HAMILTON, ON, March 24 /CNW/ - Stelco Inc. announced today that it has
proposed to amend its Court-approved restructuring plan to change, among other
things, certain terms of the New Secured Floating Rate Notes ("FRNs") to be
issued under the plan. The amendments include an increase of 0.50% to the
interest rate payable under the FRNs in the first two years of the term and
thereafter under certain circumstances. The call protection for the FRNs has
also been changed.
The proposed amendments to the FRNs are the result of discussions held
among key stakeholders to finalize the terms of various agreements
contemplated by Stelco's restructuring plan. The proposed amendments require
the consent of the Court-appointed Monitor, Tricap Management Limited and the
other equity sponsors, and must not be objected to by the Senior Bondholder
Steering Committee ("the SBSC"). Stelco has obtained the consent of the
Monitor and Tricap. The Company is awaiting confirmation from the other equity
sponsors and the SBSC that Stelco may proceed with the proposed amendments.
The Province of Ontario supports the amendments.
Stelco also announced that it will seek an Order of the Superior Court of
Justice (Ontario) in connection with U.S. securities law requirements and the
issuance of the amended FRNs. The motion is scheduled to be heard on Tuesday,
March 28, 2006. If for any reason the remaining confirmations from the other
equity sponsors and the SBSC are not obtained, the motion will not proceed.
On March 9, 2006, Stelco sought and obtained an Order in connection with
U.S. securities law requirements and the issuance and exchange of the FRNs and
guarantees of Stelco's obligations under the FRNs. The Company has been
advised by U.S. securities law counsel that an Order similar to that obtained
on March 9, 2006 is required in respect of the amended FRNs.
The Order being sought, if granted, will enable Stelco to utilize a U.S.
securities law exemption by approving the terms and conditions of the issuance
and exchange of the amended FRNs and other securities for the claims of
affected creditors, and by declaring that those terms and conditions are fair
to the affected creditors, in a manner similar to the approval in the March 9,
2006 Order.
Notice of this motion is being provided so that affected creditors and
other persons are aware of the hearing and of the fact that the hearing is
open to them to be heard. A copy of the court materials for the motion,
including the form of letter that would amend Stelco's restructuring plan to
change the terms of the FRNs, will be accessible through a link available on
the Company's web site.
About Stelco
Stelco is one of Canada's longest-established steel companies. It is
currently in the final stages of a Court-supervised restructuring. This
process is designed to establish the Company as a viable and competitive
producer for the long term. The new Stelco will be focused on its two
Ontario-based integrated steel businesses located in Hamilton and in
Nanticoke. These operations produce high quality value-added hot rolled, cold
rolled, coated sheet and bar products. 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 2005 Annual Report. To learn more about Stelco and its
businesses, please refer to our Web site at www.stelco.ca.
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