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Second
Suitor Surfaces for Weirton Steel
Weirton Steel Corp., which announced Feb. 18 that it would sell
its assets to International Steel Group, Cleveland, for $255 million,
has a second bidder in the wings.
Encouraged
by the recent run-up in worldwide steel prices, the Informal Committee
of Senior Secured Noteholders of Weirton Steel retained International
Steel Associates Inc. and its principal, John Correnti, to advise
the committee in its efforts to recapitalize and restructure the
steelmaker.
The committee believes it can submit an offer that will better serve
Weirton and its creditors than ISG’s bid. The terms of the
offer have not been disclosed.
With
the committee’s offer, Weirton Steel would remain independent
and based in Weirton, W.Va. The committee’s effort is based
on members’ belief that the upward trend in steel prices has
provided an opportunity to improve the company’s liquidity,
brightening long-term prospects, particularly in view of the substantial
reductions that could be made to the company’s cost structure.
Any
sale of Weirton and its assets is subject to bankruptcy court approval
and to the highest and best bid during the court’s auction
process. Weirton leaders hoped a sale would be completed in April.
International
Steel Associates’ Correnti is better known as the former chief
executive officer of both Nucor Corp. and Birmingham Steel Corp.
In a related development, Weirton began mailing notices to its employees
under the federal Workers Adjustment and Retraining Notification
Act, as part of the sale process.
Once
the sale is completed, Weirton Steel will cease to exist, but employees
will work for Weirton until the sale closes. After that, the buyer
will become the employer.
“This
will be a seamless transition and operations will continue uninterrupted.
Under these circumstances, we are required to issue WARN Act notices,”
explains Weirton CEO D. Leonard Wise. “We’re also contacting
customers and vendors to inform them that we continue normal steelmaking
and finishing operations now and through the sale. The buyer will
pick up where we leave off without skipping a beat.”
Wise
has met with 400 salaried employees to update them on the pending
sale and to explain the notice. “We are confident that the
sale will strengthen the facility and help improve our ability to
serve our customers’ needs,” he says.
Slater
Sells Hamilton Division, Sorel Forge
Slater Steel Inc., Mississauga, Ontario, signed a letter of intent
with Delaware Street Capital, New York, for the sale of substantially
all the assets of its Hamilton Specialty Bar Division and hoped
to close it by the end of March.
The
acquisition, pegged at nearly $41 million ($16.9 million cash and
$24 million in pension and medical liabilities), is subject to Slater
and Delaware signing a definitive agreement, bankruptcy court approval
and other conditions.
Slater
Steel also completed its sale March 15 of the assets of Sorel Forge
to a subsidiary of A. Finkl & Sons Co., Chicago, for about $41
million. Finkl will operate Sorel Forge on a going-concern basis.
Slater
and its subsidiaries sought creditor protection last June. Slater
then retained RBC Capital Markets to investigate strategic alternatives,
such as the sale of operating divisions.
Slater
sold its Fort Wayne Specialty Alloys Division to Valbruna Corp.
of Italy through a Feb. 11 bankruptcy court auction.
In
an effort to save jobs, and the Hamilton Division, the United Steelworkers
of America was closely involved in the negotiations between the
buyer and Slater. The union offered a new collective bargaining
agreement between the new owner and Local 4752, which represents
hourly workers at Hamilton.
A
sale to Delaware Street Capital could mean uninterrupted steel production,
according to the union, which would create a seamless transition
for customers.
“We
are extremely pleased that affected stakeholders came together to
support our proposal,” says Gary Katz, DSC’s director.
“This is great news for employees, customers and the local
community. It means this mill will remain in business and continue
to deliver world-class products to existing and potential customers
around the world.”
DSC
has begun contacting Hamilton customers to confirm orders and discuss
future needs. Certain customers had been unable to delay their sourcing
decisions and made alternative supply arrangements before learning
that Delaware and the union were working together to save the plant.
With the acceptance of the deal by Slater, Katz expressed confidence
the company will maintain and grow its customer base.
