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Stelco shareholders request sale of company; plan creditors' stock election deadline Jan. 16
By Caroline Salls
Pittsburgh, Jan. 9 - Stelco Inc. shareholders have requested the sale of the company's entire enterprise as a going concern, according to a company news release.
A hearing is scheduled for Jan. 17, at which time the Ontario Superior Court of Justice will also consider approval of the company's restructuring plan.
Stelco said it does not believe that the sale would be in the best interests of the company and its stakeholders.
In addition, Stelco said in the release that affected plan creditors have until 5 p.m. ET on Jan. 16 to elect to receive all or any part of their distribution from the cash pool in new common shares in the reorganized company.
The distribution would be subject to an overall limit on the number of new common shares that creditors collectively can elect to receive.
Any affected creditors who do not elect to receive new common shares will receive their entire distribution in cash.
The company also said in the release that the process of identifying a new board of directors is continuing.
An agreement with Stelco's three significant equityholders provides that the new board will consist of: four directors to be named by Tricap Management Ltd., one director to be named by each of Sunrise Partners LP and Appaloosa Management LP and the remaining three directors to be satisfactory to the three significant equityholders as a group.
According to the release, the three equityholders, who together will hold a majority of shares in the company after completion of the restructuring, want current chief executive officer Courtney Pratt to be named chairman of the new board of directors.
As a result, the company will seek a new chief executive officer.
The plan is scheduled to take effect in February.
Stelco, a Hamilton, Ont.-based steel company, filed for bankruptcy under the Companies Creditors' Arrangement Act on Jan. 29, 2004.
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