Renco Group: RG Steel to become fourth-largest flat rolled steel producer in US

Fri, Mar04, 20100

US-based private investment holding company Renco Group has announced that, following the acquisition of three steel companies currently owned by Russian steelmaker Severstal estimated at $1.2 billion, its newly-formed subsidiary RG Steel will become the fourth-largest flat rolled steel producer in the US.

Accordingly, in addition to Severstal's Sparrows Point, Warren and Wheeling facilities, RG Steel will acquire a 50 percent ownership interest in Mountain State Carbon LLC, a cokemaking facility in Follansbee, West Virginia, and Ohio Coatings Company, based in Yorkville, Ohio. RG Steel will receive one half of the coke output from Mountain State Carbon and will continue its long-standing relationship with Ohio Coatings Company. The purchase of these assets will provide RG Steel with approximately 7.5 million mt of annualized steelmaking capacity.

"The formation of RG Steel will create a dynamic, service-oriented company with strategically located facilities," Renco Group's president Ari Rennert stated.

RG Steel will be headquartered at Sparrows Point, Maryland. Completion of the sale is expected in March 2011, pending regulatory approval.

Severstal sells Warren, Wheeling and Sparrows Point US-based facilities

Wednesday, 02 March 2011

The Russian steel and mining company Severstal has announced that it has entered into a definitive agreement to sell three assets of its North American division Severstal North America, including the Sparrows Point, Warren and Wheeling facilities, to the Renco Group, a US-based private holding company.

The transaction is expected to be completed in March 2011, subject to customary completion conditions, including expiration or early termination of the Hart-Scott-Rodino waiting period.

As transaction consideration, Severstal will receive $125 million in cash, a $100 million secured note, and the repayment of $317 million of third-party debt at closing. Renco will also assume various Severstal financial liabilities including employee-related and environmental liabilities totaling $650 million.

The sale will leave Severstal North America focused on its Dearborn and Columbus facilities which are some of the most modern and efficient in North America, said the company.

Tags: USA , Russia , CIS , North America , Severstal , M&A , steelmaking