Chevy, nice piece on Aussie titanium. Saw this in the local paper, had to get it from the Halifax paper. Looking for your comments our choice for candidate is not even mentioned. Any possible explanations?
herald.ns.ca.
Sysco books 'an absolute disaster'
By The Canadian Press and Eva Hoare /
Staff Reporter
One of the leading potential buyers of Nova Scotia's troubled Sydney Steel mill is
ready to drop out of the bidding.
Reserve, a consortium based in Akron, Ohio, cancelled this week's planned visit
of the Sydney mill after a preliminary look at Sysco's books last week.
"The numbers sent up were an absolute disaster," said a Reserve official, who
asked not to be identified.
"Even with the massive workforce reductions, the place is nowhere near
break-even."
An official at Sydney's Delta hotel confirmed the company has cancelled four
reservations that had been made for its employees for this week.
Reserve, which already runs 12 steel mills, was to be the first potential buyer to
visit the plant, which the Tories say they will shut down - throwing up to 700
people out of work - if it isn't sold by Dec. 31.
Specialists in turning around failing plants, Reserve officials have been alarmed at
the slide in Sysco's order book over the last six months.
It's not clear whether the reduction is related to the Tories' deadline to sell the
plant, which has swallowed $3 billion in taxpayer dollars.
Reserve is expected to notify ABN Amro - the Dutch investment bank that's
trying to sell the plant - about its withdrawal over the next few days.
ABN Amro officials could not be reached for comment.
Word of Reserve's pending withdrawal came as a surprise and disappointment to
Economic Development Minister Gordon Balser.
Sysco "has a 30-year history of difficulties," he said. "We're hoping any company
that's going through the process with ABN Amro would be looking at how they
can turn (Sysco) around. We're hoping the company can see the light and make it
work."
Mr. Balser said he believes other bidders are out there, but described the latest
blow in Sysco's checkered life as "discouraging."
The minister said he was aware a company was expected to view the plant this
week, but ABN Amro didn't tell the government the name.
In September, Mr. Balser indicated there were eight potential suitors. Sources
say the list has been whittled to four, with two - Reserve among them -
considered ideal candidates.
There is speculation the second front-runner is a firm from Argentina.
But a representative of a Russian company says his firm might be the only game in
town for the money-losing plant.
And Greg Kanevsky doesn't understand why he can't deal directly with the
government.
"Maybe if ABN Amro finds some interested parties, fine, good luck," said Mr.
Kanevsky, president of Interpek, the Canadian subsidiary of Russian-based
steelmaker Stavan-Transmet.
"I don't hear of any other parties. If it is so, I'm puzzled why nobody talks to us,"
he said in an interview Sunday from Montreal.
"The clock is ticking."
Stavan-Transmet has offered to buy Sysco for roughly $30 million, but doesn't
want to go through another "expensive" round of brokering with ABN Amro.
Mr. Kanevsky said his company has already provided government officials with
everything they need to proceed with a sale, and is now waiting to see what the
Tories will do.
"The offer is there but it's in sort of a vague form. Nobody talks to us. (It's) on the
back burner. We're not in the active pursuit . . . of Sysco since we were treated
in such a way."
Mr. Kanevsky said his firm is finished working with ABN Amro, having dealt
with them last January.
"We're hoping to talk to someone before they close it down. It would be
extremely unfair to us and to the people of Nova Scotia if they would close the
plant without exploring (the possibilities)," Mr. Kanevsky said.
"We would not only keep the existing workforce but we would certainly try to
expand it."
Stavan-Transmet is the second company to complain about the way ABN Amro
is handling potential buyers.
In early October, Roger Langille of Vancouver-based Nicklan Resources
Canada Ltd., said ABN Amro denied his company access to Sysco's books,
which it needed to assess in order to make a proper bid.
Former economic development minister Manning MacDonald said it would be a
shame if this or any other deal falls through.
"This community can't take a hit with the closure with Sysco," Mr. MacDonald
said Sunday.
He said he can't comment on how ABN Amro is working out because he's no
longer privy to such information, but hopes the investment bank finds the right
buyer before Dec. 31.
Rail sales opportunities are huge in eastern Europe right now, said Mr.
MacDonald, adding that Stavan-Transmet wants to capitalize on that
"burgeoning" market.
The company, which has a contract to upgrade the rail corridor between
Moscow and Berlin, could need as much as 100,000 tonnes of rail annually for
the next decade or so.
He also said the company had checked out when his government conducted talks
with Stavan-Transmet in 1997.
The former minister's only concern with Stavan-Transmet was its interest in
producing a single product, but he's since learned officials are exploring
diversification and partnering with other companies.
Mr. MacDonald would like to see current operator Hoogovens take an equity
position in whatever deal is struck.
"I would hope that that consortium would take an interest in the plant, with a
percentage, and then would perhaps contact Stavan-Transmet. That would be . .
. Utopia for me."
Meanwhile, Mr. Balser wants Stavan-Transmet to "remain committed" to the
sales process.
"I would encourage them to . . . try and work within the system," he said Sunday.
Mr. Balser said he "can understand the frustration" felt by Mr. Kanevsky, but
believes ABN Amro knows what it's doing.
He admitted time is running out and some "hard decisions" will have to be made if
the plant isn't sold by the year-end deadline.
"Obviously that date looms very large on the horizon. (We're) hopeful the
companies will come forward"
Winzer |
