Creditors to vote on Stelco plan next Monday

Creditors to vote on Stelco plan next Monday

Stelco Inc's insolvency court protection has been extended until December 12, but creditors may decide the steelmaker's fate as soon as this Friday. If creditors vote to reject Stelco's restructuring plan at the scheduled meeting this Friday, Stelco could be pushed into receivership, as has been suggested by the lenders. The other possible outcome, suggested by the United Steelworkers union, is for the company's Hamilton and Nanticoke, Ontario operations to be sold with business continuing to operate. If the creditors choose to approve Stelco's plan, the company can emerge from court protection with new financing from the Ontario government and Tricap Management Ltd. Stelco would receive $375 million in financing from Tricap and a $150-million loan from the government. The vote from Stelco's bondholders, who are owed close to $328 million by the company, has been repeatedly postponed because the creditors have threatened to vote the plan down. This Tuesday, Ontario Superior Court Justice James Farley chose to adjourn until next Monday the United Steelworkers' motion to have Stelco sold so that the creditor vote can come first. "I am directing and ordering that there be no jiggery-pokery," Justice Farley said Tuesday of the creditor vote. "This is far too important for all the stakeholders."