HAMILTON, ON, Jan. 27 /CNW/ - Stelco Inc. (TSX:STE) today provided an
update in the matter of its Court-supervised restructuring.
The Company announced that the Forty-Ninth Report of the Monitor has been
filed. The full text of the Report can be accessed through a link available on
Stelco's web site.
The Report deals exclusively with the matter of facilitating Stelco's
sale of its interest in Norambar Inc., Stelwire Ltd. ("Stelwire") and Stelfil
LtDee to Mittal Canada Inc. ("Mittal"). The Court approved this transaction on
December 12, 2005. The Report notes that Stelwire is the only one of the three
non-core subsidiaries that is an applicant under the CCAA proceedings.
Stelco and Mittal are seeking to close the transaction on January 31,
2006. The Company's restructuring plan, however, will not be implemented by
that date. This has raised concerns on the part of Mittal regarding Stelwire's
status as a CCAA applicant and liability for affected claims.
The Monitor notes that it has worked with Stelco and Mittal to find a way
to address Mittal's concerns in order to allow the transaction to close on
January 31, 2006. The Report states that Stelco will seek a Court Order to the
effect that on the closing of the transaction: (a) the Initial Order and
subsequent Court Orders in the CCAA proceedings will not be construed in any
way that restricts Mittal's ability to carry on the business of Stelwire,
(b) the Monitor's powers and duties in respect of Stelwire will be limited,
(c) the holders of affected claims will have no further recourse to Stelwire
unless provided for in the restructuring plan, and (d) if the plan is not
implemented, the affected claims that have recourse against Stelwire or the
property of Stelwire shall only have recourse to the sale proceeds from the
sale transaction.
The Monitor recommends that Stelco's application in this regard be
granted as a means of facilitating the closing of the transaction.
Stelco also announced the outcome of the share election process
undertaken by affected creditors in the matter of the Company's approved
restructuring plan.
Under the Company's restructuring plan, affected creditors could elect to
receive all or part of their distribution from the cash pool in new common
shares. A total of 5.624 million shares were available for that purpose, to be
shared pro rata if affected creditors subscribed collectively for more than
this number. The total value of affected creditor claims for purposes of the
Company's restructuring plan is approximately $546,703,308.
Stelco advises that the affected creditors elected to receive all of the
5.624 million shares that were available. Each affected creditor who made such
an election will receive approximately 33.1% of the new common shares they
elected to receive.
The Company also announced today that it has accepted an offer of
financing from Tricap Management Limited regarding the $375 million bridge
loan facility contemplated under Stelco's restructuring plan.
About Stelco
Stelco Inc. is a large, diversified steel producer. Stelco is involved in
major segments of the steel industry through its integrated steel business,
mini-mills and manufactured products businesses. 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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