WARREN - After a day of speculation, it appears RG Steel LLC's Warren operation has a new owner lined up.
As of late Wednesday, Monaca, Pa.-based CJ Better Enterprises' bid of $18 million was the highest for the southside mill. Three other sites were auctioned last week, but none of the sales are deemed final until approved in federal bankruptcy court.
Charles J. Betters, founder and owner of the real estate development company, confirmed his company is the "apparent high bidder on the facility." He noted, however, that the transaction has to be reviewed by lawyers handling the company's bankruptcy before it can be finalized.
An aerial view of the RG Steel plant in Warren. The bankrupt steelmaker has agreed to sell the facility. Tribune Chronicle file photos
His team is prepared to complete the purchase agreement as soon as possible, he said Wednesday night by telephone.
If his bid is accepted, Betters said he will pay $17 million for the plant, after receiving a $1 million discount for agreeing to develop a plan to re-open the facility and call some of its furloughed employees back to work.
"My hope is to restart it," he said. "But there's a lot of work to be done. We don't even know if it's ours yet. But the agreement is to try to get it up and running, and that's what we'll try to do. We have to put a plan into action, talk to the governor, the union, everyone involved and see what we can do, what we can come up with. Like I said, it's a lot of work, but we'll try."
Betters said he preferred not to discuss the matter pending the finalization of the sale, but did say he intends to keep company employees informed pending the approval of the sale.
"They have the right to know what is going on," he said.
The Warren mill employed about 1,200 workers.
United Steelworkers Union 1375 President Darryl Parker on Wednesday would not comment about the potential sale of the company.
Privately held RG Steel - the nation's fourth-largest flat-rolled steel manufacturer - filed for Chapter 11 bankruptcy protection on May 31, stating it could not overcome the deterioration of the steel market and would sell off the three plants it bought last year from Russian steelmaker Severstal for $1.2 billion.
Warren Mayor Doug Franklin is hoping that the plant will be reopened in some capacity.
"Reopening of the plant would be in the best interests for the workers, their families and the surrounding community," Franklin said. "The city will be willing to assist in the process to make sure the facility can be a viable plant today and into the future."
Having the plant in operation also is in the city's financial interest.
It represented an estimated $250,000 a year to the city's general fund balance and as one of the city's largest users of water. It purchased approximately $1.3 million worth of water from the city, according to Franklin.
"It would be beneficial even if it is smaller when it reopens," Franklin said.
Charles Bradford, president of Bradford Research Group, which monitors the metals industry, expected the Warren plant to have the greatest potential for reopening after a sale because it makes a high carbon steel that is not made by a lot of its competition.
"That's a big advantage that the other plants did not have," Bradford said. "Of course, the plant also has its disadvantages. It does not have its own raw materials needed for the steel and it likely will need to purchase a new blast furnace as well as other equipment."
Trumbull County Commissioner Daniel Polivka said he hopes the winning bidder is serious about efforts to restart the plant instead of dismantling it and selling its assets.
"We need to be proactive," Polivka said. "We (local governments) need to make conference calls and let the company officials know we are here to work with them to keep the plant open.
"I'm willing to make the call," Polivka said.
A Delaware judge has approved the sale of two Ohio facilities owned by bankrupt steelmaker RG Steel.
The judge on Wednesday approved the sale of RG Steel's Mingo Junction and Martins Ferry facilities for $22 million.
A hearing on the sales of other RG Steel assets, including the Sparrows Point steel mill near Baltimore, is scheduled for next week. An auction for the Sparrows Point mill on Tuesday ended with a concluding bid of $72 million from Hilco Industrial, a company that specializes in industrial liquidations.
Frontier Industrial Corp. submitted a winning bid of $20 million for the Mingo Junction facility. An attorney for Frontier said parts of the Mingo Junction facility will be demolished, but that there is a chance that certain operations at the site could continue.
The Associated Press contributed to this report.