On Oct. 16, United States Steel Corp. announced it signed a letter of intent to sell transportation subsidiary Transtar Inc., two coke plants and an iron-ore operation to private equity fund Apollo Management L.P. affiliates for $500 million cash.
The parties plan to reach definitive sale agreements by year-end and close the transactions in first-quarter 2003.
U. S. Steel would retain about a 20 percent interest in the new company, which would assume all collective bargaining agreements, certain employee benefit obligations and other liabilities.
The new company also would sign long-term contracts to provide U. S. Steel with domestic iron ore and coke, and transportation services.
U.S. Steel Executive Vice President-Raw Materials Charles Gedeon plans to leave the steelmaker to head the new company. The Apollo affiliates also would employ operating managers and workers from U.S. Steel's Clairton Works, Gary Coke, Minntac and Transtar.
All of Transtar's direct and indirect operating subsidiaries would be included in the proposed sale, except Transtar Logistics L.L.C., which provides transportation-management services to U. S. Steel and third parties.
Transtar owns and operates Birmingham Southern Railroad Co. and its subsidiary Fairfield Southern Co. Inc.; Elgin, Joliet and Eastern Railway Co.; Lake Terminal Railroad Co.; McKeesport Connecting Railroad Co.; Union Railroad Co.; Warrior & Gulf Navigation Co. and its subsidiary Mobile River Terminal Co. Inc.; and Tracks, Traffic and Management Services Inc.
Source: Progressive Railroading Daily News
