HAMILTON, ON, Feb. 3 /CNW/ - Stelco Inc. (TSX:STE) today announced that
materials were served late this afternoon in the matter of an application to
be heard on February 10, 2006. The application seeks Court approval of a
proposed post-CCAA corporate structure in which distinct portions of the
Company's business would be transferred into separate limited partnerships.
The proposed limited partnerships cover the following businesses:
Hamilton steel, Lake Erie steel, Hamilton coke, Lake Erie coke, Hamilton
energy, Lake Erie energy, mining, Hamilton land and Lake Erie land.
The proposed reorganization was announced on January 20, 2006. It is a
condition of Stelco's financing from Tricap Management Limited ("Tricap") that
Tricap must be satisfied with the Company's financial and corporate structure.
Tricap and the other equity sponsors under Stelco's Court-approved
restructuring plan are of the view that the proposed reorganization will,
among other things, minimize the cost of capital by enabling the financing of
the individual business units in the most effective way possible.
The materials served this afternoon note that numerous discussions have
been conducted in recent weeks among Tricap, Stelco, the Court-appointed
Monitor, the USW, active and retired salaried employees, bondholder
representatives and the Province of Ontario, among others. The material adds
that the revised proposed reorganization endeavours to balance a range of
issues while facilitating the goal of enabling Stelco to emerge successfully
from the CCAA process.
As noted in the application materials, among the features of the proposed
reorganization are provisions concerning the pension plan funding arrangement
contained in Stelco's restructuring plan. In addition to confirming the
ten-year funding arrangement agreed to by the Company and the Province, the
reorganization proposal outlines the ongoing pension funding obligations of
Stelco and of any acquiror of the Company. Stelco will also be prohibited from
making dividend payments or other forms of distribution on its common shares
while the pension funding arrangements are in effect.
This news release may contain forward-looking information with respect to
the Corporation's business operations, financial performance and conditions.
Actual results may differ from expected results for a variety of reasons
including factors discussed in the Corporation's Management's Discussion and
Analysis section of the Corporation's 2004 Annual Report. To learn more about
Stelco and its businesses, please refer to our Web site at www.stelco.ca.
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