Stelco to sell all shares of Norambar, Stelfil, Stelwire

By Caroline Salls

Pittsburgh, Nov. 23 - Stelco Inc. entered into a definitive agreement for the sale of 100% of the shares of Norambar Inc., Stelfil Ltée and Stelwire Ltd. and related assets to Mittal Canada Inc., an affiliate of Mittal Steel Company NV, according to a company news release.

The sale process reflects Stelco's decision, as outlined in the four-point strategy announced in July 2004, to focus on its integrated steel business.

The purchase price was not disclosed. As in past asset sale transactions during its restructuring process, Stelco will ask the court to seal the information until the sale has closed.

The transaction is subject to conditions, including regulatory, lender and Ontario Superior Court of Justice approval, and is expected to close in early 2006.

"This transaction is good news for the subsidiaries, for their employees and retirees and for Stelco," president and chief executive officer Courtney Pratt said in the release.

"It provides the subsidiaries with ownership that views them as strategic assets. It provides the employees and retirees with increased certainty. And it assists Stelco in focusing on its integrated steel business going forward."

Canada contributes to cogeneration projects

Stelco also announced that the Government of Canada has agreed to contribute $30 million to the cost of the proposed near-term electricity cogeneration projects that form part of the company's critical capital expenditure program.

The contribution will be made through Environment Canada's Partnership Fund, an initiative announced in the 2005 budget with the goal of facilitating project-specific climate change investments.

The funding is expected to be provided during the first quarter of 2006.

The projects at Stelco's Hamilton and Lake Erie facilities are designed to reduce the cost of electricity, make Stelco more energy self-sufficient, utilize waste-gas fuels generated by the production process and reduce emissions into the atmosphere.

The federal contribution represents about 60% of the initial cost of the company's near-term cogeneration projects, and Stelco has committed to spend $50 million towards those projects in 2006.

"The federal contribution and the cogeneration projects are important to Stelco's restructuring and to its future," Pratt said in the release.

"They will assist in the implementation of our four-point strategic plan announced in July 2004.

"Together with expansion of the hot strip mill at Lake Erie and a new pickle line in Hamilton, the cogeneration projects will play a significant role in making Stelco a more competitive and viable steel producer for the long term," Pratt said.

Stelco, a Hamilton, Ont.-based steel company, filed for bankruptcy under the Companies Creditors' Arrangement Act on Jan. 29, 2004.

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