BIRMINGHAM, Ala. — Birmingham Steel Corp. has filed for Chapter 11 bankruptcy protection as part of an agreement reached last week with its buyer, Nucor Corp.
Nucor officials announced plans Friday to buy the struggling steel company for $615 million cash. Under the terms of the deal, the money from the sale would go to pay off Birmingham Steel's secured debts to lenders.
Those lenders would pay a portion of the proceeds to unsecured creditors and about $15 million to stockholders at a rate of about 47 cents a share, according to a statement Monday from Birmingham Steel. The bankruptcy filing was in Delaware.
Nucor would take possession of Birmingham's four operating mills in Alabama, Illinois, Washington and Mississippi, with a total annual capacity of about 2 million tons.
Nucor said it also will acquire Birmingham's headquarters in Alabama and an idle mill in Tennessee along with the assets of Port Everglades Steel Corp. and the Klean Steel Division.
Birmingham Steel employs about 1,300 people at four U.S. plants, including one in Birmingham with 285 workers. It produces about 2.5 million tons a year of steel rebar for use in commercial construction.
CEO and chairman John D. Correnti said the company is committed to preserving its work force through the closing of the sale, and that workers' wages and benefits would be paid throughout the bankruptcy proceedings.