The deadline for “initial indications of interest” for purchasing parts or all of the Sparrows Point steel mill passed yesterday, and the word from its current owner – relayed to The Brew – is “no comment.”
More than 1,500 workers have been waiting to see if the idled steel mill, once the world’s largest, has any chance of reopening.
“Hilco is not yet prepared to make a statement or comment at this time,” said Gary C. Epstein, chief marketing officer, this afternoon.
Hilco Industrial and a partner purchased the 120-year-old steel mill, located on Baltimore’s outer harbor, for $72.5 million in a bankruptcy auction last August.
In September, Hilco placed the closed mill up for sale, setting a November 12 deadline for prospective buyers to express interest in the property, followed by a bid deadline of December 21 and an auction, if necessary, on January 3, 2013.
The sale was instigated, according to Epstein, after a number of companies expressed interest in parts of the mill. “We’d like nothing more than to help get people back to work, if that’s possible,” Epstein said at the time.
The Waiting Game
Joe Rosel, president of the United Steelworkers (USW) Local 9477 representing Sparrows Point, also has vowed to find a “strategic” steel company to operate the mill.
Rosel has not made any public comment in recent weeks about his success in finding such a company, which would presumably enter into a contract with the USW, re-hire the workforce and start up the furnaces.
A union officer today accused Hilco of being “very uncooperative” in the union’s search of an industrial savior. The officer did not wish to be identified due to the sensitive nature of discussions with possible partners.
Since Hilco does not recognize the USW, former Sparrows Point employees are in limbo, not only without a job, but without an employer.
Bidders May Remove Equipment
In its sales material in September, Hilco said it will entertain bids on the entire mill, one or more production lines, or one or more components of the production lines.
Successful bidders may physically remove assets from Sparrows Point, including entire production lines, according to the bid documents.
Over the summer, several steel operators offered bids on Sparrows Point, including Brazil’s CSN and Mexico’s AHMSA. But their bids were not considered acceptable to RG Steel’s bank creditors. Hilco went on to win the auction in a joint venture with Environmental Liability Transfer (ELT), a St. Louis “brownfield” redeveloper.
Interest by Port
The 3,400-acre Sparrows Point peninsula, 10 miles southeast of downtown Baltimore, is owned by ELT, while Hilco owns the physical assets. A portion of the property, known as Coke Point, is under active review by the Maryland Port Administration for a dredge-containment facility.
The port authority is also eying the mill’s deepwater port as a possible site for a car-unloading facility. During its long heyday after World War II, when Sparrows Point employed up to 30,000 workers, its location as the country’s only tidewater steel plant was a major strategic advantage for its then-owner, Bethlehem Steel Corp.
Hilco bills itself as one of the world’s largest liquidators of industrial property. It is not a steel company and says it has no interest in operating Sparrows Point.