Assets of the Iron Range facility are at stake.
Two firms, both already with interests on the Iron Range, have made bids for the holdings of the former Essar Steel Minnesota as a bankruptcy reorganization deadline nears.
An investor group called Chippewa Capital Partners submitted its bid to the bankruptcy court in Delaware for $250 million as part of a proposal to take over and complete the half-built taconite plant in the Nashwauk, Minn. Mesabi Metallics, the former Essar Steel Minnesota, said Chippewa is associated with the group that bought several properties from the bankrupt Magnetation.
Just as Chippewa made its play, the Ohio-based Cliffs Natural Resources — which operates Hibbing Taconite, United Taconite and Northshore Mining and has already bid for the mineral rights associated with the Nashwauk site — has offered $75 million to buy the assets of the former Essar project. That bid has not been filed with the court.
Mesabi Metallics filed a bankruptcy reorganization plan over the summer that calls for SPL Advisors to commit $250 million to the project. The plan also calls for Mesabi to find other investors to put up another $650 million in debt financing. Matthew Stock, who is CEO of SPL Advisors, has since been guiding Mesabi Metallics through the bankruptcy process.
The bankruptcy court has set a deadline for all competing bids to be submitted by April 21. A hearing to review the bids is set for April 26. Essar Steel — which is owned by Essar Global in Mumbai — filed for bankruptcy protection in July after 10 years of financial problems and repeatedly stalled construction at the Nashwauk site.
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