Bethlehem puts off decision on ISG bid

Miller wants to see terms of $1.5 billion asset offer

January 30, 2003|By Gus G. Sentementes | Gus G. Sentementes,SUN STAFF

Bethlehem Steel Corp.'s board of directors was "sufficiently impressed" with International Steel Group Inc.'s $1.5 billion offer for its assets but opted to put off a decision until the deal's terms are final, Bethlehem's top official said yesterday.

"This may be the most important and most complex decision the board will ever make. The board will not be rushed to judgment," said Robert S. "Steve" Miller Jr., chairman and chief executive officer.

The offer for Bethlehem's assets, including its Sparrows Point complex with 3,300 workers, includes an undisclosed mix of cash and the assumption of some liabilities.

Miller said that it will take several more days for an asset purchase agreement to be reached between the two companies. That final agreement will then be presented to the board, he said.

"I look forward to recommending this transaction to Bethlehem's board, but of course, I can only recommend it after we've finished the asset purchase agreement," he said in a conference call with reporters.

Bethlehem, which has operated in Chapter 11 bankruptcy protection since October 2001, received ISG's offer Jan. 6.

ISG officials could not be reached yesterday for comment. A purchase by Cleveland-based ISG would create the country's second-largest integrated steelmaker. Many analysts have said the offer is Bethlehem's best chance to avoid a shutdown.

The beleaguered steel industry, which has seen more than 30 companies file for bankruptcy since 1997, recently began lurching toward consolidation. ISG's offer for Bethlehem was followed by competing offers from U.S. Steel Corp. and AK Steel Corp. for National Steel Corp., another steelmaker in Chapter 11.

Miller said ISG's chairman, Wilbur L. Ross Jr., and president, Rodney Mott, made presentations to Bethlehem's board Tuesday. Yesterday, the board met with representatives of Bethlehem's creditors committee, Miller said.

Bethlehem faces a challenge from its unsecured creditors, who are jockeying for a bigger role in determining Bethlehem's reorganization options, since they expect only a minimum recovery in a sale to ISG. On Monday, the creditors' committee filed a motion in U.S. Bankruptcy Court in Manhattan to oppose Bethlehem's request for a six-month extension of its exclusivity period for filing a reorganization plan.

If granted by the court, it would be Bethlehem's third extension. An extension would "prejudice the creditors and others in interest who may wish to propose a plan of reorganization," the creditors' court filing said.

Miller expressed confidence yesterday that the judge will extend the exclusivity period once again as they work "feverishly" to finish discussions with ISG. "I think the judge will conclude we merit continued exclusivity," he said.

U.S. Bankruptcy Judge Burton R. Lifland is to hold a hearing today on the matter.

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