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Steel plant deal in jeopardy
A deal for the purchase of the mothballed ArcelorMittal Iron and Steel Plant by Nu-Iron Unlimited could be in jeopardy as the company has threatened to walk away because of failure to reach agreement with state-owned National Energy for use of a port.
Sources close to the negotiations said negotiations between Nu-Iron—a subsidiary of United States company Nucor—and National Energy, part of the NGC Group of Companies, for the use of the port at Point Lisas has been protracted and Nu-Iron has threatened to walk away from the deal.
In a response to questions from Business and Money, National Energy officials would only say it was involved in mature discussions with Nu-Iron.
The company stated: “Please be advised that National Energy has been in mature and deliberate discussions with Nu-Iron. These discussions are at a very advanced stage. At an appropriate juncture, an announcement would be made by the parties.”
More than two years ago, ArcelorMittal shut down its plant at Point Lisas blaming a combination of local and international challenges which it said had led to severe financial distress since the second half of 2015.
It also blamed proposed increases in natural gas prices by the NGC and higher electricity prices as two reasons was forced to pack up.
ArcelorMittal said then: “Proposed major increases in the price of gas and electricity at a time of falling commodity prices have rendered production costs uncompetitive. Additionally, proposed increases to port rental fees, announced property taxes and business levies have further contributed to the unsustainability of the business.”
With more than a billion dollars owed to creditors and workers, the company was put into receivership and Christopher Kelshall was appointed receiver.
Kelshall admitted he has had to extend the “black-out period” as Nu-Iron has not been able to reach an agreement with NEC for use of the port, or a gas contract with the NGC.
“From the documentation I have received from both the National Energy and the NGC, I am convinced that they are doing a thorough job. It is a fact that use of the port is a condition precedent.
“I have been asked to provide information to the entities and I am satisfied they are treating it seriously and meticulous in their due diligence and all with an interest to making sure they run the rule over the preferred bidder. From what I can see, it is being done in a very professional way,” he said.
Kelshall said other companies had expressed interest in the plant but the selection process was “transparent and meticulous” and his selection was the best one for the creditors.
He added that it had come to his attention that a US-based company, Macarri, with support from the Steel Workers Union of T&T (SWUTT), was being promoted. However, last year when he was open for business “they were no where in the dance” and cannot be considered at this stage.
Should the preferred bidder, Nu-Iron, fail to get the required regulatory approvals, he will seek an alternative, he said.
Nu-Iron Unlimited is a wholly owned subsidiary of Nucor Corporation based in Charlotte, North Carolina. The company produces direct reduced iron (DRI) which is melted and processed into steel.
Nu-Iron Unlimited is the largest shipper of cold DRI in the world.
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