15 days for Sparrows Point

Mittal gets second extension to find a buyer for steel plant

June 21, 2007|By Allison Connolly | Allison Connolly,Sun reporter

The clock is ticking down on the sale of the Sparrows Point steel plant.

The Justice Department granted owner Mittal Steel Co. NV a 15-day extension yesterday - until July 5 - to find a buyer for the sprawling complex.

Mittal, of the Netherlands, is under a Justice Department consent order to sell the 118-year-old plant to resolve antitrust concerns relating to tin plate production arising from its $33 million merger with Luxembourg-based Arcelor SA.

Yesterday marked the second extension granted by the government, which last month gave the steelmaker an additional 30 days - until yesterday - to conclude a deal. Mittal could receive an additional 15-day extension if needed, Justice Department spokeswoman Gina Talamona said.

Mittal spokesman David Allen declined to comment yesterday.

Rumors about who the buyer might be have swirled among workers there since early April, when Mittal began showing the Baltimore County plant to prospective buyers. The tours were led by tight-lipped Mittal managers who refused to identify the visitors.

So far, Esmark Inc., of Chicago Heights, Ill., and CSN Brazil have disclosed that they made formal bids for the mill. Another Brazilian steel company, Usinas Siderurgicas de Minas Gerais SA, which is partially owned by Japanese steelmaker Nippon Steel Corp., also is reported to be interested in Sparrows Point.

James P. Bouchard, chairman and chief executive officer of Esmark, said yesterday that his company is still in the running, as far as he knows.

"Our interest remains the same and we're just waiting to hear," he said as he was leaving the Steel Success Strategies conference in New York City, where Mittal chief executive Lakshmi N. Mittal was scheduled to be a keynote speaker.

Bouchard said the sale was not discussed during the conference.

New York City-based analyst Chuck Bradford said Sparrows Point could fetch about $800 million based on last year's production and operating profit, which he estimated to be about $120 million. But he noted that the plant was temporarily shut down for several weeks at a time to keep production in line with demand, and it could be worth more to some buyers.

"It's all in the eye of the beholder," said Bradford, who was also at the steel conference.

Fewer than 2,500 workers pump out 3 million tons of steel annually at Sparrows Point, a far cry from the more than 25,000 who worked there less than 40 years ago.

Longtime owner Bethlehem Steel Corp. went bankrupt and sold the plant and other assets in 2003 to International Steel Group. ISG sold out to Mittal two years later.

Sparrows Point has fared well under Mittal compared with its sister plant in Weirton, W.Va. Last year, Mittal sent work from Weirton to Baltimore County because it was more efficient. About 1,000 workers in Weirton lost their jobs in the process.

The uncertainty of the sale has kept workers at Sparrows Point guessing.

"Since it's our third time, there's some anxiety about who it's going to be and whether our contract is going to be the same," said John Cirri, president of United Steelworkers Local 9477, which represents nonsalaried workers at the plant.

But, he added: "It's not like the first time. It's a shame that we're getting used to having new owners."

allison.connolly@baltsun.com

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