Union head says Hilco rejected bids
Wednesday, 26 December 2012 12:16

Mill owner Hilco sold the cold mill complex to steelmaker Nucor on Dec. 12, nine days before a self-imposed bidding deadline was set to expire.
photo by Roland Dorsey

At least two other groups tried to bid on mill, Rosel says

by Nicole Rodman

At a meeting of former Sparrows Point steelworkers last Monday, Joe Rosel, president of United Steelworkers Local 9477, told members that at least two groups had wanted to  bid on the entire steel mill but were rejected by mill owner Hilco.
    According to Rosel, Pittsburgh-based iron and steel supplier Sherman International was interested in restarting operations at the mill.
    Sherman attempted to bid $150 million for the mill (up from the $72.5 million that Hilco and Environmental Liability Transfer paid for the property in August), but, according to Rosel, was rejected by Hilco.
    As Rosel explained to members, Sherman was backed by a foreign steelmaker in its attempt to bid for the plant.
    According to Rosel, a second interested potential bidder was working with New York-based investment bank The Seaport Group. The bidder was interested in restarting the mill and re-employing up to 1,000 steelworkers.
    This potential bidder was also rebuffed, Rosel explained.
    As Rosel noted, he had even heard from another group (headed by a former executive of steelmaker Severstal — a former Sparrows Point owner) that they had been working to place a bid before Hilco unexpectedly closed bidding.
    Upon putting the mill back up for sale, Hilco had originally announced a Dec. 21 deadline for accepting bids, with an auction on Jan. 3.
    Instead, news broke on Dec. 12 that Hilco had accepted a bid for the cold mill complex from North Carolina-based steelmaker Nucor.
    The sale of the cold mill likely ensures that the mill will never be restarted for operation.
    While Sherman International and The Seaport Group did not respond to requests for comment by press time, a representative from Hilco did send a statement to The Eagle.
    The statement, sent last Wednesday, refuted Rosel’s claims that Hilco did not follow the proper process in finding a buyer for the mill.
    As Hilco spokesperson Gary Epstein explained, “The rumors that Hilco rejected or dismissed any offers or interested parties to acquire part or all of the Sparrows Point Mill without review or consideration are simply unfounded. All interested parties were put through a fair due diligence process and all qualified parties were seriously considered.”
    Epstein continued, “In addition to the months leading up to the original bankruptcy auction (May through August), Hilco continued to market the property extensively and gave the process many additional months (September through December) to seek buyers for the mill as a going concern or in part.”
    He concluded, “Through our private company process, every potential prospect had to meet very specific criteria including the ability to get financing for such a large deal, etc. and no interested party was denied an opportunity to bid.”
    Responding to Hilco’s statement last Thursday, Rosel told The Eagle that the process Hilco itself had set forth was not properly followed.
    As Rosel pointed out, Hilco had originally set the deadline for accepting bids at Dec. 21 before unexpectedly cutting it short on Dec. 12.
    “People could have bid between the 12th and the 21st,” Rosel noted.
    As for Hilco’s statement that Rosel’s claims are “unfounded,” Rosel noted that he heard about the rejected bids directly from Sherman International and the other companies that had tried to submit the bids.
    “I only know what the bidders told me, because I wasn’t there,” Rosel explained.
    For now, however, it appears that the Sparrows Point steel mill will not find its white knight and will, instead, be sold off in pieces.