Historic steel plant goes on the auction block

Reuters News
Posted: Aug 07, 2012 6:37 PM
Historic steel plant goes on the auction block

(Reuters) - One of America's historic industrial sites, the 120-year-old Sparrows Point steel mill in Baltimore, where steel for the Golden Gate Bridge was forged, went on the auction block on Tuesday.

The plant is one of three steelmaking assets put up for sale by RG Steel LLC, which filed for Chapter 11 bankruptcy protection on May 31.

Sparrows Point and another RG Steel mill in Warren, Ohio, were part of an auction scheduled at the law offices of Willkie Farr & Gallagher in Manhattan.

The law firm did not return calls asking for confirmation, but a source familiar with the situation said the auction, which had been postponed for a week, was underway.

Maryland's Department of the Environment objected to the sale of Sparrows Point, saying in a court filing on Tuesday that it must include a plan for completing environmental clean-up that had been approved for the site.

Any sale must have the approval of Delaware's Bankruptcy court, which was to hold a hearing on Wednesday.

Last week, some equipment and facilities from RG's Wheeling mill at Mingo Junction, Ohio, were sold off at auction. But the price was small change compared with the $1.2 billion RG Steel paid Russian steelmaker Severstal for all three plants last year.

Equipment and intellectual property related to the Wheeling plant were sold to Nucor Corp for $7 million, while its Martins Ferry mill in Ohio was sold for $2 million. RG Steel also sold its equity rights in Ohio Coatings Co to Esmark Steel Group for $1.5 million.

Steel was first made at Sparrows Point in 1889. By the mid-20th century, it was the world's largest steel mill, stretching four miles on the southeast edge of Baltimore harbor.

Purchased by Bethlehem Steel in 1916, the mill's steel ended up as girders in the Golden Gate Bridge in San Francisco and in cables for the George Washington Bridge in New York City.

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Industry analysts said although Sparrows Point has some modern equipment, such as a cold mill, other machinery is 100 years old and potential buyers were more likely to pick off parts, rather than purchase the whole facility.

Charles Bradford, of Bradford Research in New York, said Nucor might be interested in the cold mill, but not the whole plant, as it has a similar mill in Alabama.

The case is In re: WP Steel Venture LLC, U.S. Bankruptcy Court for the District of Delaware, No. 12-11661.

(Reporting by Steve James; Editing by Dan Grebler)