Argentina's Ternium eyeing Severstal's Sparrows Point - press
MOSCOW. Dec 8 (Interfax) - Argentina's Ternium S.A. is interested in buying Baltimore-based Sparrows Point, one of Severstal International's three that have been put up for sale, the Baltimore Brew publication said, quoting unnamed sources.
"The Ternium steel group is actively seeking to buy Sparrows Point," the local publication said. The Argentine company, controlled by Italian industrialist Paolo Rocca, joins three other parties previously identified in media accounts as bidders for Sparrows Point, it said.
With the Baltimore County mill barely working and more than 800 union employees laid off, the United Steelworkers Union (USW) is pressing Severstal to sell the facility by the end of the year, the publication said.
A source cautioned that the Ternium bid should be considered a long-shot, since it arrived after the other bids were submitted, it said.
In Ternium's favor, however, is Severstal owner Alexei Mordashov's reported dissatisfaction with the other offers, Baltimore Brew said. Representatives of Mordashov have hinted that the company may keep Sparrows Point idled until either steel prices rebound or higher bids are received, it said.
Following the first round of bids submitted by October 22, Ternium executives inspected the Baltimore mill on the ground and in helicopter flyovers, sources told The Brew. They outlined to union representatives their plan to fire up the "L" blast furnace, which Severstal idled in July.
The potential sale of the three assets would reduce Severstal's smelting capacity in the U.S. by 7.4 million tonnes to 3.7 million tpa.
Severstal's North American segment includes five steel mills: Severstal Dearborn, Severstal Columbus, Severstal Sparrows Point, Severstal Warren and Severstal Wheeling.
Severstal International had negative earnings before taxes, depreciation and amortization (EBITDA) of $59 million in Q3 2010, compared with positive $59 million in Q2 2010 due to a worsening situation in the U.S. steel market and higher raw material costs. Severstal has assets in Russia, North America, Europe and Ukraine. The main beneficiary is the general director, Alexei Mordashov, with more than 82% of shares. About 18% are in free float.