AP NEWS
Related topics

Russian Steel Company Bids $215M on Rouge

November 22, 2003

DETROIT (AP) _ A Russian steelmaker agreed to pay about $215 million for Rouge Industries Inc., the Dearborn-based steel company announced Friday.

Rouge, which previously had signed a letter of intent with Russia’s Severstal, said the companies signed a purchase agreement for substantially all of Rouge’s assets.

The U.S. Bankruptcy Court in Wilmington, Del., still must approve the deal, and other companies could submit competing bids.

Rouge previously asked the court to grant Severstal the right to bid first for Rouge’s assets. That proposal was met with objections from U.S. Steel, which said Rouge did not disclose that it received a purchase offer from the Pittsburgh-based steel maker.

A division of the Justice Department also objected to the proposal, saying that Severstal could just walk away without a definitive sales agreement.

``Throughout our deliberations in making our recommendation to the U.S. Bankruptcy Court, the interests of the company’s creditors have been paramount,″ Carl L. Valdiserri, Rouge’s chairman and chief executive, said in a statement. ``We have also considered other factors that would bear on the final outcome of the process, including a prospective buyer’s ability to satisfy their conditions to closing, the financial stability of the company during the period required to close the transaction, and the impact on other stakeholders in this process.″

He said Rouge would ask the court to set an expedited bidding period.

AP RADIO
Update hourly