BethShip gets new owner, new name Veritas Capital reportedly pays $16 million

State helps finance deal

900 union members 'champing at the bit to get back to work'

Shipbuilding

October 03, 1997|By Sean Somerville | Sean Somerville,SUN STAFF

Veritas Capital Inc. yesterday completed its purchase of Bethlehem Steel's Sparrows Point shipyard with help from a state financing package worth about $7 million.

The BethShip Inc. yard, which faced closure if it wasn't sold, officially became Baltimore Marine Industries Inc. yesterday at about 3: 30 p.m.

The deal caps an emotional year for the yard's 900 workers, who saw the collapse of deals to sell the yard to New York-based WHX Corp. and then to attorney and Baltimore Orioles Chief Executive Peter G. Angelos.

"It's been an up and down year," said Murphy Thornton, president of Local Lodge S-33 of the Union of Industrial Marine and Shipbuilding Workers. "But we're back on the map. We're alive. This membership is poised and champing at the bit to get back to work." Veritas, a New York-based merchant banking fund, paid $16 million for the yard, according to sources close to the transaction.

The state will provide a $4 million loan -- $1 million of which will become a grant if the yard reaches its target employment of 875 within three years. In addition, the state will provide up to $3 million to pay for repairs of the yard's drydock, sources said.

James T. Brady, Maryland's secretary of business and economic development, said the state is still discussing details of the package. "We're close enough so that everybody felt closing the deal was the appropriate thing to do," Brady said.

He said the state's package was similar to the deal offered to Angelos. The Orioles executive walked away from the deal in August, blaming excessive liability for environmental problems.

Brady said jobs in the century-old yard, which will pay about $12.75 an hour, have an important place in Maryland's history. "We consider this a large commitment on the part of the state and one that is sensible, given our objectives," he said.

The union heaped praise on lawmakers such as U.S. Rep. Bob Ehrlich, a Republican, and Sen. Barbara Mikulski, a Democrat. But union officials said Gov. Parris N. Glendening wielded the greatest influence in saving the yard. "He never wavered in his commitment to do what he could to keep the yard open," Thornton said.

Keeping the yard open carried a price for workers, who agreed to a 75-cent cut in their average hourly wage in exchange for a package that included 10 percent of the company's stock.

Almost all of the yard's 900 workers have been laid off for months. Tom Campbell, the co-founder of Veritas who negotiated the transaction, said he expects employment to top 250 in the next six months and hit 875 after three years. "It's all a function of the number of ships you get," he said. "I don't like to oversell."

With acquisition of the shipyard, Veritas now owns a 107-year-old business full of history. Founded in 1890 by the Maryland extension of Pennsylvania Steel Co., the roughly 200-acre yard boasts one of the largest graving docks, or excavated basins, on the East Coast.

The yard reached its peak during World War II in 1943, when it employed 8,000. The yard built its last ship in the 1980s, diversifying into ship repairs and tunnel construction.

Yesterday, Thornton said he thinks that Baltimore Marine Industries can survive for years to come.

"Our members are excited about the prospect of building a future at BMI," he said. "They know what we are capable of doing and are now just waiting for the opportunity to do it."

Pub Date: 10/03/97

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