Steel Mills
US Steel and Bedrock Industries Agree to Terms for Sale of US Steel Canada
Written by Sandy Williams
November 2, 2016
US Steel Corp announced today that it has agreed to terms proposed with Bedrock Industries Group for the sale and transition of ownership of US Steel Canada. The transaction is subject to customary court approvals.
US Steel Canada has been in Companies Creditor Arrangement Act (CCAA) proceedings since Sept. 16, 2014. Under terms of the agreement with Bedrock, US Steel will receive $126 million in satisfaction of its submission of CAD $2.2 billion secured and unsecured claims against US Steel Canada. In addition it will release US Steel from all claims regarding environmental, pension and other liabilities.
The agreement also stipulates US Steel will “continue to provide certain shared services to USSC and will enter into an agreement to supply USSC with all of its requirements for iron ore pellets through 2021.”
Provincial minister of finance Charles Sousa called the agreement a move that will “save jobs, protect pensions and assist in providing post-employment benefits for active and retired employees at USSC’s Hamilton and Lake Erie facilities.”
Bedrock Industries is a private held holding company focused on owning and operating metals and mining investments. Bedrock and the government of Ontario signed a memorandum of understanding in September. At the time, Marty Warren, USW Ontario Director, said. “We are encouraged by many aspects of the agreement announced today between the Ontario government and Bedrock Industries.” He added, “We have been briefed on the agreement and we acknowledge that the province and Bedrock have made an effort to address many of our concerns about protecting the interests of our members and retirees.”
USW Local 1005 president Gary Howe told CBC News that the union was not pleased with today’s news.
“It’s interesting that two American companies are negotiating in secret to purchase a Canadian company,” he said. “Meanwhile, the pensioners are going to take the hit.
“This whole process is not geared towards workers or people, it’s geared towards making money,” said Howe.
As well as court approvals, a sale will require a vote by the unions at Hamilton and Lake Erie Works. Sources report that the courts will receive details of the agreement within weeks.
Sandy Williams
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