Mittal to miss deadline for sale of Point plant


May 17, 2007|By Allison Connolly | Allison Connolly,Sun reporter

Mittal Steel Co. NV should wrap up the sale of its Sparrows Point mill within the next six to eight weeks - longer than the timetable initially set by the Justice Department, Chief Executive Officer Lakshmi N. Mittal said yesterday.

Mittal said that "good progress" was being made on the proposals received and that a result would be announced within that time frame "or before." His comment came during a conference call originating in Luxembourg to discuss first-quarter earnings.

Under the Justice Department order issued Feb. 20, Mittal had 90 days to find a buyer for the Baltimore County steel mill. Regulators ordered Mittal to divest Sparrows Point to resolve concerns that the steelmaker would have a monopoly on tin plate production once its $33 billion merger with Luxembourg-based Arcelor SA is complete.

Mittal spokesman David Allen declined to say yesterday whether the company has asked the Justice Department for more time to make the sale. The Justice Department also declined to comment yesterday on a possible extension.

The list of serious bidders includes Chicago Heights, Ill.-based Esmark Inc. and CSN of Brazil. Another Brazilian company, Usinas Siderurgicas de Minas Gerais S.A., is also reportedly interested in the plant.

Previously, Mittal officials said the list includes American and foreign-owned steel companies as well as private equity groups.

Sparrows Point is an integrated steel mill with deep-port access. Though it is more than 100 years old, longtime owner Bethlehem Steel Corp. invested hundreds of millions of dollars in upgrades, including building a new cold mill and relining its blast furnace - the largest in North America - before it filed for bankruptcy in 2001.

The plant employs fewer than 2,500 full-time employees and produces more than 3 million tons of steel per year. It is efficient and profitable, largely because cost-cutting measures implemented by its previous owner, International Steel Group, and efforts by the union and management to work together to keep inventory and production in check and avoid mandatory layoffs.

Arcelor Mittal reported profit of $2.25 billion, or $1.62 per share, compared with $1.6 billion, or $1.16 per share, for the corresponding period a year ago. Sales were $24.5 billion, up from a combined total of nearly $21 billion for the corresponding period a year ago.

Mittal stock closed down 74 cents yesterday at $57.34 per share.

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