End of Stelco bankruptcy finally in sight

End of Stelco bankruptcy finally in sight

An agreement has long last been reached in the Stelco reorganization saga which is dragging on into its 23rd month. All four groups – Stelco's bondholders, the Province of Ontario, Tricap Management Ltd., and the United Steelworkers – have agreed to the economic terms laid out in the latest restructuring offer. Stelco released primary details on the plan which include: * The availability of a CA$600 (Canadian) million asset-based revolving loan facility. * The availability of a CA$375 million revolving bridge facility being negotiated with Tricap Management Ltd. * A CA$150 million unsecured subordinated 1% note, issued to the Province of Ontario in exchange for a CA$150 million cash contribution. If the pension solvency deficiency is fully funded by year 10, then 75 percent of the Note would be forgiven at maturity, with the balance payable in cash or shares. * Warrants, with a seven-year maturity, issued to the Province of Ontario to purchase up to approximately 8 percent of the fully diluted equity. Courtney Pratt, Stelco president and CEO, said, "Achieving consensus among these stakeholder groups is a positive step toward allowing Stelco to emerge as a viable and competitive steel producer for the long term. This proposal will now be presented to, and fully considered by, Stelco's board of directors, based on, among other things, the interests of the corporation and fairness to the corporation's stakeholders. I want to thank everyone concerned for the effort and dedication that have brought us to this stage." The next stage will be for Stelco's board of directors to meet to amend the previous reorganization plan to include any changes in the new plan. They are expected to take up that matter a release a revised plan in early December.