Ormet sells remaining assets for $25.25 million
HANNIBAL – Niagara Worldwide LLC has won the rights to purchase the assets of the idled Ormet Corp. for $25.25 million during a private auction.
Eric J. Spirtas, president of Niagara Worldwide, said his company purchased all assets, including the buildings, property and equipment.
Niagara Worldwide is based in Niagara, Wis., and acquires, markets, manages and sells idle industrial properties and assets. The company acquires properties like Ormet and determines a plan and feasibility of enacting that plan before finding partners and investors.
While he stressed there is still much work to be done to find the right plan for the Ormet property and assets, Spirtas said the key will be getting jobs back in the area.
“It’s too early for speculation, and we’re not magic,” he said. “We’re business people trying to figure out how to convert on good people, good property and a good region.”
Spirtas cited the strong workforce and resources in the Ohio Valley as reasons Ormet was an attractive purchase. He said he has visited the plant several times, and it is no secret as to why the plant was once successful.
“It is a fantastic region, and it has incredible resources, which is why for 60 years they’ve had a plant there,” he said.
Additionally, Spirtas said Ormet has the facilities, terminal assets and manufacturing capabilities to be successful. While there is no guarantee the plant will operate as it once did, Spirtas said his company will work to find the best use for the newly-acquired assets.
“With the great labor base out there, somehow, some way, we want to find something that benefits everyone down the road,” he said.
Earlier this week, court documents filed in U.S. Bankruptcy Court for the District of Delaware by Hannibal Real Estate and Artco included an objection to a prospective sale of Ormet.
The filing followed word of a potential $15.25 million sale to CCP ORMT Acquisition, a “stalking horse” bidder for the property. Such bidders are used to discourage low-ball offers in the sales of troubled companies by setting a minimum price.
Hannibal Real Estate purchased the former rolling mill property from Ormet in 2007, while Artco operates a heavy plate steel service center and a steel fabrication center on the 122-acre site. The real estate firm opposed the sale because of an ownership dispute over six mooring cells located in the Ohio River immediately offshore from its property, as well as two water intakes.
Additional details of the sale to Niagara, including the number of potential bidders during the auction, were unavailable. Spirtas directed questions to the auction group.
However, he said the company must now determine what can be done with the idled plant.
“Just like anything, you look at things and determine the scale of the project,” he said. “We buy idle businesses and buildings and try to redevelop and right the ship. We’re doing our best to find that right next step.”
Ohio Rep. Jack Cera, D-Bellaire, who expressed concern over the reported $15.25 million offer from CCP ORMT Acquisition earlier this week, said he spoke to United Steelworkers representatives about the sale and offered to help in setting up meetings with Niagara officials.
“We’ll see if there’s anything we can do and get to where we can possibly restart,” Cera said. “It’s a long road to go.”
However, Cera was optimistic about the purchase.
“They’re willing to give it a little bit of time and to see what can happen,” he said. “I’ll offer them any help I can give in trying to find somebody (to invest).”
Spirtas said he and other company officials will meet with local officials and workers to formulate a plan. He said as is the case with many new acquisitions, the company will set up offices in Hannibal.
“We are open to listen to people’s insights and input and to give them an opportunity to speak up and offer ideas,” he said.
Although he acknowledged the challenges the project presents, Spirtas is also optimistic about the purchase. He said past experience will be valuable in finding a plan for Ormet.
“There is no quick fix,” he said. “But we have dealt in and around industrial areas and sectors and done the repurpose and fought that battle, and this is not much different.”