Lastly,
the Toronto Stock Exchange delisted Slater Steel’s common shares
from trading March 19, at the company’s request.
Union
Fights Stelco Bankruptcy
The United Steelworkers of America reportedly made history in court
March 5 when it challenged Stelco Inc.’s motion to enter into
protection under Canada’s Companies Creditors Arrangement Act.
Normally
when a company asks for creditor protection, creditors and other
stakeholders go along with it. But the union believes Stelco asked
for protection not because it fears bankruptcy, but because it wants
to alter the contracts with its labor unions.
By
challenging the creditors law, the union confronted the company’s
assumption of bankruptcy, and challenged the law itself by forcing
the judge to define the threshold for declaring bankruptcy protection.
The
judge reportedly admitted that this ruling will create law in defining
what is the trigger point for asking for CCAA protection.
While
the union awaits the judge’s ruling, Stelco reported a fiscal
2003 consolidated net loss of $192 million before asset write-offs,
revaluations and other adjustments, which are expected to be substantial.
With
respect to its debtor-in-possession financing, Stelco says the commitment
from its operating lenders for $75 million was extended. Stelco
soon expects to complete the necessary documentation and satisfy
the conditions for draws under DIP financing.
In
a related matter, the company will not reopen CHT, its wholly owned
subsidiary in Richmond Hill, Ontario. Specializing in the heat-treating
of steel plate, CHT’s only major customer was Stelco’s
Hamilton plate mill. CHT, which is financially dependent on Stelco
and the processing charges paid by it, has no outside funding.
CHT
idled its facilities last November after Stelco temporarily idled
its Hamilton plate mill in April. The closures were precipitated
by difficult market conditions for plate in North America.
ISG
to Restart Cleveland Caster
International Steel Group Inc. will restart a continuous caster
and a basic oxygen furnace (BOF) shop on the West Side of its Cleveland
Works, and will hire about 140 laid-off steelworkers to run these
facilities. ISG plans to invest $10 million, primarily for maintenance
and engineering necessary for the restart.
The
facilities have been idle since LTV Corp. shuttered them in June
2001. The first slabs are expected to roll off the twin-strand continuous
slab caster in May. At full production, the caster will add 60,000
tons of steel slabs per month.
The
additional casting capacity will balance ISG Cleveland’s existing
ironmaking and rolling capacity.
William
A. Brake, ISG vice president and general manager, explains that
market conditions “now warrant this investment from ISG—a
financial commitment as well as an expression of faith in the employees
who will return to the Cleveland Works.”
Mark
Granakis, president of United Steelworkers of America Local 979,
says the union is “delighted to join ISG in restarting this
first-class plant and committing to the future of steelworkers and
steelmaking in Cleveland.”
Virtually
all the workers whom ISG plans to add will come from the ranks of
former West Side employees.
Bayou
Emerges from Chapter 11
Bayou Steel Corp., LaPlace, La., completed all required transactions
and satisfied all remaining conditions for its reorganization plan,
and emerged from Chapter 11 bankruptcy protection Feb. 18.
“Bayou
was burdened with significant debt at a time when record-high energy
costs were incurred, steel imports surged, and the economy slumped
over an extended period of time,” says President and Chief
Operating Officer Jerry M. Pitts.
Under
Chapter 11, Bayou and its executive team had time to develop a comprehensive
three-year business plan, which was finalized last September. Since
then, the company “has been successfully implementing the plan,
as EBITDA and revenues have exceeded projections,” Pitts says.
Bayou
Steel closed on $30 million in new bonds and a new $45-million working
capital facility. The reorganization removed about $105 million
of debt in addition to eliminating more than $25 million of potential
litigation claims.
“Through
the cooperation of our bondholders, our creditors and our employees,
we have been able to reduce debt and control costs. We are emerging
much more competitive and financially stronger,” Pitts continues.
The
company’s new board of directors consists of Charles W. McQueary,
Christopher W. Parker, Pitts, Timothy A. Somers and Thomas T. Thompson.
