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RG Steel Restarts Blast Furnace at Sparrows Point, Strengthens Liquidity with New Capital
01/23/2012 - RG Steel announced that the “L” blast furnace at its Sparrows Point plant has resumed operations and should reach normal operating rates within several days. The company also announced that affiliates of Cerberus Capital Management, L.P. and The Renco Group, Inc. have committed to provide RG Steel with significant new capital that improves its liquidity and provides the financial ability to execute its business strategy.
RG Steel announced that the “L” blast furnace at its Sparrows Point plant has resumed operations. The “L” furnace is expected to reach normal operating rates within several days.
Steelmaking continued at the company’s Warren facility while the “L” furnace was idled, and downstream operations at Sparrows Point and Yorkville continued processing customer orders. Customers have been notified that orders already on the books at Sparrows Point are being scheduled for production on an expedited basis. The company is accepting new orders and acknowledging new promise dates.
In a related release, the company also announced that affiliates of Cerberus Capital Management, L.P. and The Renco Group, Inc. have committed to provide RG Steel with significant new capital that improves its liquidity and provides the financial ability to execute its business strategy.
RG Steel noted that shortly after the company was formed in March 2011, steel prices sharply declined. Combined with unprecedented increases in raw material costs, this strained liquidity at an early stage in the company’s formation.
“With this new capital in place and improving market conditions, RG Steel is well positioned to service its customers now and in the future,” said V. John Goodwin, President and CEO. “On behalf of RG Steel, I want to extend my gratitude and appreciation to our customers; employees; United Steelworkers Union; suppliers; Renco; Cerberus; political leaders in Maryland, Ohio and West Virginia; and our bank group for their support.”
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. In addition, RG Steel owns Wheeling Corrugating Co. and has a 50% interest in Mountain State Carbon and Ohio Coatings Co.
