Stelco Holdings Inc. announced today that Stelco Inc. has completed inventory monetization arrangement previously disclosed in its supplemented prep prospectus dated November 2, 2017.
Under the terms of the arrangement, Stelco has agreed to transfer certain of its raw material inventory, including coal and iron ore, to a third party in consideration for net proceeds of approximately US$100 million. Stelco is also required to post a cash collateral margin to its counterparty and has agreed to purchase the raw materials inventory from the counterparty, at an agreed upon pricing formula, as needed for its steel manufacturing processes and upon expiry of the term of the arrangement.
It is anticipated that the proceeds of the inventory monetization arrangement will be used to repay the outstanding advances drawn under Stelco's asset-based credit facility and for general working capital purposes.