Stelco, formerly U. S. Steel Canada Inc, said its salaried employees, retirees and affiliated groups have agreed to support the company’s restructuring plan with Bedrock Industries Group. The steel producer, which has been operating under creditor protection since 2014, entered into a restructuring deal with Bedrock in late 2016, shortly after United States Steel Corp (NYSE: X) agreed to transfer ownership to the U.S. private equity firm. The agreement remains subject to court approval. Bedrock previously said it will continue operating Stelco’s plants in Hamilton and Nanticoke, Ontario.
Stelco (U. S. Steel Canada) and Bedrock Industries Group LLC Reach Agreement in Principle with Stelco Salaried and Other Non-USW Group, Who Now Support Stelco’s Restructuring Plan
HAMILTON, ON, April 19, 2017 /CNW/ – Stelco, the name under which U. S. Steel Canada Inc. carries on business (“Stelco” or the “Company”), announces that it and Bedrock Industries Group LLC (Bedrock) have reached an agreement in principle (the “Agreement”) with the Stelco salaried employees and retirees and certain others represented by court-appointed representatives and counsel (the”Stelco Salaried and Other Non-USW Group”) regarding their support for Stelco’s plan of arrangement, compromise and reorganization (the “Plan”), including the treatment of their Other Post-Employment Benefits (“OPEB”), unfunded supplemental pensions claims, termination and severance claims, and future pension service. Pursuant to the Agreement, which is subject to approval by the Ontario Superior Court of Justice (the “Court”), the Stelco Salaried and Other Non-USW Group has agreed to vote in favour of the Plan.
“I thank everyone who played a constructive role in reaching this agreement,” said Bill Aziz, Chief Restructuring Officer, Stelco. “Momentum continues to build towards this great company having an opportunity to re-emerge as a strong, independent Canadian steel producer. We are getting closer to the best – and only – outcome that balances the realities of the situation with the interests of the many stakeholders.”
A communication to the members of the Stelco Salaried and Other Non-USW Group, with further details of the Agreement, is being prepared and is expected to be sent shortly. Stelco Salaried and Other Non-USW Group members who have any related questions should contact their Representative Counsel, Koskie Minsky LLP, via phone at 1-866-777-6341 or via email at email@example.com. A formal Settlement Agreement and related Court materials are also being prepared and will be filed with the Court in due course.
The purpose of the Plan is to restructure Stelco’s liabilities and to facilitate a restructuring transaction between the Company, Bedrock and other key stakeholders that would result in the Company becoming a strong, and competitive participant in the North American steel industry. On March 15, 2017, the Court approved a Meeting Order that authorized meetings of affected creditors to be held on April 27, 2017 to vote on the Plan. As a result of the Agreement, Stelco is now well positioned to obtain approval of its Plan by the affected creditors at the meetings. Stelco has been operating under Companies’ Creditors Arrangement Act (“CCAA”) protection since being granted an initial stay of proceedings in September of 2014.
Ernst & Young Inc., as the Court-appointed Monitor, continues to oversee the business and financial affairs of the company during the CCAA process. Current Court filings, including the Plan of Compromise, Arrangement and Reorganization, Information Circular and information regarding a Supplementary Claims Process and other information relevant to the restructuring process is available on its website at www.ey.com/ca/USSC.
Stelco will continue to provide updates as developments warrant.
Powered by Canadian craftsmanship, Stelco’s operations in Hamilton and Nanticoke reflect the strength of each community. Together employing more than 2,200 people, these full integrated, industry-leading facilities are among the most safe, environmentally progressive, and productive steel plants in the world. Hamilton Works is located on the shore of Lake Ontario in Hamilton, Ontario. Lake Erie Works is about an hour’s drive south, and is located in Nanticoke, Ontario, on the shores of Lake Erie. Stelco produces high-quality steel that is used primarily in the North American automotive, construction, infrastructure, appliance, manufacturing and pipe and tube industries.
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Photo courtesy of Reuters/Nigel Roddis