Lenders: Finding buyer is unlikely

THE VINDICATOR, YOUNGSTOWN
CSC and the local union say it's too early to declare that the company is dead.
By DON SHILLING
VINDICATOR BUSINESS EDITOR
YOUNGSTOWN -- Chances that CSC Ltd. will find a buyer willing to operate its ailing steel mill are "very remote," an attorney for the company's lenders said.
"We are not optimistic of someone coming in and starting up the plant," Ronald Hanson told Judge William Bodoh Thursday in U.S. Bankruptcy Court in Youngstown.
Not finding a buyer would mean the certain loss of all 1,300 hourly and salaried jobs at the Warren mill because equipment would be sold piece by piece.
Response: After the hearing, Don Caiazza, a CSC spokesman, said he thinks CSC does have a chance of finding a buyer and thinks no one should jump to conclusions before the April 13 sale deadline that was agreed to by the lenders.
"It's a matter of opinion at this time because the full matter hasn't run its course," he said.
John Kubilis, president of United Steelworkers Local 2243, also said he thinks the mill has a chance to continue operating. The union has hired a consultant to research the possibility of an employee buyout of the company.
Results of the study are to be announced today, but the union has said that the consultant has been impressed with the quality of CSC's steelmaking equipment. The Reserve Group, the company's Akron-based owner, invested $100 million in modernizing the mill over the past two years.
Called obsolete: Hanson, however, called the plant old and in some respects obsolete. He questioned why a buyer would buy a company that couldn't make money last year, given that there is too much capacity in the steel-making industry.
He said the current thinking among steelmakers is that weaker companies are hurting the industry because they are adding supply that isn't needed.
CSC's lenders gave the steelmaker until April 13 to find a buyer as part of bankruptcy court proceedings. CSC has been operating under bankruptcy protection since January and now has nearly all employees laid off.
Hanson's comments came during a hearing on whether health care benefits and other benefits should be extended for laid-off workers and retires until April 13. Bodoh is considering the matter.
Workers: Hanson said he thinks CSC has too many people working on mothballing the mill, or preserving it so can started up more quickly by a buyer.
CSC hasn't provided any evidence that a buyer is out there or that selling the entire operation will raise more money, he said.
"There's no letter of intent, no cash on the table. There's just some tire-kicking going on," he said.
Prospects: CSC has said six prospective buyers are showing some interest in the mill.
Hanson said the lenders think more money can be raised by selling the mill piece by piece.
Jeffrey Baddeley, who is representing CSC, told the judge that he thinks selling the mill as a whole would raise between $10 million and $14 million more than a piece-by-piece sale.