CLEVELAND ISG shares surge in market debut

Shares of ISG's competitor U.S. Steel have climbed 132 percent this year.
CLEVELAND (AP) -- Shares of International Steel Group Inc., formed from bankrupt steelmakers over about the past two years, surged 22 percent in their market debut Friday.
ISG, the nation's second-largest steelmaker behind U.S. Steel Corp., sold 16.5 million shares for the initial public offering late Thursday at $28 per share. That was well above the $22 to $24 a share range the company said it expected.
To pay down debt
ISG raised $462 million that it planned to use to pay down debt.
The shares began trading Friday on the New York Stock Exchange under the ticker symbol "ISG." By midafternoon, they changed hands at $34.19, up $6.19 from the offer price.
"I'm delighted that investors who represent a very wide, very high-quality group of professional investors around the world put their faith in our company," Chairman Wilbur Ross said by phone from New York.
"I'm delighted they have gotten an instant premium out of it because they made an act of faith."
ISG, based in suburban Richfield, produces more than 18 million tons of steel products produced annually and ships a variety of steel products from 11 steel producing and finishing facilities in six states.
Mark Granakis, president of United Steelworkers Local 979 representing ISG workers, was thrilled with Wall Street's response.
"It certainly shows the investor confidence in our company that we're doing the right thing in the right way," he said.
Stock valuations in the industry reflect "strong steel fundamentals in North America," said Christopher Olin, an analyst at Longbow Research in Independence in suburban Cleveland.
U.S. Steel shares
Shares of industry leader U.S. Steel have risen 132 percent this year.
While the Bush administration plans to end tariffs on steel imports, the domestic industry could be helped by expanded consumption by China and its fast-growing economy. China is expected to use 300 million tons of steel next year, compared with 120 million in the United States.
Ross specializes in buying distressed companies and turning them around, often by making deep cost cuts. His buyout group WL Ross & amp; Co. LLC bought assets of bankrupt companies LTV Steel Co. in the spring of 2002 and later bought Acme Steel Corp. and most recently Bethlehem Steel Corp.