Cerberus, Renco Group to Boost R.G. Steel’s Capital
The Tribune Chronicle reported that R.G. Steel said affiliates of Cerberus Capital Management and The Renco Group have committed to provide it with significant new capital that substantially improves its liquidity and provides the necessary financial strength.
Earlier this month Maryland Governor Martin O’Malley asked Jeffrey Immelt to reconsider GE’s decision to freeze some of R.G. Steel’s funds, saying the move has contributed to the firm’s decision to lay off workers at its Sparrows Point mill. The report noted R.G.’s steel mill in Warren, OH remained operating during the Sparrows Point furnace shutdown that began December 22.
GE Capital led ten other institutions in financing the stock purchase sale that created the steel company, according to O’Malley’s letter. The arrangement included giving R.G. Steel a revolving line of credit, for which the steel company put up collateral. According to O’Malley’s letter, GE Capital and other lenders had shifted funds needed to support business operations to “reserves” to further secure the loan.
To read the full Tribune Chronicle article, click here.
Previously on abfjournal.com: