Steel Mills
US Steel Gets Green Light on USS Canada DIP Loan
Written by Sandy Williams
October 9, 2014
US Steel received approval on Wednesday from the Ontario Superior Court to proceed with its financing plan for US Steel Canada. A $185 million DIP (debtor-in-possession) loan will keep US Steel Canada operations running through December 2015 while parent company US Steel figures out a restructuring plan under the Canadian Companies Creditors Arrangement Act (CCAA). The court also granted US Steel Canada an extension of the stay of proceedings until January 23, 2015.
Hearings scheduled for Monday and Tuesday were adjourned so that lawyers could work out a compromise to satisfy key stakeholders that included the government of Ontario, the United Steel Workers union, and the city of Hamilton.
The plan will include paying monthly pension and benefits of approximately $5.8 million in pensions and $3.6 million, respectively, for employees at US Steel Canada, according to US Steel legal representative Paul Steep. Steep said the plan is “fair and reasonable” and “in the best interest of all before you.”
US Steel reserves the right to amend the funding terms should actions be taken against the company including work stoppages, a condition that Hamilton Works USW Local 1005 President Rolf Gerstenberger says is a “threat” from US Steel. Steep assured workers that, “We will work with the parties so this never has to be triggered.”
Gerstenberger told reporters on Wednesday, “There’s all these things to make the process go their way.” He added, “We’re thinking the worst, in terms of what they’re up to.”
Bill Ferguson, President of USW Local 8782 at Lake Erie Works, said, ““All of the players involved don’t like what they’re seeing. However, the whole idea involved is: How do we get on with business. Let’s get the job done and preserve the business as much as possible.”
Ontario officials said they will not oppose the plan. “Today’s resolution helps to stabilize the company during the restructuring process and continues to protect the interests of employees, pensioners and the province,” said Ontario Finance Minister Charles Sousa in a statement. “The province will continue to work with the parties involved throughout the restructuring to find solutions that are fair and equitable to all those affected.”
Sandy Williams
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