group of Calcutta, India.

In a press release distributed this week, Ispat officials said they were "in an advanced stage of negotiations" with Bethlehem to buy its bar, rod and wire division. That division includes Bethlehem's rod mill in Baltimore County, which had a work force of 350 before it was shut down Aug. 14.

In addition to the rod mill, negotiations involve steel mills in Johnstown, Pa., and a 13-inch bar mill in Lackawanna, N.Y. The largest operation in the division is the Johnstown operation, which employed 1,950.

The division's Johnstown wire mill, slated to be sold to TMB Industries in Chicago, is excluded from the talks.

"Ispat's intention is to modernize the plant to become a world class steelmaker, both in quality and in cost on a sustainable basis," the press release said.

If the talks are successful, the Bethlehem division would be owned by Ispat Mexicana S.A. de CV, a subsidiary of Ispat.

B.C. Agarwal, a director of Ispat Mexicana, told a news conference Thursday that negotiations have been going on for several months. He also told reporters that his company would spend $100 million to modernize the Johnstown operation if the sale was completed. A sales price was not disclosed.

Gary Graham, a Bethlehem spokesman, said that the company was continuing to negotiate and that "we are optimistic."

Ispat, owned by the Mittal family of Calcutta, has been aggressively expanding its holdings in the Western Hemisphere in recent years. In 1988, the company signed a 10-year lease of the state-owned iron and steel company on the Caribbean islands of Trinidad and Tobago.

Then, last November, Ispat bought the government-owned Balsa Steel company in Mexico for a deal involving $25 million in cash and $195 million in debt. The Indian government agreed to spend $50 million to improve the Mexican plant.

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