Bethlehem Steel Files for Chapter 11
Oct 15 9:19am ET
NEW YORK (Reuters) - Bethlehem Steel Corp. , the No. 3 U.S. steel producer, on Monday filed for court protection from its creditors amid one of the worst markets for steel producers in years.
The company, which is based in Bethlehem, Pennsylvania, listed $4.2 billion of assets and $4.5 billion of debt in its Chapter 11 filing with the U.S. Bankruptcy Court in the Southern District of New York.
The steel industry has been suffering for three years from sluggish demand in the down economy, depressed prices and a glut of supply. Domestic producers have blamed foreign companies with dumping steel on the U.S. market, forcing prices down.
Most recently, demand has been hurt by a sharp cutback in auto production, one of the two largest buyers of steel. The slowdown in construction, the other major customer to steel companies, has been another blow to the industry.
Analysts predict that more steel companies will be forced to file for bankruptcy in the worsening economic climate.
Bethlehem Steel is awaiting appointment of a judge to its case and hopes to proceed with filing further documents at hearings on Monday afternoon to get its financing approved, said Jeffrey Tanenbaum, an attorney for the company.
A merger partner or buyer is "a possibility," Tanenbaum said. "That's down the road, though," he added.
Bethlehem Steel's two largest shareholders are Greenway Partners, with a 6.2 percent stake, and Dimensional Fund Advisors, with 5.3 percent.
In its filing, Bethlehem Steel said it thought the bankruptcy route was in the best interests of the company.
Shares of Bethlehem Steel closed in Friday New York Stock Exchange trade at $1.20, the low end of a 52-week range of $1.01 to $4.30. |
