Allenport deal collapses
Severstal North America's deal to sell a closed Allenport steel mill has fallen through, mostly because the prospective buyer's lack of money, the steelmaker said Thursday.
Severstal's negotiations with the buyer William "Russ" Kingston of Chino Hills, Calif., ended last month and the company is looking at its options, spokeswoman Bette Kovach said. Kovach declined to describe those options.
The plant was shut down by previous owner Esmark Inc. in May 2008. Severstal, based in Dearborn, Mich., acquired it in June 2008 when it bought Esmark.
"We have not seen a plan from Mr. Kingston that is seen as meeting the needs or the desires of Severstal North America," Kovach said. While there were a "variety" of reasons for the collapse of the negotiations, a lack of financing was the primary reason, she said.
Kingston said yesterday that he is still trying to secure financing. He hopes to have a final word by Jan. 15. He previously said he had investors through his North American Trading Co.
Kingston has said he hopes to spend $400 million to modernize the plant to produce cold rolled sheet steel that is coated with a thin layer of stainless steel. Without special equipment, it is not worth buying the plant, he said.
He hoped to create about 90 jobs initially, then build the work force to 250 employees over several years.
Kingston did not reach an agreement with the United Steelworkers, which represented about 235 workers at the plant when it closed.
Rick Bergstedt, president of the United Steelworkers Local 1187 at Allenport, and David McCall, head of USW talks with Severstal, could not be reached for comment.