Reuters: Bankruptcy News: UPDATE 1-Historic Sparrows Point steel mill sold to liquidator

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UPDATE 1-Historic Sparrows Point steel mill sold to liquidator Aug 8th 2012, 16:52 Wed Aug 8, 2012 12:52pm EDT * Baltimore steel mill sold for $72 mln * Warren, Ohio mill buyer hopes to find operator * Money raised will replay RG Steel creditors By Tom Hals WILMINGTON, Del., Aug 8 (Reuters) - The historic Sparrows Point steel mill was sold to liquidator Hilco Industrial for about $72 million on Tuesday, according to a person familiar with the result of a bankruptcy auction. The 120-year-old Baltimore mill, where steel for the Golden Gate Bridge was forged, was one of three steelmaking assets put up for sale by RG Steel LLC. The company was the fourth-largest U.S. producer of flat-rolled steel when it filed for Chapter 11 bankruptcy protection on May 31. RG Steel's mill in Warren, Ohio, was purchased by C.J. Betters Enterprises, which redevelops industrial sites, according to Chuck Betters, the head of the company. Betters said his intention is to find an operator of the mill after he evaluates the plant's cost base and needed upgrades. He said his company bid $17 million. The auction results must be approved by the U.S. bankruptcy court in Wilmington, Delaware. A hearing is scheduled for Aug. 15 to approve the sales. Gary Epstein, chief marketing officer of Hilco Trading Co LLC, declined to comment. RG Steel's attorney, Matthew Feldman of Willkie Farr & Gallagher, did not immediately respond to a phone call or email seeking a comment. Last week, some equipment and facilities from RG's Wheeling mill at Mingo Junction, Ohio, were sold off at auction, raising around $30 million, according to court records. Bankruptcy judge Kevin Carey will be asked to approve those sales at a hearing on Wednesday afternoon. The money raised from the auctions will help repay RG Steel's creditors. The company said when it filed for bankruptcy it owed around $900 million to lenders and noteholders who will seek to be paid before unsecured creditors such as suppliers. RG Steel paid $1.2 billion for the three plants last year from Russian steelmaker Severstal. Severstal bought Sparrows Point for $810 million in 2008 after its then-owner Europe-based ArcelorMittal was ordered to divest by the U.S. Justice Department. It is one of the largest U.S. steelmaking plants, with annual capacity of 3.9 million tons of sheet, slab and tin products. Warren produced 1.4 million tons a year and Wheeling had annual capacity of 2.9 million tons. The company has laid off the majority of its work force, which totaled about 4,000 full-time employees prior to its bankruptcy. The case is In re: WP Steel Venture LLC, U.S. Bankruptcy Court for the District of Delaware, No. 12-11661. Link this Share this Digg this Email Reprints

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