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Stelco agreements with steelworkers, Tricap approved; stay period extended to Dec. 5
By Caroline Salls
Pittsburgh, Oct. 4 - Stelco Inc. obtained approval from the Ontario Superior Court of Justice for its agreements with the province of Ontario, Tricap Management Ltd. and the United Steelworkers, according to a company news release.
In addition, Stelco's stay period was extended to Dec. 5 from Tuesday in order to accommodate a Nov. 15 creditors' meeting and a sanction hearing.
The creditors will meet to consider and vote on a restructuring plan.
On Sept. 26, Stelco said it reached agreement with the United Steelworkers on its proposed plan of restructuring and Tricap Management Ltd. on two financing facilities.
Stelco entered into a memorandum of agreement with steelworker locals 8782 (Lake Erie) and 5220 (AltaSteel in Edmonton). Ratification will put in place collective agreements at the two facilities.
A previously planned agreement with the steelworkers on corporate issues has been dropped.
The financing facilities with Tricap are a $350 million bridge facility in the form of a secured revolving term loan and a standby agreement to backstop a $75 million rights offering of new secured convertible notes to be issued by Stelco.
Tricap will also receive an option to buy $25 million of the convertibles, which it will exercise under certain conditions.
On Sept. 20, Stelco announced that it had filed a restructuring plan that provides C$630 million in net liquidity and gives unsecured creditors all the new equity in the restructured company.
Stelco also filed a restructuring agreement with the Province of Ontario that includes an arrangement for funding the company's pension plans.
Stelco, a Hamilton, Ont.-based steel company, filed for bankruptcy under the Companies Creditors' Arrangement Act on Jan. 29, 2004.
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