The senior management team in both LaPlace, La., and Harriman, Tenn.,
remains in place.
Pitts
says the reorganized Bayou has a capital structure and adequate
liquidity to succeed going forward.
AK
Steel Seeks State Tax Relief
Leaders of AK Steel, Middletown, Ohio, say they strongly encourage
the Kentucky General Assembly to enact legislation sponsored by
Sen. Charlie Borders authorizing the Economic Development Cabinet
to grant tax incentives that could aid a $65 million modernization
project for its Ashland Works and for other Kentucky manufacturers.
If
the proposed incentives are approved, the company would commit to
proceeding with its project, deemed necessary to help preserve the
viability of the cokemaking, ironmaking and steelmaking units, or
the front end of the Ashland Works. The project would enable Ashland
Works to produce higher quality steel products for automotive and
appliance manufacturers.
The
major components of the project include a vacuum degassing facility
associated with the steelmaking shop, and a modification to the
continuous slab caster. If the project is finally approved, the
equipment could be operational in 2005.
The
company will seek the support of the United Steelworkers of America
and Paper, Allied-Industrial, Chemical and Energy International
Union, which represent hourly production and maintenance employees
at Ashland Works, to help the company return to a sustainable level
of profitability.
Alcoa Plans
Extrusion Plant in Romania
The European Extruded & End Products Division of Alcoa Inc.,
Pittsburgh, will start building a new extrusion facility in Arad
County, northwest Romania, to serve customers in the building and
construction market.
When
completed in the second quarter of 2005, the facility should employ
about 200 people. The plant will have two press lines and supply
building and construction products to commercial and residential
customers throughout Europe.
Philippe
Royer, president, European Extrusions, says the Arad plant will
be Alcoa’s third facility in Romania. Alcoa Fujikura has two
automotive plants in Romania—one in nearby Chisineu Cris and
the other in Caransebes in southern Romania.
The
unit recently opened a new extrusion press line in Szekesfehervar,
Hungary.
Briefs
Allegheny Technologies Inc. said the results of the integration
trials, which test the combined operational capabilities of ATI
Allegheny Ludlum and J&L Specialty Steel LLC, were completed
to Allegheny Ludlum’s satisfaction. This was one of the conditions
to closing under the Asset Purchase Agreement dated Feb. 16. The
transaction, targeted for a May 3 closing, remains subject to other
conditions.
Macsteel
ranked No. 1 in overall customer satisfaction among engineered steel
bar producers, according to Jacobson & Associates’ most
recent study. The ranking is attributed to Macsteel’s complete
package of high product quality, responsive customer service and
reliable delivery.
Danieli
will perform a major upgrade of Nucor Steel’s No. 2
Mill at Darlington, S.C., as part of Nucor’s efforts to increase
mill uptime and efficiency. Danieli will replace the mill’s
existing nine-stand horizontal intermediate finishing mill with
a new 10-stand twist-free mill. The replacement section will consist
of latest-generation Danieli SHS stands, arranged in horizontal,
vertical and convertible configurations. Last year, Danieli modernized
Darlington’s No. 1 small size mill. Startup of the upgraded
No. 2 mill will begin early next year.
North
Star Steel has successfully begun hot commissioning of its revamped
four-strand continuous caster in Beaumont, Texas. The caster modernization,
performed by Concast, included the ladle turret, powered
shroud manipulator, dual compact tundish cars, full-delta tundishes,
cartridge meter mold assemblies, electromagnetic stirrers, electromechanical
short-lever oscillation system, spray cooling system, new strand
guide, and continuous straightening machines, plus all electrical
equipment and process automation software.
Nucor
Steel has contracted Industrial Automation Services (IAS)
to design, supply and commission a replacement zinc coating mass
control and reporting system for its Crawfordsville, Ind., galvanizing
line. IAS will execute engineering design, project management, installation
assistance, commissioning, operator/maintenance training, and a
12-month, on-line maintenance support program for the system. IAS
conducted the last two cold mill upgrades for Nucor-Crawfordsville.
