Representatives from AK Steel Holding Corp., one of the few American steel companies left after years of industry consolidation, were set to tour the steel mill at Sparrows Point as early as yesterday, according to a memo sent to workers, as federal officials again prepare the plant for sale.
The West Chester, Ohio-based company did not return telephone calls yesterday seeking comment about whether it is considering a bid for the steel mill or to confirm if representatives had visited the plant. Regulators are requiring that owner Arcelor Mittal sell the Baltimore County plant to settle antitrust issues over tin plate production.
A memo from a union leader to Sparrows Point workers that was obtained by The Sun said AK representatives would be at the plant yesterday. Several workers confirmed that visitors toured the plant.
The plant has not attracted many suitors from the United States. Most of the companies that previously bid were from Latin America and Europe.
AK Steel manufactures flat-rolled carbon, stainless and electrical steel primarily for the appliance, automotive and construction industries.
The company, which employs 6,800, has managed to turn its finances around, swinging to a profit for the fourth quarter and the year. On Friday, an analyst for Standard & Poor's elevated her credit rating on AK Steel, saying the restructuring has helped the company improve its cost profile and reduce its debt.
It has been more than year since the Justice Department decided Arcelor Mittal must sell Sparrows Point. In December, a $1.35 billion deal to sell the plant to a group led by Chicago Heights, Ill.-based Esmark Inc. unraveled when its partners walked away and took much of the financing with them.
Now under the direction of a court-appointed trustee, the sale has been fast-tracked. Workers were told that bids would be accepted through the middle of the month, and that a sale could be completed within three months.
The trustee, Joseph G. Krauss, a partner at the Washington law firm Hogan & Hartson LLP, declined to comment yesterday.
Esmark announced yesterday that it has secured a $500 million revolving-credit facility from GE Corporate Lending, replacing a $225 million line of credit for Esmark Steel Service Group Inc. and a $225 million credit for Wheeling-Pittsburgh Corp., which Esmark has owned for a little more than a year. Esmark hopes the financing will provide "the liquidity necessary to execute our plan to build a large and profitable steel services company," Esmark President Craig T. Bouchard said.
Esmark officials said they intend to submit a new bid for Sparrows Point, possibly with new partners, but have not yet done so. If successful, Esmark plans to ramp up production at Sparrows Point and feed steel slabs to Wheeling-Pitt.
United Steelworkers Negotiation Committee Chairman David McCall told reporters in December that the union supports a second bid by Esmark, despite concerns among the local membership about Sparrows Point being linked with Wheeling-Pitt, which lost $158 million during the first nine months of last year.
Steelworkers Local 9477 President John Cirri, who represents 2,100 workers at the plant, did not respond yesterday to a request for comment. Cirri sent the memo to workers early yesterday notifying them that AK Steel would be touring the plant.
Workers have been told that if the trustee were unable to find a viable owner then Arcelor Mittal would be able to keep the plant. However, that is unlikely as Arcelor Mittal would have to prove that it could not find a buyer for any price.
allison.connolly@baltsun.com