Steel Mills
Algoma Union Supporting Anonymous Bidder
Written by Sandy Williams
April 12, 2017
USW Local 2251 voted 98.6 percent in favor of ratification of a Support Agreement for an undisclosed party interested in acquiring the assets of Essar Steel Algoma Inc. The announcement was made April 10 in a press release signed by Local 2251 president Mike Da Prat.
Da Prat told the Sault Star that he could not disclose the name of the entity due to a gag order imposed by Judge Newbould on mediation talks among the unions, company and DIP Term Lenders. Da Prat confirmed that the entity is not the term lenders but would not offer further information.
“I will just say that it is another party, separate of the term lenders,” DaPrat said as quoted by the Sault Star. “We wait and see if the entity is let in and we’re very hopeful. It’s up to the court to decide what’s next,” he added.
Essar Global has pressed its case with the courts to be allowed to bid for the CCAA protected steel company but had not re-submitted an official bid for the company after an early rejection in the submission process. The union had signaled its support of returning to ownership by former parent Essar.
The former owner (Essar Global) purchased the mill in 2007 and took the mill into bankruptcy twice, in 1991 and again in 2001. In 2014 Algoma completed a recapitalization and refinancing plan supported by Essar Global Fund. Faced with growing debt and net loss, Algoma entered its most recent entry to CCAA protection in November 2015. Essar Global has also taken Minnesota Steel into bankruptcy.
Essar Steel Algoma file an oppression case against Essar Global Fund and its affiliates in October 2016 charging that Essar consistently put the interests of Essar Group ahead of Algoma and its stakeholders. One of the issues was an agreement made with the Port of Algoma. In a March decision, Superior Court Judge Frank Newbould agreed that the terms of a lease agreement made by Essar Global with the Port of Algoma (Portco) in 2014, was “unfairly prejudicial to, and unfairly disregarded, the interests of Algoma’s trade creditors, employees, pensioners and retirees.”
Essar Steel Algoma’s latest stay period extension will expire April 30.
Sandy Williams
Read more from Sandy WilliamsLatest in Steel Mills
AHMSA opens doors to potential buyers as $1.3B asset auction nears
AHMSA is opening its doors to potential buyers to tour its steel plant and mining operations in northern Mexico in preparation for the next stage of its bankruptcy process: the auction of its assets.
USW seeks clarity on USS plans for Granite City Works
The United Steelworkers union has asked U.S. Steel to elaborate on its Granite City Works plans following reports that the steelmaker is ending processing at the facility.
Nucor maintains plate prices, opens October order book
Nucor aims to keep plate prices flat for a seventh straight month with the opening of its October order book.
ArcelorMittal Mexico to import from sister mills as it works to resume DRI production
ArcelorMittal has partially restarted operations at its direct reduction plant in Lazaro Cardenas, Michoacan. An explosion on Aug. 18 rocked the massive steelworks on Mexico’s Pacific coast, impacting production of direct-reduced iron (DRI).
Fall maintenance outages are coming in hot
Labor Day has passed, the sun is starting to set a little earlier each day, and cooler weather has begun to find its way down to many of us across North America. And you know what that means for the steel industry… Fall maintenance outages!