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RG Steel Plans for Restart of Former Severstal Facilities

04/04/2011 - RG Steel completes its stock purchase of three U.S. assets from Severstal US Holdings, LLC. Employees are being recalled to the Sparrows Point facility, with the blast furnace scheduled to become operational in May.

RG Steel, LLC, an affiliate of The Renco Group, Inc., has completed its stock purchase of three U.S. assets from Severstal US Holdings, LLC.  With completion of this purchase, RG Steel has 7.5 million tons of annualized capacity, making it the fourth-largest flat-rolled steel producer in the United States.
 
RG Steel now comprises integrated steel plants at Sparrows Point, Md.; Warren, Ohio, and Wheeling, W. Va., including finishing facilities in Yorkville and Martins Ferry, Ohio, and the Wheeling Corrugating Co. in Wheeling, W.Va.  In addition, RG Steel now owns 50% of both Mountain State Carbon LLC, a cokemaking facility in Follansbee, W.Va., and Ohio Coatings Co. in Yorkville, Ohio. The company is led by John Goodwin, President and Chief Executive Officer.
 
"Our plan for RG Steel is to become the leader in the manufacture and supply of flat-rolled steel and to provide exceptional customer service,” said Goodwin.  “We have the facilities, we have the capital, we have the talent and we have the will to succeed. Our plants and our products are well known in our markets, and we will capitalize on our strengths to become the leading producer of flat-rolled steel in the United States."
 
Goodwin added that "preparations are under way to restart the primary operations through the hot strip mill at our Sparrows Point, Md., plant. Employees are being recalled to that facility as we plan for a safe and orderly resumption of operations.  
 
“We anticipate that the blast furnace at Sparrows Point will become operational in May," added Goodwin.
 
As part of the transaction, Wells Fargo Capital Finance, part of Wells Fargo & Company, and GE Capital, Corporate Finance, structured a new four-year $750-million syndicated credit facility. The facility, which was oversubscribed, has 12 international banks and financial institutions in the syndicate with Wells Fargo, GE Capital Markets, Inc., Bank of America Merrill Lynch and UBS Investment Bank acting as Joint Lead Arrangers and Joint Book Runners.
 
For this transaction, Cadwalader Wickersham & Taft were retained for legal counsel while UBS and Metal Strategies were retained as financial advisors.
 
RG Steel, LLC is the nation's fourth-largest flat-rolled steel producer with annual steelmaking capacity of 7.5 million tons. Its steelmaking facilities are located in Sparrows Point, Md.; Warren, Ohio, and Wheeling, W. Va., and additional finishing facilities are in Yorkville and Martins Ferry, Ohio. RG Steel also owns Wheeling Corrugating Co. and has a 50% interest in Mountain State Carbon and Ohio Coatings Co.
 
The Renco Group, Inc. is a private family-owned investment holding company founded in 1975 by Ira L. Rennert. Based in New York, the company has established a reputation as a global leader within a diverse range of businesses. With more than $5 billion in portfolio company revenues and 18,000 portfolio employees worldwide, The Renco Group, Inc. provides its affiliates with the long-term stability and support necessary for its management teams to maximize the inherent value of their companies across a range of industries where we see value and growth. The Group provides a permanent home for its family of companies; building value over time by retaining earnings and reinvesting in each business.