As Essar Global bigwigs noted to SooToday last night during their visit to Premier Kathleen Wynne's barbecue at Bellevue Park, their affiliate Ontario Steel Investments Limited is officially in the running to purchase U.S. Steel Canada and bring it out of Companies Creditors Act Protection.
As has also been expected, Waseem Iqbal, Essar Global's deputy general manager, tells us a bid for Essar Steel Algoma is in the works.
Here is Ontario Steel Investments Limited's news release, issued this morning:
HAMILTON — Ontario Steel Investments Limited ("Ontario Steelworks"), announced today that it has submitted a formal binding offer (the "Offer") for the purchase of U.S. Steel Canada ("Stelco"). The Offer includes the assumption of Stelco's pension plan in totality and a commitment to provide substantial post-employment benefits ("OPEBs") to Stelco's active and retired employees.
Specifically, the Offer includes the assumption at closing of C$954,000,000 of employer liabilities under Stelco's defined benefit registered pension plans and a commitment to contribute C$25,000,000 per year toward OPEBs for both active and retired employees. The total proposed purchase price was not disclosed.
Ontario Steelworks provided the following comment with respect to the offer:
"We are very excited to put this bid forward for Stelco; it is another important step in advancing our vision of creating a true Canadian steel champion. Our Offer is the culmination of 18 months of discussions with all of the key stakeholders to find the best outcome for the business. It will provide maximum benefit to all involved, most importantly Stelco's active and retired employees who depend on their pensions and post-employment benefits, as well as a more secure day-to-day operating environment."
"Through its affiliation with Essar Global, Ontario Steelworks brings over 25 years of global experience in steel manufacturing as well as a best in class operating team, leading edge technology and deep financial capabilities. With this, we believe we are uniquely positioned to bring Stelco out of the CCAA restructuring process and create a foundation for a strong, competitive and sustainable steel business in Hamilton and Lake Erie."
"Ontario Steelworks remains in active discussions with the United Steelworkers Union regarding its Offer for Stelco, and we look forward to continuing discussions with the Province of Ontario to ensure the long term interests of the community and the environment are protected."
On July 12, 2016, Ontario Steelworks announced that it had signed a letter of intent with the United Steelworkers Union, Local 2251, to negotiate the framework of an acquisition of Essar Steel Algoma Inc. ("Algoma") by Ontario Steel.
The Stelco Offer was submitted to the court-appointed monitor and the company's other advisors on August 5, 2016. Ontario Steelworks will provide further comment and updates on its interest in the Stelco and Algoma processes as events warrant.
Launch of Ontario Steelworks Website
Ontario Steelworks also announced that it has launched a new website (www.workingforontariosteel.ca) that will serve as a home for all information relating to its interest in the Ontario steel industry as well as its specific initiatives in the community.
About Ontario Steel Investments Limited
Ontario Steel Investments Limited is a consortium of steel industry specialists, including the shareholders of Essar Global. It was established as an investment vehicle for the Ontario steel industry.