U.S. Steel Canada Inc on Wednesday rejected a buyout offer from Ontario Steel Investments, a group that includes shareholders of Essar Global, saying it was not considering further proposals by Essar, which had been eliminated from the sale process.
The offer, made on Tuesday, includes the assumption of $954 million (US$734 million) in liabilities under U.S. Steel Canada’s pension plan and a commitment to provide $25 million toward post-employment benefits for U.S. Steel Canada’s staff.
U.S. Steel Canada, which has been in creditor protection since 2014, said Essar was rejected as a potential buyer of the business earlier this year following discussions with stakeholders including the Ontario government.
It cited a failure by Essar, the Indian energy and resources conglomerate, to provide evidence of its financial ability to own and operate the company and an inability to gain the support of all stakeholders, including the provincial government.
Essar this week attempted to re-enter the bidding process for U.S. Steel Canada’s operations in Hamilton and Nanticoke, Ontario, through the Ontario Steel investment vehicle, and has the support of the United Steelworkers (USW) union.
Gary Howe, president of USW Local 1005 in Hamilton, criticized U.S. Steel Canada for rejecting the latest offer.
“It’s ridiculous, especially when U.S. Steel Canada (took) just a day to think about it. This is going to cause people in Hamilton to be extremely upset and it’s irresponsible,” he said in an interview.
U.S. Steel Canada, which employs nearly 2,000 workers in Ontario and has the capability to produce 2.6 million tons of steel annually, is a former unit of United States Steel Corp (X.N).
(Reporting by Matt Scuffham; Editing by Jeffrey Benkoe)
Photo courtesy of Reuters/Nigel Roddis