NORTHBROOK, Ill.--(BUSINESS WIRE)--Joint venture partners Hilco SP LLC (“Hilco”) and Environmental Liability Transfer Inc. (“ELT”), an affiliate of Commercial Development Company, Inc. (CDC), today announced completion of their purchase of the former RG Steel Mill at Sparrows Point, located in Baltimore County, Maryland.
The mill at Sparrows Point was idled shortly after RG Steel filed for bankruptcy in May, 2012. Hilco and ELT successfully bid for the property at a public auction, which began on August 7, 2012. On August 15, the sale was approved in the U.S. Bankruptcy Court in Wilmington, Delaware.
Gary Epstein and Randall Jostes, spokespersons for the joint venture, agree, “At this time, we are evaluating all of our options for the property, which include seeking operators for the mill in its entirety or some of the manufacturing facilities and operations within the 3400 acre site. We are also considering removal and resale of industrial equipment and structural demolition followed by environmental remediation of the site as a precursor to redevelopment.”
Prior to the joint venture’s acquisition, Sparrows Point was RG Steel’s largest integrated steel production facility. Sparrows Point demonstrated an annual capacity of 3.6 million tons of crude steel, 2.9 million tons of hot rolled, 1.3 million tons of cold rolled, 480 thousand tons of coated and 470 thousand tons of tin. It is the only fully integrated mill on the East Coast of the United States of America capable of producing flat rolled steel. Major components include the second largest blast furnace in North America, a BOF and continuous caster, hot mill, tin facility, and four galvanizing lines. Additionally, the cold mill, which was originally commissioned in 2000, is considered to be one of the most modern in all of North America.
Epstein and Jostes added, “The evaluation process is expected to take several weeks given the size and scope of the entire operation at Sparrows Point. Based on our early assessment, we believe the state of the art cold rolled mill complex with tri-modal transportation capabilities including rare access to a deep water port has great potential for the right operator.”
Key features of the self-contained cold rolling complex include a continuous pickle line coupled to a VAI continuous five-stand cold rolling mill, tandem mill, and a hydrogen annealing system with an annual capacity of 1,200,000 tons. Also, there are a VAI skin passing temper mill/tension leveling line, two automated coil packaging lines, warehouse facilities and a truck/railroad shipping and receiving system. The building is a standalone unit with 880,000 square feet of floor space and a 15-acre outdoor staging yard with two 40-ton gantry cranes to load and unload rail cars.
Sparrows Point is located in a strategically important position on Chesapeake Bay at the mouth of Baltimore Harbor. The facility includes its own port with access to the Atlantic Ocean and the capability to dock deep-water vessels. The mill also has its own short-line railroad that connects to both the CSX and Norfolk Southern railroads.
Baltimore County officials recently organized the Sparrows Point Partnership, a work group to find ways to develop a sizable piece of land on the Sparrows Point peninsula that is not part of the mill. They believe it has great potential for activities relating to the Port of Baltimore, itself, which will be compatible with the new super-sized ships that will soon begin passing through a widened Panama Canal.
Epstein indicated that both Hilco and ELT are, “…committed to working with local and state leaders and will keep communication open over the coming months.”
The Sparrows Point Steel Mill was opened in 1889 and was the world's largest steel mill, stretching for miles on the southeast edge of Baltimore Harbor. It was first purchased by Bethlehem Steel in 1916 and stood as the largest steel mill in the United States for many years. Over decades, the facility supplied steel for the Golden Gate Bridge, the Chesapeake Bay Bridge and hundreds of ships for World War II. Bethlehem Steel filed for bankruptcy protection in 2001 and Sparrows Point has had four owners since then. OAO Severstal paid $810 million for Sparrows Point 2008. RG Steel bought the mill and other plants from Severstal in 2011.
Within the joint venture, ELT purchased the 3,400 acre Sparrows point site along with certain reusable buildings. They have also assumed specified environmental liabilities associated with the land. Hilco purchased the above grade improvements and machinery and equipment.
Detailed information about all of the assets available at Sparrows Point can be found at WWW.hilcoind.com.
About Hilco Trading, LLC: Headquartered in Northbrook, Illinois (USA), Hilco is a privately-held, diversified financial and operational services firm whose principal competency is understanding and maximizing the value of business assets, including retail, consumer and industrial inventory; machinery and equipment; real estate; accounts receivable; intellectual property; and, going-concern enterprises. Through 500 professionals operating on five continents, Hilco helps companies and their professional advisors assess asset value, maximize value for said assets through asset monetization solutions, and enhance value through advisory and consulting solutions. Hilco serves retailers, wholesalers, distributors and manufacturers, directly and through their lenders, investors and advisors, which can include private equity firms, hedge funds, investment banks, law firms, turnaround professionals, accounting professionals, bankruptcy trustees and receivers. For more information please visit our web site: www.hilcotrading.com.
About Environmental Liability Transfer, Inc.: ELT is a member of the Commercial Development Company, Inc. (CDC) family of businesses. CDC is a leading North American real estate development firm specializing in the development, acquisition and redevelopment of major North American commercial and industrial sites. Since 1990, CDC has acquired over thirty eight million square feet of industrial facilities under roof. As a byproduct of their pursuits, CDC and ELT have acquired, indemnified and alleviated over one billion dollars of environmental liabilities. Major clients such as Caterpillar, General Motors, Textron, Kraft General Foods, Asarco, Uniroyal, Kaiser Aluminum, G. Heileman Breweries, Fruit of the Loom, Chrysler, PMX, ABB, Sanvick Milford, Millennium Chemicals and many more have effectively transferred and disposed of environmental liabilities through CDC/ELT programs. For more information please visit www.ELTransfer.com and www.CDCCO.com.
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