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Betters Bested in Bid for Sparrows Point Steel Mill
YOUNGSTOWN, Ohio – C.J. Betters Enterprises Inc., the high bidder for RG Steel’s idled Warren mill with a cash purchase price of $16 for million, also offered $65 million for RG’s Steel’s Sparrows Point mill in Maryland. In that round of bidding, the Monaca, Pa.-based Betters fell short of a $72 million bid by a Missouri liquidation and land remediation company, Environmental Liability Transfer Inc., and its joint venture partner, Hilco Trading of Illinois.
Court documents posted late Friday show the reverse standings in relation to bankruptcy auction for the Warren mill, for which Environmental Liability Transfer came in second to Betters, bidding a cash purchase price of $15 million.
A $1 million discount is factored into Betters’ $16 million bid for the RG Warren, and is based on its CEO, Charles J. Betters, pledging to attempt to reopen the mill. There is no indication that Betters offered a similar promise in regards to the Sparrows Point facility.
Betters Enterprises consists of a diverse array of business units. The company, best known for its real estate development arm, includes trucking, slag and scrap divisions (READ STORY).
The Baltimore Sun quotes an email to Sparrows Point managers that states Hilco “pledged not to destroy key steelmaking assets for six months while the unsecured creditors attempt to find an operator.”
The sprawling steel complex just outside of Baltimore was sold in 2008 for $810 million.
Another Baltimore news organization, the Baltimore Brew, is questioning whether the sale of Sparrows Point would be an arms-length transaction. The story (CLICK TO READ) cites Hilco’s ties to Cerberus Capital Management, which holds “[a nearly 25%] stake in RG Steel Sparrows Point but also has longstanding ties to the parent company of the successful bidder, Hilco Industrial.”
U.S. Judge Kevin J. Carey has scheduled a hearing Wednesday at his court in Wilmington, Del., to hear objections to the auction results.
Today leaders of the United Steelworkers’ locals representing furloughed RG Steel workers in Warren, the Wheeling area and Maryland are scheduled to meet at the international union’s headquarters in Pittsburgh.
Copyright 2012 The Business Journal, Youngstown, Ohio.