Stelco balks at USWA-Tricap agreement

Stelco balks at USWA-Tricap agreement

In an effort to bring Stelco out of bankruptcy protection, the United Steelworkers of America (USWA) inked a letter of intent with Tricap Management Ltd on Wednesday (April 13) to raise $1.35 billion in capital. Tricap is a subsidiary of the Canadian asset management company Brascan. The USWA-Tricap plan calls for an immediate infusion of $500 million into the company's pension plan. $100 million would then be used to repay existing Stelco secured debt, with the remaining $750 million being earmarked for capital expenditures and general corporate purposes if the entire stakeholders of the company accept the plan. However, Stelco managers are rejected the plan outright. Stelco management reminded that Tricap had missed its chance to salvage the steelmaker by failing to take part in a court-approved capital raising process between October 2004 and February 2005. Stelco announced that it would continue pursuing its court-approved stand-alone process to raise capital.