U.S.
Steel Corp. has agreed to sell 8 million shares of its common
stock at $38.50 per share in an underwritten public offering. U.S.
Steel agreed to an underwriting discount of $1.73 per share with
net proceeds to U.S. Steel of $36.77 per share. The company will
use the net proceeds to redeem 35 percent of the $535 million face
amount of its 10.75 percent debentures. Any remaining proceeds will
be used for general corporate purposes, the reduction of other debt
and payments to employee benefit plans. U.S. Steel granted the underwriters
an option to purchase up to 1.2 million additional shares to cover
overallotments.
International
Steel Group has awarded a contract to Integrated Mill Systems
Inc., Industrial Process Support Services Inc. and Automation
Software & Engineering Inc. to replace Level 1 and Level
2 automation systems on the 84-inch hot-strip mill in Cleveland.
The new automation systems’ functional scope covers the entire
process from furnace charging through to coiling. Commissioning
will be completed this year.
AK
Steel Inc. has, for the 10th consecutive year, earned dual supplier
awards from Toyota Motor Manufacturing North America Inc.:
Superior in Quality and Superior in Delivery for 2003 performance.
AK Steel surpassed an aggregate of 300 consecutive months with 100
percent on-time delivery performance to the Toyota and Lexus plants
it serves in Kentucky, Indiana, California and Ontario, Canada.
AK Steel supplies steel for the Camry, Avalon, Sienna, Sequoia,
Corolla, Tundra, Tacoma, Solara, Matrix and Lexus RX 330 vehicles
produced in North America.
Gerdau
Ameristeel will equip the Consteel electric-arc furnace at its
Knoxville, Tenn., facility with a chemical energy package combining
two Burnjector units, provided by BOC Gases and Moré
of Italy. Charging and melting practices associated with the
Consteel process cause the liquid steel bath level to change considerably.
The Burnjector overcomes this obstacle with its ability to deliver
a highly efficient and coherent oxygen and carbon stream. Start-up
is scheduled for the second quarter 2004. The Knoxville melt shop
produces 450,000 tons of steel per year.
Charter
Steel, Saukville, Wis., received the State Finalist Award from
the American Council of Engineering Companies of Wisconsin
for its wetlands restoration project adjacent to the Milwaukee River.
The project should improve water quality and reduce the potential
for flooding near the specialty bar plant.
SMI
Steel has awarded Danieli Morgårdshammar an order
to upgrade its 800,000 tons-per-year bar and section mill in Seguin,
Texas. The contract includes installation of a new 136 tons-per-hour
automatic stacking and bundling system, to stack flat and square
bars, or provide regular formation of round bar sub-bundles. Startup
is scheduled for early next year.
Niles
Expanded Metals, Niles, Ohio, is manufacturing a new product line
called Experf, a series of expanded meshes designed to replicate
the circular patterns of perforated metals. Niles claims this new
product is a cost-effective alternative to perforated metals.
Morgan
Construction Co. has received a contract from Chicago Heights
Steel, Chicago Heights, Ill., to modernize its bar mill. Morgan
is providing its housingless two-high mill stands as continuous
finishing mill trains in two rolling lines. These stands replace
the old three-high stands of the three rolling lines that are in
a cross-country arrangement and are labor intensive. Once commissioned,
the company will be able to reduce manpower and downtime, while
improving product quality and output.
Inco
Ltd., a nickel mining company based in Toronto, has ordered
three 10-ton single-girder cranes from Morris Material Handling.
They are scheduled for delivery this spring.
The
MORGOIL Bearing Division of Morgan Construction Co landed
a contract from Dalian Heavy Industries to design, manufacture
and install bearings for a new hot-strip mill being built by Dalian
for Laiwu Iron and Steel Co., Laiwu, Shandong Province, China.
Delivery is scheduled for July.
Quaker
Chemical Corp. has been awarded a three-year service contract
covering the management of steel process fluids at Arcelor’s
steel mill in Mardyck, France. Quaker’s partners in the contract
are SGS and Heckett Multiserve.
