“Not a haircut but an amputation.”

That’s how veteran Moscow journalist John Helmer describes Alexei Mordashov’s sale of Sparrows Point and two other Severstal mills Wednesday. Helmer calculates that Renco Group got Sparrows Point at an 80 percent discount from the $810 million price Mordashov paid for the Baltimore mill just three years ago.

One of Russia’s reigning “oligarchs” with interests in steelmaking, mining and manufacturing, Mordashov made a huge miscalculation when he bought not only Sparrows but two Midwest mills, (Warren and Wheeling) that were coming out of bankruptcy protection.

The CEO’s problems, compounded by atrocious labor relations, have been detailed by this website (here and here). The imperial overreach of his flawed business plan is related in this post.

Of course, Mordashov isn’t leaving Sparrows Point in anywhere near the condition that he found the site in May 2008. With the “L” blast furnace closed and hundreds of thousands of tons of raw material sold to raise cash, the Baltimore mill is in no condition to ramp up production anytime soon.

Once the sale is completed (now expected by the end of this month), Renco will need to spend considerable cash and manpower to repair equipment that was haphazardly “winterized” and placed in “asset protection mode” by an absentee owner hurrying to mothball the mill.

Mordashov will continue to operate through Severstal two U.S. mills in Dearborn, Mich., and Columbus, Miss.