Ontario gives support to Brascan plan in Stelco saga

Ontario gives support to Brascan plan in Stelco saga

The Canadian province of Ontario has offered its support for Brascan Corporation’s Tricap Management Ltd. in the 18-month Stelco restructuring ordeal. The move is sure to find instant favor with the United Steelworkers of America who has backed Brascan’s CA$1.35 billion recapitalization offer that would immediately repay CA$500 million towards Stelco’s CA$1.3 billion pension fund shortfall followed by 10 annual payments of $80 million. The government has been quick to point out that this is not an exclusive show of support for Brascan, only that it adequately addresses the pension fund problem. In a letter, written at the union’s request, the province told Brascan, “At present, the plan you have proposed is the only one of which we are aware which has the potential to address the province's concerns, and we will work with you to pursue stakeholder consensus.” The letter went on to state, however, that it is open to other alternative plans that might better address the long term viability and health of Stelco as well as the pension plan deficit. Stelco went on to reiterate its position that the Brascan plan is something it cannot and will not support adding that it is continuing to work on a plan that is acceptable to all its stakeholders. The Toronto steelmaker has been mired in a restructuring saga that has seen little to no progress in its 18 months. Attempts at mediation recently broke down when retired Ontario Judge George Adams quit the proceedings.