After helping to rehabilitate the beleaguered U.S. steel industry in just two and a half years -- and making $2 billion in the process -- what is veteran financier Wilbur Ross doing for an encore? The 67-year-old Rothschild-bankruptcy-adviser-turned-leveraged-buyout-maven tells Institutional Investor he will try to repeat his steel trick with coal, textiles and other raw materials, betting squarely on the new realities of global commerce.
“I believe in commodities,” says Ross, noting that demand will remain strong in fast-growing, export-driven economies like China, India and South Korea thanks to free trade and rising standards of living.
Ross has a proven eye for value. In October his $2 billion-in-assets private equity firm, WL Ross & Co., agreed to sell International Steel Group, which it had cobbled together from bankrupt LTV Corp. and Bethlehem Steel, to Rotterdam-based Mittal Steel. Mittal paid $42 a share for ISG stock that cost Ross $3.
He has similar plans for International Coal Group, formed from three companies, including bankrupt Horizon Natural Resources, which Ross bought in October for $786 million, and for his International Textile Group, an amalgam of Burlington Industries and Cone Mills Corp., both bankrupt. Ross says that rising oil and natural-gas prices will push power plants to shift to cheaper coal and that new technologies will reduce the environmental damage from burning coal. In textiles he’ll rely on new coatings and manufacturing techniques as well as cost-cutting and expansion into China and Turkey.
In the meantime, Ross retains a board seat and a $2.2 billion, 8 percent stake in Mittal, which he says may soon try to buy a Chinese steel producer. And he promises to spend more quality time with new wife (his third) Hilary Geary, a socialite whom he married in October during the Mittal negotiations. “That was the most important closing of all,” he says. “I owe her a honeymoon.”
