BAY ST. LOUIS, Miss. (AP) — The owner of a steel pipe mill in Bay St. Louis has filed for bankruptcy protection and seeks to sell the plant.
PSL North America LLC, which began operations in 2008, made the Chapter 11 filing June 16 in Delaware. In court papers, it said it plans to sell itself for $100 million to another pipe maker, Jindal SAW Ltd. The company wants to have a bankruptcy auction in August, and with court approval, Jindal or a higher bidder could own the company by the end of August.
Indian pipe maker PSL Ltd. owns 83 percent of PSL North America, while two other companies own the remaining 17 percent. The Indian parent had to restructure $900 million in debt in 2013, and couldn't bail out its American unit.
The mill said in court papers that it plans under new ownership to move into making concrete-lined water pipe, a business it says is less competitive and more profitable than making oil and gas pipes. PSL North America said it will cost $7 million to modify its factory in the Port Bienville Industrial Park to make the water pipe by the end of the year, and hopes to deliver a trial order in 2015. PSL North America will pay for some of that work with a post-bankruptcy loan which is also financing ongoing company operations.
With about 70 employees, PSL North America cites $130 million in debt and said it can't borrow the money it needs to buy steel to make pipe. The company also said it has struggled to make payments on $77.6 million of bonds issued on its behalf by the Mississippi Business Finance Corp., a public agency that issues low-interest bonds to aid various projects. PSL North America said Indian bank ICICI, which guaranteed the bond repayments, has been covering missed debt payments.
PSL North America said it lost $30 million after much of the steel it bought to build pipe for the Florida Gas Transmission natural gas pipeline couldn't withstand required pressures. PSL North America is suing an Austrian company which procured the defective steel.
The company also said it was hurt by a poor economy, seeing sales decline in each of the last four years and losing money.