US Steel Canada Said Draw to Final Bids From KPS, Bedrock, Essarby
ERP Compliant Fuels said to drop out of bidding process
Essar said to plan to restart Hamilton if successful
U.S. Steel Canada Inc., the former unit of U.S. Steel Corp. that is under creditor protection, received final-round offers from KPS Capital Partners, Essar Group and Bedrock Industries, people with knowledge of the matter said.
Another interested suitor, ERP Compliant Fuels, is no longer in the bidding process, said the people, who asked not to be identified because the information is private. ERP dropped out after submitting an offer valued at about $1.5 billion.
As part of its proposal, India-based Essar would aim to restart U.S. Steel Canada’s operations in Hamilton, Ontario, according to a person familiar with the matter. It plans to use part of the funds from a proposed sale of a stake in Essar Oil to Russia’s Rosneft OJSC to help finance the investment, one of the people said.
Representatives for Essar, KPS, U.S. Steel Canada, and ERP Compliant declined to comment. A representative for Bedrock Industries didn’t respond to requests for comment.
U.S. Steel Canada operates two principle facilities: Lake Erie Works in Nanticoke and Hamilton Works.
Lake Erie Works is an integrated steel mill with annual capacity of 2.7 million tons of raw steel production, and is the more valuable of the two assets, according to the people familiar with the matter.
The older Hamilton Works’ steelmaking operations were permanently shut down in 2013 after being idled since 2010, according to bankruptcy court documents. Its operations now consist of coke ovens and the capacity to finish and galvanize steel.