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U.S. Steel Canada, now Stelco, signs agreement with Bedrock Industries
New York, Dec. 9 – U.S. Steel Canada, Inc., now known as Stelco, said that it has signed a plan support agreement with Bedrock Industries Group LLC that is intended to set the framework for a restructuring of the company.
Stelco will seek approval from the Ontario Superior Court of Justice to finalize the terms of the transaction via a plan of arrangement under the Companies Creditors Arrangement Act.
The province of Ontario, United States Steel Corp. and United Steelworkers Local 8782 and 8782(B) have previously reached their own agreements with Bedrock, according to a news release.
On Nov. 1, United States Steel said it agreed terms with Bedrock regarding the sale and transition of ownership of U.S. Steel Canada to Bedrock.
As part of U.S. Steel Canada’s CCAA case, U.S. Steel said it submitted C$2.2 billion of secured and unsecured claims.
If the Bedrock transaction is approved by the Ontario Superior Court of Justice and ultimately closes, U.S. Steel will receive roughly $126 million in satisfaction of its secured claims, including interest, and unsecured claims.
The proposed terms also include an agreement to provide mutual releases among key stakeholders, including a release of all claims against U.S. Steel related to environmental, pension and other liabilities.
As part of the proposed transition in ownership, U.S. Steel will continue to provide some shared services to U.S. Steel Canada and will enter into an agreement to supply U.S. Steel Canada with all of its iron ore pellets requirements through 2021.
Hamilton, Ont.-based U.S. Steel Canada’s operations are located at Lake Erie Works, a fully integrated steelmaking facility, and at Hamilton Works, a cokemaking and finishing facility.
U.S. Steel Canada filed for CCAA protection in September 2014. Its stay period was recently extended to March 31.
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