Outokumpu
American Brass has earned the manufacturing sector’s international
quality standard: ISO/TS 16949, and is certified at its Buffalo,
N.Y., plant.
People
Copperweld
Corp. promoted Dennis McGlone to president and chief
executive officer; he was president and chief operating officer.
The company also hired Pat J. Meneely as vice president of
business services, a newly created position overseeing human resources
and information technology. In addition, the board of directors
elected James A. Loveland as chairman, Andrew P. Hines
as audit committee chairman and W. Allan Hopkins as chairman
of the compensation committee. Before joining Copperweld, Meneely
held executive positions with Covansys, Armco and Wheeling-Pittsburgh
Steel Corp. Loveland was Copperweld’s chief restructuring officer,
before which he was a management consultant, and spent nine years
as president and CEO of WorldSource Coil Coating. Hines has spent
30 years as a senior-level executive in operations, finance, acquisitions
and divestitures, bank relations and capital financing in various
industries. Hopkins has served in executive-level positions in steel
for 20-plus years, with companies such as Stelco Inc., Algoma Steel,
Empire Specialty Steel Inc. and Atlas Steels Inc.
Devin
K. Denner was named vice president and general manager of Chase
Brass & Copper Co., Montpelier, Ohio, following the resignation
of John Steadman as Chase’s president. After leading
Chase through the initial phase of its integration with Olin Brass,
Steadman chose to pursue other opportunities.
Yves
Mansion and Jean-Paul Jacamon have been elected directors
of Alcan Inc. Mansion is chief executive officer of Societe
Fonciere Lyonnaise and a member of the French College de l’Autorite
des marches financiers. He was group managing director of Assurances
Generales de France from 1990 to 2001. Jacamon is non-executive
chairman of Bonna Sabla and of Gardiner Group. He was chief operating
officer and director of Schneider Electric from 1996 to 2002. Mansion
and Jacamon both served on the board of directors of Pechiney, now
a wholly owned subsidiary of Alcan.
International
Steel Group Inc. appointed Rand V. Araskog, James
C. Boland and Peter J. Powers to the board of directors.
Araskog is retired as chairman and CEO of ITT Corp. Boland is vice
chairman of Cavs/Gund Arena Co. and a 34-year veteran of Ernst &
Young. Powers is founder of Powers Global Strategies LLC, a consulting
firm. He was first deputy mayor of New York under former Mayor Rudolph
Giuliani.
Republic
Engineered Products Inc. appointed George E. Strickler to
executive vice president and chief financial officer. He came from
automotive supplier BorgWarner Inc., Chicago, where he was executive
vice president and CFO. Strickler is a former vice president of
finance for Goodyear Tire & Rubber Co., where he worked for
30 years. Republic also appointed Gregory M. Paolini as manager
of the Lorain, Ohio, plant, succeeding James Kuntz, who retires
in May. Paolini had been general manager of International Steel
Group’s plant in Lackawanna, N.Y. Before that, he spent 24
years with Bethlehem Steel Corp.
AK
Steel Corp. has named F.R. “Dick” Smith as
corporate director, safety, filling the role of the company’s
top safety job following the recent retirement of James W. Stanley.
Smith joined AK Steel as safety manager in 1996, and was named corporate
manager, safety, in 1999. Prior to joining AK Steel, Smith served
in various safety and operational roles for U.S. Steel
Joseph
H. Vipperman has been elected to the board of directors of Roanoke
Electric Steel Corp. He is retired as executive vice president
of American Electric Power and is a former president and CEO of
Appalachian Power Co.
Gary
Orr has been named a manufacturer’s representative for
Sandmeyer Steel Co., Philadel-phia. He is working with Sandmeyer’s
sales group to promote and increase nickel alloy plate sales by
developing new accounts, programs and, potentially, new alloys.
Orr previously worked 28 years at G.O. Carlson Inc., most recently
as a marketing manager.
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