Angelos submits bid for shipyard Orioles' owner says BethShip might build as well as repair ships

December 06, 1996|By Sean Somerville | Sean Somerville,SUN STAFF

Peter G. Angelos submitted a proposal yesterday to buy BethShip Inc., the struggling Sparrows Point shipyard that will be closed if it can't be sold.

"The attraction is to continue it as a major ship-repair yard and eventually its transformation into a shipbuilding facility," said Angelos, owner of the Baltimore Orioles. "This is not a PR effort. This is a real serious look, and I believe one that can be ultimately successful."

Baltimore shipping executive and banker Edwin F. Hale Sr., the only previously identified suitor, said yesterday that he would not make a bid for BethShip because of Angelos' interest. "He and I are friends," Hale said. "I don't want to get into bidding and drive the price up."

Angelos would not disclose terms of his proposal, saying that might give prospective competitors an advantage. He said he was reluctant to talk about the proposal because he did not want to raise expectations about the survival of BethShip.

Richard Singer, an Owings Mills real estate developer and a partner of Angelos in the venture, said the offer is "well within the framework" of the expectations of the yard's owner, Bethlehem Steel Corp.

Art Roth, a spokesman for Bethlehem Steel, would not comment any prospective buyers. He said only that the company is considering offers this month for BethShip and three Bethlehem, Pa., divisions that are for sale.

Shortly after Jan. 1, Bethlehem will determine whether to sell BethShip and the three other divisions "or proceed with an orderly shutdown," Roth said. Singer, owner and president of R. M. Singer & Associates, said Bethlehem Steel had set yesterday as a deadline for proposals.

Lonnie Vick, executive secretary for the Industrial Union of Marine & Shipbuilding Workers of America, the main union at BethShip, said former U.S. Rep. Helen Delich Bentley, now a maritime consultant, told workers Wednesday night that she expected proposals from four or five prospective buyers.

"That's encouraging," Vick said. "It's the first step that has to be taken before anything else can happen."

Bentley could not be reached for comment. Singer said the estimated number of bidders sounded high.

"It's an awful lot of money," he said. The price sought by Bethlehem is believed to be in the range of $30 million.

Bethlehem Steel said in October that it will close BethShip and the three other divisions -- Centec Roll Corp., BethForge and the company's structural products division -- unless it can identify buyers by early next year.

The yard, established in 1890 by the Maryland extension of Pennsylvania Steel Co., is the last major shipyard in the Baltimore region. It had about 4,000 workers in the 1970s but now employs about 700, who earn an average of $13.47 an hour.

Among the strengths of the roughly 200-acre yard are its huge graving dock, an excavated shore dry dock that is 1,200 feet long and 200 feet wide, and a floating dry dock with a lifting capacity of 40,000 tons.

Bethlehem Steel does not separately disclose BethShip's financial results. They are included in the company's steel-related segment, which reported losses of $22 million in 1993, $32 million in 1994 and $42 million in 1995. With one quarter left this year, steel-related operations have reached $24 million in losses, partly because of the weak ship-repair market.

Singer said he could not discuss financial details about BethShip because of a confidentiality agreement with Bethlehem Steel. But he said BethShip had "on balance" made money over the last five years.

"I think this yard has done very well," Angelos said. "I see no reason why that level won't continue. We would not be interested in an operation that is a chronic losing proposition."

Aside from Angelos, the main investors include Singer and Joseph Kelly, a Baltimore real estate executive. Singer said Angelos called him about three weeks ago to look into the possibility of buying BethShip. "The attraction was Mr. Angelos' -- his wanting to keep Baltimore jobs in Baltimore," Singer said.

After Angelos called, Singer put together a team that included a naval architect and a maritime economist to evaluate BethShip. Singer said some members of the team, whom he would not identify, could play a role in the partnership.

The team inspected the shipyard and met with union officials, Singer said. Yesterday, the partnership submitted its proposal to Chase Securities Inc., the New York firm hired by Bethlehem Steel to find a buyer for BethShip.

"We're being as definitive as they require at this point, especially with proof about the wherewithal to make the acquisition," he said. "It's money in the bank. That's not a problem."

Singer said that under Angelos, BethShip would continue to take advantage of ship modification and repair work -- a $300 million market. That kind of work includes the "double hulling" of supertankers. "The business is there," Singer said. "The yard has been doing repair business and commanding sizable volume."

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