Historic Sparrows Point Steel Mill Sold For $72M
- Aug 21, 2012
On Wednesday, August 15, a federal bankruptcy judge in Wilmington, Delaware, approved the sale of the historic Sparrows Point steel mill. The property was sold to liquidator Hilco Trading of Illinois and St. Louis-based Environmental Liability Transfer for about $72.5 million. Its owner, RG Steel LLC, filed for Chapter 11 bankruptcy protection in May. RG Steel also sold its steel mill in Warren, Ohio, to C.J. Betters Enterprises for $17 million.
Sparrows Point first started making steel in 1889. It was purchased by Bethlehem Steel, once America’s second-largest steel producer and largest shipbuilder and, by the mid-20th century, was the world’s largest steel mill. Sparrows Point was a vital part of the war effort in both World Wars and, at its height, it employed tens of thousands of workers and produced hundreds of ships. Steel for the Golden Gate Bridge was forged there.
Bethlehem Steel filed for bankruptcy protection in 2001. Since then, Sparrows Point has had four owners. OAO Severstal acquired it in 2008 for $810 million. The Russian steelmaker sold it just last year together with other plants to RG Steel for $1.2 billion. That’s why some steel analysts have commented that the current price is ridiculous. The mill sits on more than 2,400 acres of land, south of Interstate 695.
When RG Steel filed for bankruptcy, it was the fourth largest producer of flat-rolled steel in the United States. It will use the money raised from the auctions to repay its creditors. When RG Steel closed the steel mill, 2,000 workers were left without jobs. Sparrows Point was one of Baltimore County’s largest private employers until the layoffs.
At the meeting, on Wednesday, the parties resolved some issues regarding the site’s environmental problems. Hilco Trading LLC won the bidding for Sparrows Point offering $72 million for the Baltimore County steel mill at an auction held two weeks ago. But it agreed to pay $500,000 more for a study to see if steel-making toxins have migrated from the mill to the waters around it. Hilco also said it is interested in finding operators to restart work at the mill, giving at least a little hope to the 2,000 that recently lost their jobs.
Charts courtesy of CBRE.
Image courtesy of the United States Environmental Protection Agency.