US Steel Canada is doing better than expected despite still losing money. According to the 18th Monitor’s report for the CCAA protected company, November’s operation loss was $5.8 million, about half the forecast of $11 million.
Operational loss year to date (as of November 30) was $109.4 million. Net loss for the eleven months was $387.7 million with revenue of $1.18 billion.
USSC spokesperson Trevor Harris said the company was performing ahead of the restructuring plan “by a substantial margin.” “We’ve blown our forecasts right out of the water and we expect to continue to do that,” he added.
Court monitor Alex Morrison said in his report that imports and the slowdown in the OCTG market has impacted steel demand and pricing. Shipments for November were up slightly from October and were 23 percent higher than forecast by the Independent Business Plan. Year to date shipments as of November 30 totaled 1,678,273 tons, down 22 percent from the same period in 2014. Average selling price per ton in November declined to $631, down from the eleven month average of $702 and 2014 average of $763.
US Steel Canada has yet to draw on the Debtor In Possession (DIP) facility. Cash as of December 11, 2015 totaled $134.8 million
Health benefits for 20,000 pensioners at US Steel Canada were cut off in October but retirees will get help from the provincial government to the tune of $3 million in transitional funds as of New Year’s Day. The funds will cover benefits until March 31 or until the money runs out, which many think will be well before that date.
Also on the upcoming agenda is a court date for US Steel to present its argument for payback of $2.2 billion it says it is owed by US Steel Canada. Workers, the province and a former Stelco president argue that the debt is actually an equity investment in the former Stelco mill. If US Steel’s claim is dismissed it will go to the end of the debtor line for bills to be settled. If US Steel prevails in its argument it will leave almost no funds for preserving the underfunded company pension plans.
An attempted sale of the US Steel Canada assets ended without a suitable buyer and was postponed until the market improves.
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