Sharon Steel, British Investor Bid For Idle Plant
PITTSBURGH (AP) _ A bankruptcy court judge is expected to rule Monday on which of the bidders from around the world should be authorized to buy major portions of an idled Wheeling-Pittsburgh Steel Corp. plant.
Bids for the plant in Monessen, Westmoreland County, came from Australia, Britain, South Africa, California and Pennsylvania.
The plant is on the block as part of Wheeling-Pittsburgh’s reorganization under Chapter 11 of the bankruptcy laws.
The bids were considered by Judge Warren Bentz on Thursday, which was the deadline. The judge postponed his decision over the objection of Wheeling- Pittsburgh’s creditors.
The sale is a crucial issue in Monessen, whose economy has suffered through the loss of 3,500 jobs that once existed at the plant.
The front-runners appeared to be British industrialist Michael Wilkinson and Sharon Steel Corp., a holding of Miami Beach financier Victor Posner that is also in Chapter 11.
Sharon bid $16 million for the coke batteries, iron and steel furnaces and related rolling mills. BMAC Corp., Wilkinson’s California company, offered $15 million. Both bids carried complex conditions on payment schedules, interest rates, royalties and other issues.
Sharon Steel’s chief execuitive, Walter Sieckman, said his company desperately needs a supply of coke to fuel its newly refurbished ironmaking furnace in Mercer County.
Sieckman said Sharon might be forced to close one of its two blast furnaces if it cannot get coke from Monessen, and a Sharon Steel attorney threatened to withdraw the bid because Bentz would not rule immediately.
BMAC until recently was the only bidder for the plant. The company signed a letter of intent in December to buy the coke ovens, which convert coal to blast furnace fuel.
Australian businessman Colin Good offered $60 million for the entire plant, but Bentz said the offer ″had conditions in it that are impossible to meet.″ Among them was a requirement that Wheeling-Pittsburgh, whose primary plant is in Steubenville, Ohio, to purchase 22 million tons of low-grade iron ore from him over the next 10 years.
Mon Valley Steel Co., a local investors’ group led by Monessen businessman Frank Carlow, bid $14 million for all but the plant’s rail mill, which forms semi-finished steel into rail for transportation.
Carlow was unwilling to drop an important condition that could deduct $2 million from the purchase price. Sharon Steel and BMAC agreed to drop the same condition.
Bentz, meanwhile, granted the Economic Development Administration a 120-day extension to solicit new bids for the 7-year-old rail mill, the centerpiece of the Monessen Works. The EDA helped finance the mill, forecosed and is selling it to recover public funds.
The South African steel producer ISCOR Ltd. of Pretoria and Sharon Steel submitted separate bids for the plant’s continuous bloom caster, a machine that shapes molten steel into semi-finished forms for the rail mill’s use.