The planned private sale of Columbus Steel Castings will not happen, according to a statement filed with a federal bankruptcy court by Ohio foundry’s parent company, Constellation Enterprises. Three of the foundry’s creditors, including U.S. Bancorp, the United Steelworkers of America, and Praxair Inc., previously indicated they had been advised that the intended sale has been cancelled.
Columbus Steel Castings and its parent company Constellation Enterprises, along with three other subsidiaries, declared bankruptcy and sought federal creditor-protection on May 16. Whereas Constellation and the other three companies indicated then they intended to use the bankruptcy process to restructure their debts, the plan for Columbus Steel was to complete a private sale to an unidentified buyer.
At the time of the filing, the still unconfirmed buyer reportedly had indicated its intention in writing. The private sale had been expected to be completed in early June.
Now, Constellation Enterprises has asked the bankruptcy court to schedule an auction for the foundry. It will ask prospective buyers to submit bids by July 11 for an auction that would take place July 14.
Columbus Steel Casting operated for more than a century, supplying castings for freight and passenger railcars, locomotives, and mining and construction equipment, until it ceased production on May 9. It had let go about 800 workers in the previous month.
In its Chapter 11 filing Constellation explained Columbus Steel Castings’ debt problems relate to a 2015 furnace failure, which it stated cost roughly $15 million to repair and disrupted production for six weeks.
Columbus Castings interim CEO Gary Bernhardy stated: “We firmly believe that a successful sale process will allow the company to emerge stronger and healthier, and better positioned once again to provide high quality products and services that our customers and industry expect from us.”