Italian Company Buys Division of Sharon Steel
Feb. 12, 1993
PITTSBURGH (AP) _ An Italian company was the top bidder for Sharon Steel Corp.'s Damascus Tube division in an auction in bankruptcy court.
The offer by Milan-based Marcegaglia SPA totaled $13.9 million, including the assumption of Damascus Tube's debt of about $3.7 million, said Philip Beard, an attorney for a group of Sharon Steel's unsecured creditors.
The auction took place late Wednesday.
Sharon Steel is trying to reorganize under Chapter 11 of the federal bankruptcy code. The cash from selling Damascus could help the struggling company restart its mill in Farrell.
George F. Werner, president of Damascus, said the new owners of the stainless tube maker may expand production but probably won't expand its work force significantly. The mill and headquarters in Greenville employ about 180.
The unsecured creditors represented by Beard support Sharon's plan to produce specialty steels in Farrell. The company's bankers have doubted Sharon can survive.
Marcegaglia's winning bid was roughly $750,000 higher than that of Castle- Harlan Inc., the New York investment banking firm that is Sharon's biggest shareholder.
Two years ago, the Italian steelmaker bought Bishop Tube, an idle mill it is renovating near Philadelphia.