Bedrock-owned Stelco seeks $200 mln from IPO: Reuters

Canadian steelmaker Stelco Holdings Inc expects its initial public offering to be priced between $16 to $18 per share, raising about $200 million (US$158 million) at the mid-point.

The company, owned by U.S. private equity firm Bedrock Industries, plans to offer between 11.11 million and 12.50 million of common shares.

Stelco, which is emerging from its second bankruptcy in 13 years, will list on the Toronto Stock Exchange under the symbol “STLC”.

Stelco operates two steel-processing facilities in Ontario and is targeting the auto sector for growth with plans to increase production of lightweight, higher-strength steels that automakers are increasingly seeking for better fuel economy, according to the company’s IPO filings.

Goldman Sachs Canada Inc, BMO Nesbitt Burns Inc, Credit Suisse Securities (Canada) Inc, J.P. Morgan Securities Canada Inc, Scotia Capital Inc, TD Securities Inc, National Bank Financial Inc and Oppenheimer & Co Inc are the underwriters to the offering.

Update: Stelco could raise as much as $230 million if the IPO’s greenshoe option is fully exercised, according to the preliminary prospectus.

With the offering’s close, Bedrock Industries will hold 86.5 percent of Stelco’s outstanding shares, not including the greenshoe option.

A source previously told Reuters the company was seeking about $185 million (US$150 million) from a share sale, possibly giving Stelco a market value of about $1.2 billion (US$1 billion).

Reporting by Taenaz Shakir in Bengaluru; Editing by Sriraj Kalluvila

(This story has been edited by Kirk Falconer, editor of PE Hub Canada)

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