After five months of uncertainty, workers at the Sparrows Point steel mill must wait a bit longer to learn who their next owner will be.
A U.S. District Court judge gave Mittal Steel Co. NV more time yesterday to complete a sale. Mittal's third and supposedly final extension was set to expire yesterday. Mittal now has until Aug. 6 to name a buyer.
The Justice Dept. ordered Mittal in February to divest the 118-year-old Baltimore County plant to avoid antitrust issues over the production of tin plate used for food and aerosol cans once Mittal's $41 billion merger with Luxembourg-based Arcelor SA is complete.
Mittal has been tight-lipped about who the bidders are but two companies, Chicago Heights, Ill.-based Esmark Inc. and Companhia Siderurgica Nacional of Brazil, have acknowledged that they submitted bids.
In a motion filed yesterday in U.S. District Court in Washington, Mittal said it has been engaged in "intense negotiations with multiple prospective buyers" over the past several months. The Rotterdam, Netherlands, company said it is "in the final stages of complex contract negotiations with each of the remaining possible buyers."
While it is close to completing a final sale agreement, Mittal said the negotiations are "unusually complex."
The Justice Department did not oppose the extension, and continues to work closely with Mittal on the divestment, Mittal spokesman William Steers said in an e-mailed statement.
John Cirri, president of United Steelworkers Local 9477, which represents nonsalaried workers at the plant, said he was not surprised that Mittal needed another extension after getting several already.
He said the delay has the Point's 2,500 workers on edge.
"Every time they get an extension, people wonder why," Cirri said.
Steel analyst Chuck Bradford speculated that the bidders might have used the pending deadline as leverage in trying to squeeze some extra dollars out of Mittal, and Mittal balked. Or that the Justice Department, which must approve the buyer, had issues with the terms of a potential deal.
Bradford also wondered whether one of the parties could not get enough financing.
Bradford said the fallout over subprime lending has made financing terms more difficult, with higher interest rates and contract clauses that allow lenders to back out for any reason.
If the matchup is indeed between Esmark and CSN, and Esmark wins, Sparrows Point would serve as a flagship for the young and growing steel company.
Esmark recently won a fierce proxy battle against CSN over Wheeling-Pittsburgh Corp. If Esmark were to come out the winner for Sparrows Point, it would likely feed Wheeling-Pitt with slab steel from Baltimore County.
If CSN were to get the sale, the company could ship iron ore cheaply from its vast mines in South America to Sparrows Point, which has deep-water access.
The plant, which employed more than 26,500 less than 40 years ago, produces about 3 million tons of steel per year.
allison.connolly@baltsun.com