Bethlehem may select buyer for shipyard today Local Angelos group may lose to N.Y. firm

February 07, 1997|By Sean Somerville | Sean Somerville,SUN STAFF

The pool of potential buyers of Bethlehem Steel Corp.'s Sparrows Point shipyard has been narrowed to two, and the yard's new owner could be named as early as today, several sources said yesterday.

The Bethlehem, Pa., steel giant is considering offers from the Baltimore Orioles' chief executive, Peter G. Angelos, and WHX Corp., the New York holding company for Wheeling-Pittsburgh Steel Corp.

Bethlehem wouldn't comment. Both WHX and Angelos' group declined to discuss the specifics of their offers.

WHX submitted a revised offer Wednesday in response to a request by Bethlehem, said Paul Bucha, the director on the WHX board spearheading the company's effort to buy the yard.

"It's a good business," Bucha said. "The intent we would have is to operate it as a ship repair facility, hopefully with the ability to do a little more business."

Angelos said he believed the contest had come down to his group and WHX.

"We've done our best," he said yesterday. "Hopefully it's good enough. There are some indications that [today] will tell the tale."

In October, Bethlehem Steel said it would close BethShip Inc. if it could not attract a qualified buyer. The company said the yard, which has struggled in recent years, is unprofitable.

The asking price for the BethShip yard is believed to be about $30 million. The yard employs about 700.

Until yesterday, Angelos' group was the only publicly identified prospective buyer.

A source familiar with Bethlehem Steel's deliberations said WHX Corp. is now the front-runner.

The source said Bethlehem believed a week ago it was close to sealing a deal with Angelos. But that prospect faded as Angelos' group tried to negotiate the final details.

"They were doing so much lawyering and that's what prompted Bethlehem to go back to Wheeling-Pittsburgh," the source said.

Former Rep. Helen Delich Bentley, a consultant for Angelos' group, dismissed the idea that WHX was a front-runner.

The Baltimore County Republican said Bethlehem has stuck closely to its negotiating schedule. As recently as Wednesday she was saying Bethlehem was considering offers from three potential buyers.

Liability for pollution

Liability for potential contamination at the yard has presented a major sticking point in negotiations between the Angelos group and Bethlehem, a source close to the talks said.

Richard Singer, a real estate developer and a member of Angelos' group, wouldn't detail the specific issues. But he said the problems were not insurmountable.

In a similar situation at a New Jersey shipyard, state officials accepted $300,000 from both the buyer and the seller and agreed to assume liability for any contamination uncovered at the yard. Similarly, the state of Massachusetts assumed liability for contamination at a reactivated yard in Quincy, Mass., Singer said.

If its bid is successful, the Angelos group would invest about $65 million, including $15 million to modernize the repair facilities and $50 million to improve the yard's capacity to renovate ships and build new ones.

The yard built its last ships in the 1980s, a decade when it diversified into tunnel construction and ship repair work.

'We could grow it'

Ron LaBow, chairman of WHX Corp., said BethShip is well-run and has the potential to make money. "We wouldn't buy it if we didn't think we could grow it," he said.

Bucha of WHX said the yard would continue to operate as a repair yard and also specialize in steel fabrication.

"Doing just ship repairs is perhaps selling the potential of this yard short," he said. "We don't like to do our negotiating in the newspaper, but the yard has the opportunity to do more than it's doing. It's a yard limited only by the imagination and creativity of the management."

WHX's Wheeling-Pittsburgh plants in Ohio, West Virginia and Pennsylvania are in the fourth month of a strike by 4,500 members of the United Steelworkers of America.

Bucha said that strike is "unrelated" to the company's bid for the yard. "There are different unions," he said. "That's the Steelworkers. This is the Machinists."

Angelos, an attorney with a labor-friendly reputation, called the strike a bloodbath.

"That doesn't make for a good candidate, does it?" he said. "It seems to me if it's between them and us, it makes sense to go in our direction."

Pub Date: 2/07/97

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