Chinese Steel Maker Seeks Assets of Geneva Steel

Qingdao Iron & Steel, one of the largest steelmakers in China, is looking to acquire the Utah-based Geneva Steel operations. However, the company is not looking to restart the mill in Utah; rather, the company is expected to purchase the mill’s production equipment for around $35 million, dismantle the equipment, and ship the equipment overseas.

The U.S. Bankruptcy Court is expected to decide next month on whether to allow the sale.

Geneva was one of many U.S. steel companies to file for bankruptcy protection. In early 1999 the company sought relief under Chapter 11 of the U.S. Bankruptcy Code, emerging a short time later with its debt reorganized and a $110 million government guaranteed loan.

However, the company reentered Chapter 11 protection January 2002.

A faint hope remains that Geneva may rise from its own ashes in Utah County.

In documents filed with the U.S. Bankruptcy Court for Utah, Geneva indicates it plans to continue to solicit higher and better offers for the assets until the end of January. The Qingdao sale will be considered in a U.S. Bankruptcy Court hearing Feb. 4.

"If we receive a better offer, or if someone steps forward who is willing to acquire the plant and return [Geneva] to production then we can still call off the sale to Qingdao and hold an auction," said Stephen Garcia, a Chicago attorney who is representing Geneva in its bankruptcy.

Qingdao is one of the largest steel producers in China, operating in the western province of Shandong. It employs more than 18,000 workers and produces more than 1.2 million metric tons of iron and 1.2 million metric tons of steel a year. Salt Lake (Utah) Tribune