Ontario government rejects Stelco’s restructuring plan

Ontario government rejects Stelco’s restructuring plan

Ontario, Canada’s finance minister has rejected Stelco Inc.’s restructuring plan proposal, refusing its requests for flexibility on pension funding requirements. In a letter to Stelco’s president and CEO Courtney Pratt, Finance Minister Greg Sorbara deemed the restructuring plan unacceptable to the Canadian government. The decision legitimizes the court documents filed last week by the United Steelworkers. The USW says the legally insolvent steelmaker’s proposed plan is “doomed to fail” because it leaves “too much debt and insufficient liquidity to compete successfully.” Stelco’s plan would initially add only $162.6 million Canadian (CA$) into Stelco’s CA$1.3 billion pension deficit and effectively freeze employee pension benefits for ten years. Mr. Sorbara said the province will work with Stelco to develop a more feasible plan.