Sparrows Point, Maryland-based flat rolled steelmaker RG Steel announced Thursday that it has filed petitions under Chapter 11 of the United States Bankruptcy Code with the United States Bankruptcy Court for the District of Delaware. The company was formed in March 2011. John Goodwin, CEO of RG Steel commented "Despite the Company's aggressive cost reduction efforts, significant improvements in its cost structure, and substantial investment capital, the Company has been unable to overcome the impact of the continued deterioration of the market and the inability of the industry to sustain a meaningful recovery."
As stated in the company's press release, RG Steel decided after a thorough analysis of its liquidity position and extensive consideration of available alternatives that a voluntary Chapter 11 filing provided the most prudent and effective means of maximizing the value of its core business. "By voluntarily filing for Chapter 11, we will have the opportunity to use the court-supervised process to implement an orderly asset preservation plan and explore other options, including soliciting offers to purchase all or certain of the Company's assets. We have already begun a sales process aimed at maximizing value for all stakeholders and preserving the jobs created when RG Steel acquired these facilities" Goodwin stated.
A week ago, RG announced it would be idling its steel mills in Sparrows Point, Maryland, Wheeling, West Virginia and Warren, Ohio and would begin layoffs on June 4.
Also on Thursday, local news reports indicated that Esmark Steel made a bid for RG's Wheeling Corrugating, which includes the purchase of RG Steel Wheeling headquarters. Esmark previously owned Wheeling Corrugating.