Liquidator Hilco Industrial said that the Sparrows Point steel mill will be auctioned in January 2013 if buyers don't step forward for all or part of the property.

Bids are due by December 21st 2012 and an auction will be held on January 3rd 2012 if necessary with a closing date no later than January 11th 2012. Officials want to make sure potential operators have plenty of time to bid.

Hilco said that interested buyers can purchase and operate one or more independent steel production lines or the entire Sparrows Point mill without being the landowner of the underlying property, adding that buyers will not be liable for past environmental contamination at the site.

A federal bankruptcy judge approved the USD 72 million sale of the Sparrows Point steel mill last month to Hilco and its partner, Environmental Liability Transfer. Buyers can also remove production line equipment from the site.

The mill outside Baltimore employed more than 2,000 before RG Steel filed for bankruptcy, and employees have been hoping the liquidators would find buyers interested in operating the mill again instead of dismantling it. Hilco is advertising the mill on its website as one of the world's largest steel mills with rare access to a deepwater port.

RG Steel, the nation's fourth largest, flat rolled steel manufacturer, sought bankruptcy protection in late May 2012, citing financial struggles stemming from low steel prices and high raw material costs. RG Steel acquired the former Bethlehem Steel mill from Russian owned Severstal North America in 2011 in a USD 1.2 billion deal that also included plants in West Virginia and Ohio.

Attorneys for Hilco and Environmental Liability have agreed to establish a USD 500,000 escrow fund to pay for offshore investigation of water contamination at the mill and assume RG Steel's obligations under a water quality monitoring agreement with environmental regulators.

Source - Associated Press

(www.steelguru.com)