Lakeside Steel files motion to intervene in Federal Minister's Court Application on US Steel



    
    CALLS FOR SALE OF US STEEL CANADA AS APPROPRIATE REMEDY IN ORDER TO
    RESUME OPERATIONS OF HAMILTON AND LAKE ERIE WORKS (FORMERLY STELCO)
    

    TORONTO, Aug. 5 /CNW/ - Lakeside Steel Inc. and its wholly owned
subsidiary Lakeside Steel Corp. (collectively "Lakeside" or the "Company")
(TSXV: LS) today announced its filing of a motion ("Intervener Motion") with
the Federal Court of Canada to obtain intervener status in the application
filed on behalf of the Minister of Industry ("Minister") under the Investment
Canada Act (the "Minister's Application") against United States Steel
Corporation ("US Steel") and U.S. Steel Canada Inc. ("US Steel Canada").
    Lakeside is a diversified steel pipe and tubing manufacturer in Welland,
Ontario, which reported revenue of approximately $207 million, EBITDA of
approximately $10.5 million and net income of approximately $6.5 million for
the year ended March 31, 2009. US Steel Canada has been a supplier to
Lakeside.
    Lakeside supports the initiative taken by the Minister to file the
Minister's Application and is seeking to intervene in the Minister's
Application to make the Court aware of the impact of the shutdown of US Steel
Canada's operations on the Canadian steel industry and to propose alternative
remedies requiring the sale of US Steel Canada. Lakeside is interested in
acquiring US Steel Canada, and if successful in that acquisition would comply
with US Steel's commitments on production and employment. A sale of US Steel
Canada is a remedy available to the Federal Court under the Investment Canada
Act.
    "The Minister's approach is appropriate in requiring foreign investors,
who invest capital subject to commitments, to meet those commitments or face
the available remedies," said Vic Alboini, Chairman and Chief Executive
Officer of Lakeside. "The Lakeside alternative being proposed to the Court
would repatriate a former Canadian icon and resume operations immediately at
the Hamilton and Nanticoke facilities. We believe this is a viable business
solution to address the difficult reality at US Steel Canada."

    Background to Lakeside's Intervener Motion

    Stelco Inc. ("Stelco") filed for creditor protection under the Companies
Creditors Arrangement Act ("CCAA") on January 29, 2004. Lakeside acquired
Stelco's steel pipe and tubular assets in Stelpipe Ltd., a wholly owned
subsidiary of Stelco, on October 31, 2005 when Stelco was subject to the CCAA
filing. Stelco's equity at the time of the CCAA filing became worthless as a
result of the CCAA process. Stelco emerged from the CCAA process on March 31,
2006 and 19 months later was acquired by US Steel on October 31, 2007 for
approximately $2 billion, consisting of approximately $1.22 billion in equity
and approximately $839 million in assumed debt. US Steel renamed Stelco as US
Steel Canada and shut down the operations of US Steel Canada 17 months
following its purchase in apparent contravention of commitments made to the
Minister at the time of the acquisition.
    The Minister states in his Application that US Steel committed to produce
on average at least 4,345,000 tons annually over a three year period and
committed to employ on average 3,105 employees. These commitments for US Steel
Canada's business were given in support of US Steel's application to the
Minister for approval of its acquisition of Stelco in 2007.
    If the commitments were made without any qualification, such as
materially changed economic circumstances, the Investment Canada Act provides
the Federal Court with certain remedies. The Minister's Application is seeking
an order for US Steel to comply with its commitments, a penalty of $10,000 per
day for the breach of each commitment and any other appropriate relief.
    "Despite the compliance order and the penalty being requested by the
Minister, there is a strong incentive for US Steel to comply with 'Buy
American' requirements, which are an integral part of the U.S. stimulus
initiative, by filling orders from its US facilities, rather than from the
Canadian Stelco facilities. It is therefore highly unlikely that US Steel will
meet its production and employment commitments made to the Minister," said
Alboini. "It is important for Stelco to be owned or controlled by a Canadian
company, for the long term benefit of Stelco's employees, customers and
suppliers."
    Lakeside is asking the Court for an order requiring US Steel to sell US
Steel Canada. Lakeside is an interested purchaser, would reopen Stelco
immediately and would comply with the production and employment commitments
made by US Steel to the Minister. Lakeside is the only remaining publicly held
Canadian-owned steel manufacturer. The Lakeside business was part of Stelco
and the challenges at the former Stelco are the same issues that Lakeside has
addressed.

    About Lakeside Steel Inc.

    Lakeside is the parent company of Lakeside Steel Corp. ("Lakeside
Steel"). Lakeside Steel, located in Welland, Ontario, is a diversified steel
pipe and tubing manufacturer. Lakeside Steel's list of customers includes
large oil and gas, mining, automotive and commercial and industrial supply
companies. In addition to supplying its products in these industries, Lakeside
Steel manufactures pipe and mechanical tubing for the resale market, which is
sold to distributors in Eastern Canada and the Northeastern United States.
Lakeside Steel manufactures a variety of products for these industries
including oil well tubing and casing, mechanical tubing, pressure tubing,
automotive tubing, hollows for redraw, line pipe, heating and plumbing pipe,
drill rod and specialty tubing. Lakeside Steel serves customers worldwide,
either directly or indirectly, in Canada, Australia and the United States.

    
    The TSX Venture Exchange has not reviewed and does not accept
    responsibility for the adequacy or accuracy of this release.
    





For further information:

For further information: Vic Alboini, Chairman & Chief Executive
Officer, Lakeside Steel Inc., (416) 644-8110, Fax: (416) 644-0271, e-mail:
valboini@northernsi.com; Ken Hunter, Chief Financial Officer, Lakeside Steel
Inc., (905) 735-7473 ext 7218,  Fax: (905) 735-9069, e-mail:
ken.hunter@lakesidesteelcorp.ca

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LAKESIDE STEEL INC.

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