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June 13, 2012
RG Steel, the country’s fourth-largest steelmaker, has filed for Chapter 11 bankruptcy protection. The filing follows the May decision to idle its three major steelmaking operations.
“Despite the company’s aggressive cost-reduction efforts, significant improvements in its cost structure and substantial investment capital, the company has been unable to overcome the impact of the continued deterioration of the market and the inability of the industry to sustain a meaningful recovery,” says John Goodwin, CEO of RG Steel.
After an analysis of the company’s liquidity position and available alternatives, management concluded that a voluntary Chapter 11 filing provided the most prudent and effective means of maximizing the value of the core business. “By voluntarily filing for Chapter 11, we will have the opportunity to use the court-supervised process to implement an orderly asset preservation plan and explore other options, including soliciting offers to purchase all or certain of the company’s assets. We have already begun a sales process aimed at maximizing value for all stakeholders and preserving the jobs created when RG Steel acquired these facilities” Goodwin says.
Shortly after filing, Wheeling, W.Va.-based recycling company Herman Strauss made a bid on 112 acres of land, plus buildings, equipment and scrap metal, in Steubenville, Ohio. Strauss bid $15 million for the parcel, though other potential bidders have until June 20 to improve on the bid.
RG Steel has steelmaking facilities in Sparrows Point, Md.; Warren, Ohio; and Wheeling, W.Va.; plus additional finishing facilities in Yorkville and Martins Ferry, Ohio. In addition, RG Steel owns Wheeling Corrugating Co. and has a 50 percent ownership in Mountain State Carbon and Ohio Coatings Co.
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