Essar Steel Algoma Inc [ESSRGE.UL] said U.S. private equity firm KPS Capital Partners had backed out of a consortium that made a bid for the Canadian steel maker, but that certain term lenders were still pursuing a bid.
Essar Steel Algoma, bought nearly a decade ago by Indian energy and resources conglomerate Essar Global, had put itself up for sale while operating under creditor protection.
“The term lenders have indicated that they remain committed to a going-concern outcome for Algoma and all of its stakeholders, and to closing the transaction contemplated by the asset purchase agreement as soon as possible,” Algoma said in a statement.
A group that includes shareholders of Essar Global signed a letter of intent with a local unit of the United Steelworkers Union on Tuesday to negotiate a deal to buy Algoma for about US$900 million.
Essar Global said last month that it was opposed to the sale of Sault Ste. Marie, Ontario-based Algoma to KPS Capital.
(Reporting by Manish Parashar in Bengaluru; Editing by Maju Samuel)
(This story has been edited by Kirk Falconer, editor of PE Hub Canada)
Photo courtesy of Essar Steel Algoma Inc