Essar Steel in talks with holders of 9 7/8% notes; 30-day grace period starts for interest payment

By Jennifer Chiou

New York, June 16 – Essar Steel Algoma Inc. said it has entered into confidential discussions with investors representing roughly 77% of its 9 7/8% senior unsecured notes.

The company elected to use the 30-day grace period for the notes’ June 15 interest payment, which is permitted under Algoma's debt agreements.

According to a news release, the company has executed non-disclosure agreements and is engaged in discussions with advisors representing an ad hoc group of holders of $400 million of the notes.

The release stated that the purpose of these discussions is to ensure a permanent capital structure for Algoma and to strengthen the balance sheet for the benefit of the stakeholders.

The company said it is continuing normal business operations.

Essar Steel is a Sault Ste. Marie, Ont.-based manufacturer and seller of rolled steel products, including hot and cold rolled sheet and plate.

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