Industry

Industrial/  Manufacturing

Company Type

Metals Manufacturing

Size

$240 Million

Investment Type

Senior Debt

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Overview

Our client is seeking $225 million of senior and subordinated debt (75% Loan to Cost) and $15 million preferred equity to develop a steel mill in Texas

$60 million of equity will be invested by our client


Plant will have manufacturing capacity of 350 Kilotons of construction rebar steel


Highly efficient, electric arc furnace to heat recycled scrap metals using climate friendly green steel production methods with significant reductions in electricity requirements and carbon


The U.S. steel rebar market was estimated at 7,036 kilotons in 2020 and is expected to reach 10,956 kilotons in 2028

Opportunity

 

US is the world’s largest net importer of steel, importing 7,036 kilotons in 2020, despite 25% tariffs on imports


US is also the world’s largest ferrous scrap producer, exporting 16,874 kilotons in 2020 – given the price spread, scrap can very profitably be converted to steel


Global steel rebar market was valued at $215 billion in 2020 and is projected to reach $354 billion in 2028


Bipartisan approval of $1.2 trillion infrastructure bill has created positive catalysts/increased demand among material suppliers (including rebar) for construction of bridges, railways, roads, airports and ports

Solution/Strategy

Plan to develop five steel mills in the US. The first will be in Texas, and produce 350 kilotons of rebar construction steel by consuming 403 kilotons of locally produced scrap


MOU in place for 100% supply of 450 kilotons of steel scrap needed for the plant


100% off-take agreements under negotiation: in conversation with several large US steel trading firms for off-take of its rebar

Learn More About This Transaction

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CONTACT US

Hi. We're not around right now. But you can send us an email and we'll get back to you, asap.

Thanks, Ken

Ken Margolis | Managing Partner Castle Placement, LLC
1460 Broadway Street, Rte 400
New York, New York 10036
(212) 418-1188 | C: (516) 712-7784
kmargolis@castleplacement.com

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