US bankruptcy court names Severstal leading bidder for assets of American rogue industries

A US bankruptcy court in Detroit has named Severstal the primary contender for the purchase of assets of American company Rouge Industries, according to the Severstal press service.

Explaining the interest of Severstal in the assets of Rouge Industries, Vadim Makhov, who is a member of the board of directors of Severstal, said 'our interest is the logical confirmation of those processes of globalization, which are happening today in the steel industry.' Makhov added that he was hopeful that cooperation with Rouge Industries would give Severstal additional opportunities on the US market.

Makhov declined to make a prognosis about the future development of the situation surrounding Rouge Industries. He said that the decision of the court to make Severstal the leading bidder, absolutely confirms the reliability of Severstal as a contender. 'The decision increases our chances of acquiring the assets. Therefore, we are very pleased with the court's decision,' said Makhov. He confirmed information that Severstal will participate in an auction on December 19. 'We are continuing to negotiate with all interested parties including unions and others, and we will consider their opinions when we make our final decision concerning Rouge Industries,' he said.

Rouge Industries is the fifth largest producer of steel in the US. In 2002 it had total steel production of 2.5 million tones with sales of more than USD 1.1 billion. The company's main clients are automakers Ford, DaimlerChrysler and General Motors.

Based in Russia's Vologda Region, Severstal is Russia's largest producer of steel and metal products, and is the head company in the Severstal Group holding. In 2002 the company had production of 8.5 million tones or a 5.6% increase year-on-year. In 2003 Severstal is expected to produce 8.8 million tones of steel. The company plans to further increase production to 9.2 million tones of steel in 2004.

© &to=http://www.rosbaltnews.com/' target=_blank>RosBalt