Stelco agreement in principle secures employee support for CCAA plan

By Caroline Salls

Pittsburgh, April 19 – Stelco, the name under which U.S. Steel Canada Inc. does business, and Bedrock Industries Group LLC reached an agreement in principle with Stelco’s salaried employees and retirees and others represented by court-appointed representatives and counsel regarding their support for Stelco’s plan of arrangement, compromise and reorganization, according to a Stelco news release.

The agreement in principle covers the treatment of other post-employment benefits (OPEB), unfunded supplemental pensions claims, termination and severance claims and future pension service.

Under the agreement, which is subject to approval by the Ontario Superior Court of Justice, the Stelco salaried and other non-USW group agreed to vote in favor of the plan.

“Momentum continues to build toward this great company having an opportunity to re-emerge as a strong, independent Canadian steel producer,” Stelco chief restructuring officer Bill Aziz said in the release.

“We are getting closer to the best – and only – outcome that balances the realities of the situation with the interests of the many stakeholders.”

The company said a formal settlement agreement and related materials are also being prepared and will be filed with the court in due course.

According to the release, the purpose of the plan is to restructure Stelco’s debt and to facilitate a restructuring transaction between the company, Bedrock and other key stakeholders that would result in Stelco becoming a strong, and competitive participant in the North American steel industry.

On March 15, the court approved a meeting order that authorized meetings of affected creditors to be held on April 27 to vote on the plan.

As a result of the agreement announced Wednesday, Stelco said it is now well positioned to obtain approval of its plan by the affected creditors at the meetings.

Court-appointed monitor Ernst & Young Inc. continues to oversee the business and financial affairs of the company during the Companies’ Creditors Arrangement Act process.

U.S. Steel Canada filed for CCAA protection in September 2014.

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