"Under the right circumstances, we remain interested in Rouge," U.S. Steel spokesman John Armstrong said Friday, a day after the Pittsburgh-based company filed its objections to Rouge's plan to sell its assets to Severstal as part of its bankruptcy.
In a filing with the U.S. Bankruptcy Court in Wilmington, Delaware, U.S. Steel said it is concerned about its joint venture with Rouge and had made its own offer to buy Rouge's assets.
Other companies -- as well as the city of Dearborn, Michigan, which says Rouge owes it $6.6 million -- have filed objections, claiming that Rouge's plan does not take into account money they are owed, court documents show.
A hearing in the case scheduled for Monday has been postponed until Nov. 24 because the parties were not ready, Rouge spokesman William Hornberger said. Judge Mary Walrath is expected to establish ground rules for the sale at the hearing, he said.
Rouge has filed a motion for Severstal to be the "stalking horse," meaning it would bid first.
But U.S. Steel asked the court not to make Severstal the stalking horse. It says the letter of intent between the Russian company and Rouge is too vague and that Rouge did not disclose it had received a purchase offer from U.S. Steel.
U.S. Steel said it told Rouge on Oct. 20 that it wanted to buy the company and provided an outline of its terms. Two days later, Rouge filed for bankruptcy and said it had received a purchase offer from Severstal.
But Armstrong said the company's biggest objection concerned the Double Eagle Steel Coating Co., a joint venture of U.S. Steel and Rouge. U.S. Steel said it would not consent to a partnership with Severstal, so Rouge's half of the joint venture should not be included in any sale to the Russian company.
Hornberger would not comment on the U.S. Steel objections.
The U.S. Trustee's Office, a division of the Justice Department, also objected to Rouge's plan, saying there is no definitive sale agreement between Rouge and Severstal. Without the agreement, the government says, Severstal could walk away for any reason.
Severstal has not disclosed the terms of its offer for Rouge.
Whatever deal is accepted by the court, the sale would still have to be approved by the United Auto Workers union, which represents about 1,900 of the 2,600 steelworkers and managers at Rouge.
The union has said it favors a sale to Severstal because it is likely to keep Rouge working.
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