Essar Global ‘disappointed to learn’ about asset purchase agreement

By Caroline Salls

Pittsburgh, June 21 – Essar Global responded to Essar Steel Algoma Inc.’s announcement that it entered into an agreement to sell a substantial portion of its assets to a consortium of bidders as part of its Companies’ Creditors Arrangement Act proceedings.

“Essar Global is disappointed to learn that Algoma has entered into an asset purchase agreement with a consortium of financial bidders led by a private equity fund,” Essar Global said in a news release.

“This step of going forward to sign the asset purchase agreement is a decision taken by Algoma in consultation with their advisers and others, and does not have the support of Essar Global.

“In Essar Global’s view, there has not been adequate opportunity for other potential bidders to participate throughout this process. In addition, a better pricing‎ environment should have allowed more time to pursue other alternative options to ensure the best result for Algoma’s stakeholders.”

Essar Global said it invested nearly $800 million into Essar Steel Algoma’s operations during its ownership of the company, “supported the business through several downturns and established strong relationships with employees and the local community.”

Essar Global said it “can neither confirm nor deny its involvement in the Algoma bidding process.”

“It is Essar Global’s sincere hope that jobs, pensions and benefits are continued to be preserved in the event of a change in ownership, and that new investments are continued to be made to ensure Algoma’s relevance in the marketplace,” the release said.

Essar Steel Algoma is based in Sault Ste. Marie, Ont., and manufactures hot and cold rolled steel products. The company filed for bankruptcy on Nov. 9, 2015 in the U.S. Bankruptcy Court for the District of Delaware under Chapter 15 case number 15-12271.

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