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Stelco considering raising C$200 million in equity
By Jeff Pines
Washington, Oct. 14 - Bankrupt Canadian steel producer Stelco Inc. is considering raising C$200 million of new equity either from a rights offering or an equity solicitation process, according to the 10th monitor's report.
Ernst & Young Inc. is Stelco's court-appointed monitor.
Bondholders will have until Nov. 8 to conduct due diligence and submit a term sheet if they are interested.
Until then, Stelco said it will not solicit any other financing proposals or a sale of the entire company.
Deutsche Bank, a major Stelco bondholder, has approached the company about conducting due diligence, the monitor said.
UBS Securities LLC and Ernst & Young will advise Stelco.
If the court decides against the Nov. 8 deadline for bondholders, the company's proposed timeline calls for Stelco to contact potential investors by Oct. 22, receive proposals by Nov. 26, select bidders by Dec. 17, and have bidders complete their due diligence by Jan. 31, 2005.
Stelco filed for protection under Canada's Companies' Creditors Arrangement Act on Jan. 29, 2004.
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