WCI eyes options for coke plant

An LTV official said the company's Warren coke plant has only a remote chance of being sold.
By DON SHILLING
VINDICATOR BUSINESS EDITOR
YOUNGSTOWN -- WCI Steel is seeking to delay the closing of LTV's coke plant in Warren as it explores buying the plant or making another type of deal.
Philip Wiese, a lawyer representing Warren-based WCI, asked an LTV executive who was on the stand Tuesday in federal bankruptcy court if LTV would consider other arrangements beside selling the plant, such as keeping it open and selling the coke.
John Turner, LTV chief operating officer, said company officials would consider that.
Wiese said WCI wants LTV to delay the closing of the coke plant as it studies its options. WCI doesn't have enough information yet to try to make some kind of deal for the plant, he said. WCI does not have a coke plant; it buys coke on the market.
The coke plant, which employs about 200, is one of five LTV plants that the company is looking to close. Coke is used in blast furnaces to make molten iron.
Cold idle: Coke plants in Warren and Chicago are in greater danger of closing permanently than the LTV steel mills because LTV is planning a "cold idle," which means the furnaces of the coke plants would be shut off.
Once this occurs, the plants would be virtually useless because it would take a substantial investment to repair the damage that the interior of the furnaces would sustain by the change in temperature, Turner said.
LTV's proposal, which is being reviewed in bankruptcy court, calls for its steel mills in Cleveland and Indiana to be placed on "hot idle" for 60 days and then auctioned. Keeping the mills running at a minimum level would lessen the expense needed to restart them.
The plan calls for a finishing mill in Illinois to be placed on "hot idle" for nine months because it is expected to be the easiest plant to sell, LTV officials said.
Question: Tim Grendell, a lawyer representing the city of Warren, asked Turner why the company would put the coke plants on "cold idle," which would destroy the value of the plants.
Turner said there are few companies that would be interested in buying the plants so LTV has been able to identify them and arrange for them to tour the plants. LTV expects these companies to make quick decisions on whether to buy the plants, he said.
He said there is an oversupply in the coke markets and the chances of selling the plants are remote. He said steel companies are better off buying coke on the open market so they don't have to deal with environmental issues and other issues related to plant operation.
He said three or four companies have expressed interest, however.
Paul Singer, a lawyer for LTV's unsecured creditors, suggested that LTV has chilled interest in the plants by making buyers pay for the cost of a "hot idle" if they want to pursue buying a plant.
He said it seemed that the cost of keeping the plants operational may be the best way to increase the value of the company's estate. Turner said it would cost about $4 million to keep each plant operational for nine months.
shilling@vindy.com