US Steel announced Friday details about the Ontario Superior Court of Justice approval of a mutually agreed upon transition plan with US Steel Canada (USSC).
Highlights of this agreement include:
•US Steel will not be generating any sales on behalf of USSC;
•Going forward US Steel will load its production on its US-based mills;
•US Steel shall transition away from providing any technical and engineering services associated with product development or sales with USSC, and US Steel will not support any field quality claims made against USSC;
•US Steel will continue to provide all shared services that USSC relies upon for up to 24 months, with the exception of sales;
•Should USSC enter into a new sale and restructuring process (SARP) in the future, US Steel will not be a bidder.
On Sept. 16, 2014, USSC's board of directors unanimously decided to apply for relief from its creditors pursuant to Canada's Companies' Creditors Arrangement Act. As a result of the 2014 CCAA filing, USSC and its subsidiaries were deconsolidated from U. S. Steel's financial statements on a prospective basis. Despite efforts in the months following the CCAA filing, no negotiated or other settlement was achieved.
Prior to the Sept. 2014 CCAA filing, USSC recorded a loss from operations in each year for five years, with an aggregate operating loss of approximately $2.4 billion, or in excess of $16.00 per diluted share, since December 2009. Additionally, USSC represented approximately $1 billion of US Steel's consolidated Employee Benefits liability as of June 30, 2014.