Slater Steel Continues Disposition of Assets

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Researched by Industrialinfo.com (Industrial Information Resources; Houston, Texas). Troubled Slater Steel (Mississauga, Ontario) is finishing up the task of disposing of its assets. Slater filed for bankruptcy protection in June 2003, both in the U.S. and in Canada.

The company abandoned its original plans to pursue a stand-alone restructuring of Atlas Stainless Steel and Hamilton Specialty Bar divisions, due to a number of factors that together made that plan unfeasible, and in January of this year, decided to shut down operations at both facilities. The company had already sold its Renown Steel Division (Scarborough, Ontario) in May 2002. The 2003 bankruptcy filing includes all of Slater's remaining operating business units - Atlas Stainless Steels, Atlas Specialty Steels, Fort Wayne Specialty Alloys, Hamilton Specialty Bar, Sorel Forge and Slater Lemont.

Atlas Specialty Steels (Welland, Ontario), acquired by Slater from Atlas Steels in August 2000, was sold to Centre Steel Holdings (Toronto, Ontario) in April 2004 for an unspecified amount. According to a company source, Centre Steel Holdings, a consortium about which little is known publicly, has not yet decided the fate of the mill, whether it will be re-commissioned by Centre Steel itself or when or if it will be re-sold to another operating party.

Hamilton Specialty Bar, now known as HSB Steel (Hamilton, Ontario), one of North America's most technologically advanced producers of Special Bar Quality carbon and alloy rounds and flats, was sold in March of this year to Delaware Street Capital (DSC) (Chicago, Illinois) for $16 million cash, plus assumption of $24 million legacy costs and a $1 million-backed promise to rehire 224 former Slater employees. The transaction became final in May 2004. DSC plans to eventually resell Hamilton Specialty Bar at an unspecified future time, but intends to keep it running and producing product for its customers for the present time. HSB's products are used primarily for automotive components such as drive trains, suspension systems, engine components and critical safety systems in linkage and steering assemblies.

Sorel Forge (Sorel-Tracy, Quebec), the largest integrated open-die forging plant in Canada, produces mold, tool and die steels, custom forgings and forged steel bars and is among the few facilities in the world that is capable of producing large mold blocks of up to 55,000 pounds. Mold steels are principally used to produce molds for the plastic injection industry. Tool and die steels are used by the zinc, aluminum, and die casting industries. Custom forgings, produced in various shapes and physical properties, are used in the capital goods industry, typically in heavy machinery for the petrochemical, pulp and paper, steel, mining, nuclear, and hydro-electric power generation industries. Sorel employs approximately 270 hourly and salaried employees.

In January 2004, Slater signed an agreement to sell Sorel Forge to Tricap Restructuring Fund. However, in February, A. Finkl & Sons Company (Chicago, Illinois) offered $41 million for the operations, a marked improvement over Tricap's offer, and Slater decided to accept the higher offer and pay a break-up fee to Tricap. A. Finkl & Sons Company is a U.S.-based manufacturer of forging die steels, plastic mold steels, die casting tool steels and custom open-die forgings.

Slater Lemont Corporation (Lemont, Illinois) was recently sold for $9.5 million to Nucor Corporation (Charlotte, North Carolina). The mill had been idled in February 2001, and purchased by Slater in September 2002 from Austeel Lemont Division of Auburn Steel Company Incorporated, for $7 million cash. Slater recommissioned this mill, after an extensive upgrade, in December 2002, then idled it in 2003.

Fort Wayne Specialty Alloys (Fort Wayne, Indiana) was sold in February 2004 to Valbruna Stainless Steels (Oakland, New Jersey), the U.S. subsidiary of Acciaierie Valbruna (Vicenza, Italy), a major European stainless long products producer. Valbruna's offer bested the $3.19 million bid of rival bidder, Universal Stainless & Alloy Products, Incorporated (Bridgeville, Pennsylvania).

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