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Betters Outlines RG Steel Plans for Workers, Media
WARREN, Ohio – Charles J. Betters, a member of the investment group that successfully bid for the assets of RG Steel’s Warren mill says the partners would forego tripling their investment by scrapping the mill if they are only able to double what they spent by finding an operator and restarting the mill.
BDM Warren Steel Holdings LLC, the successful bidder for the mill’s assets, received bankruptcy court approval a week ago and hopes to close the sale within the next three weeks, said Betters. In the meantime, the partners plan to begin meeting with idled workers and prepare to winterize the assets, an announcement that met with applause and cheers from the scores of idled RG Steel workers assembled outside the plant’s administration building.
“We intend to winterize the mill to protect the assets” while seeking an operator for the mill, Betters affirmed during a news conference. He identified two other partners are Vic DiGeronimo Jr. of Independence Excavating Inc., Pittsburgh, and Stephen M. Muck of Grouse Ridge Capital LLC, a diversified investment firm, who was represented Thursday by Mike Bechtold. Betters’ companies include C.J. Betters Enterprises, Beaver Valley Slag and Bet-Tech Construction, and his background in scrap and liquidation raised initial concerns about the long-term future of the mill.
“There were four bidders at this auction. All of them did demolition work. We are the only group prior to bidding being committed to attempt to restart,” Better said. “All three of us agree if we could scrap a plant up and triple our money or find a way to bring the right players to the table, and the state stepping in and assisting, and we would only double our money. That decision’s already been made,” he assured.
One of the hurdles faced in the process is an objection by Arcelor Mittal, which operates the coke plant adjacent to RG’s hot roll mill and wants to exercise its property easement rights and purchase option for the steel plant’s boiler and power house.
The partners agreed to let Arcelor Mittal proceed through a lease-back agreement in principal that will allow the boiler to supply RG once an operator is identified. Paperwork on the deal has yet to be finalized.
“It was a pretty tough decision to make,” Betters said.
Once Betters’ group emerged as the successful bidder, he said they received several calls from potential operators. “However, for the last four weeks, it’s taken everything in our power to deal with the battery of attorneys out of New York and going right into the Arcelor objections,” he said. “That’s been our focus and until we have a signed asset purchase agreement and bankruptcy approval, none of us felt comfortable discussion the future of this plant without the ownership.”
Betters acknowledges the economy remains sluggish, “which is concerning,” but he anticipates that would turn around as it typically does following a presidential election “because the uncertainty is removed.” The mill makes money and “I believe there is a customer base out there that we could resurrect,” he said.
In his appearances before local reporters and RG Steel employees, Betters referenced his own background in steel-dependent Aliquippa, Pa., and recalled the impact of steel’s demise in the 1980s there. “I personally am very much aware of what that does to a community and it’s not pretty,” he said.
More than a few in the crowd called on Betters to rely on his owner expertise to operate the mill rather than try to find an operator.
“Ladies and gentlemen, please don’t go there,” he exhorted.
The workers appeared to like what they heard from Betters.
“I believe it’s promising. I really believe that he has the heart to run it and he wants to see it go through,” said Heather Anderson of Poland, a 16-year employee who worked in the melt shop.
Melvin Goins of Youngstown has a history in the plant – 43 years -- that extends back to its Republic Steel days. He also was encouraged by what he heard. “He realizes that if we don’t winterize it there won’t be a plant to operate,” he said.
Tammy Chasser of Niles, a 22-year employee, was among those who shouted for Betters to take over operations. She was encouraged not only by what she heard but that he spoke with the workers at all.
“Mr. Betters didn’t have to show up but he did, so that tells me he cares,” she said. “He’s going to winterize – that tells me a whole lot more. If he did not winterize this place, it’ll never start again.
Although pleased that he appears committed to finding a mill operator, Chasser acknowledged she is “a bit of a hopeless romantic” and would like him to sit down and try to figure out how to make it work.
“If he opens up, we’ll make money for him,” she said.
Thursday's events folowed meetings with local and state officials regarding potential assistance for a restart.
Copyright 2012 The Business Journal, Youngstown, Ohio.