Rennert is competing for the right to buy the Warren steel mill out of bankruptcy.
By CYNTHIA VINARSKY
VINDICATOR BUSINESS WRITER
WARREN -- The multimillionaire owner of WCI Steel is selling his most valuable asset, but an attorney for the Warren steelmaker said he's confident the deal won't hurt WCI's effort to emerge from bankruptcy protection.
The Associated Press reported Tuesday that a holding company owned by New York financier Ronald Perelman will take over AM General, the South Bend, Ind.-based maker of the military humvee vehicle and its popular civilian counterpart, the Hummer.
Renco Group of New York, the holding company of WCI owner Ira Rennert, has owned AM General since 1992. The formation and capitalization of the new venture was announced jointly by Renco and Perelman's company, MacAndrews & amp; Forbes Holdings.
Renco contributed all of its ownership of AM General to the new venture, the AP reported, and MacAndrews contributed cash. Exact terms of the deal were not disclosed.
The New York Daily News reported Perelman was offering to pay $900 million for AM General.
Atty. G. Christopher Meyer, part of the legal team representing WCI Steel of Warren in its Chapter 11 bankruptcy case, said the sale should not affect the steelmaker as it works to emerge from bankruptcy protection.
Rennert is competing against a group of WCI bondholders for the right to buy the Warren steel mill out of bankruptcy and to continue operating it. The New York owner has promised to transfuse $50 million into the mill coffers and to assume financial responsibility for WCI's pension plan if Judge Marilyn Shea-Stonum chooses its plan.
The bondholders would also invest $50 million if they win the judge's approval.
"I don't believe this will have any effect on WCI," Meyer said. "Mr. Rennert may be marginally more liquid because of the sale, but I don't think liquidity was ever a question. What was an asset of one variety is an asset of another variety."
AM General employs 2,500 at plants in Mishawaka, Ind.; Livonia, Mich.; and Franklin, Ohio, according to Renco's Web site.
"From my point of view, Mr. Rennert is still just as able to fulfill his commitments as he always has been, and in fact, even more so because now he has this cash," Meyer added.
He said attorneys representing WCI and those representing the competing bondholders are preparing for confirmation hearings, set to resume Aug. 30 in United States Bankruptcy Court, Akron.
Judge Shea-Stonum is expected to approve one of the plans for WCI based on information she gathers at the hearings, which may last through that week.
Perelman's company, MacAndrews & amp; Forbes Holdings, will be the managing partner of AM General under the new ownership deal, the AP reported, but other plant management will remain in place. Perelman, also owner of Revlon, made Forbes magazine's list of the world's richest people this year, with an estimated worth of $3.8 billion.
AM General's humvee first saw action in the 1991 Gulf War and gained a following among civilian consumers after Arnold Schwarzenegger persuaded the company to offer a consumer version of the oversized all-terrain vehicle, now known as the Hummer, in 1992. AM General builds Hummer models for General Motors.