Stelco (U. S. Steel Canada) to File Materials with Court Regarding Proposed Transaction with Bedrock Industries Group LLC

  • Files Plan of Compromise, Arrangement and Reorganization, Information Circular, information regarding Supplementary Claims Process, information regarding Meeting of Affected Creditors and Stay Extension Motion with the Ontario Superior Court of Justice
  • Seeks authorization to extend PSA with Bedrock to May 31, 2017
  • Seeks extension of stay period under CCAA protection to May 31, 2017
  • Motions to be heard on March 15, 2017

HAMILTON, ON, March 10, 2017 /CNW/ - Stelco, the name under which U. S. Steel Canada Inc. carries on business ("Stelco" or the "Company") announces that it has finalized a Plan of Compromise, Arrangement and Reorganization (the "Plan") and associated Information Circular, among other materials, for filing with the Ontario Superior Court of Justice (the "Court"). The purpose of the Plan is to restructure Stelco's liabilities and to facilitate a restructuring transaction (the "Proposed Transaction") between the Company, Bedrock Industries Group LLC ("Bedrock") and other key stakeholders that would result in the Company becoming a strong, and competitive participant in the North American steel industry. The Company previously entered into an Acquisition and Plan Sponsor Agreement ("PSA") with Bedrock that set the framework for the Proposed Transaction. Subject to Court approval, the PSA will be extended to May 31, 2017.

"Sustained, constructive efforts from a number of parties have gotten this process to the point where we can see light at the end of the tunnel," said Bill Aziz, Chief Restructuring Officer, Stelco. "Stelco has an opportunity to re-emerge as a strong, independent Canadian steel producer. This is the best – and only – outcome that addresses the interests of stakeholders."

Meetings of Affected Creditors

Stelco's Directors and the Company's Court-appointed Monitor, Ernst & Young Inc. (the "Monitor"), believe that implementation of the Plan and the various Stakeholder Agreements contemplated by it will generate the highest reasonable value in a timely manner for Affected Creditors (as defined in the Plan) and other creditors given the available alternatives. Under the Plan and related Stakeholder Agreements, pensioners will continue to receive their existing pensions, and a sizeable portion of their Other Post-Employment Benefits ("OPEB").

Pending approval by the Court, Affected Creditors are asked to review the Plan and the information about it and then vote to approve the Plan at Meetings of the Affected Creditors.

In addition, other requisite Stakeholder Agreements are in the process of being finalized and will need to be executed.

Supplementary Claims Process

A variety of potential claims were excluded from the initial process for proving claims that was set out in the Claims Process Order. To facilitate consideration of and voting on the Plan, it is necessary for Stelco and the Monitor to call for some of these additional claims now. Accordingly Stelco, in consultation with the Monitor and various stakeholders, has developed a proposed Supplementary Claims Process, which sets out procedures for the filing and determination of all Non-USW OPEB Claims, Non-USW Pension Claims, Supplementary Pension Claims, Non-USW Employee Restructuring Claims, and D&O Claims. A Motion regarding the Supplementary Claims Process will be heard on March 15, 2017. Further details regarding the Supplementary Claims Process can be found in the Affidavit of William E. Aziz, regarding the Supplementary Claims Process Order, sworn March 10, 2017 and in the Information Circular.

Stay Extension

Stelco has been operating under Companies' Creditors Arrangement Act ("CCAA") protection since being granted an initial stay of proceedings in September of 2014. The stay period was previously extended to March 31, 2017. Stelco will be requesting an extension of the stay period to May 31, 2017.

Ernst & Young Inc., as the Court-appointed Monitor, continues to oversee the business and financial affairs of the company during the CCAA process. Current Court filings, including the Plan of Compromise, Arrangement and Reorganization, Information Circular and information regarding a Supplementary Claims Process and other information relevant to the restructuring process is available on its website at www.ey.com/ca/USSC.

Stelco will continue to provide updates as developments warrant.

About Stelco

Powered by Canadian craftsmanship, Stelco's operations in Hamilton and Nanticoke reflect the strength of each community. Together employing more than 2,200 people, these full integrated, industry-leading facilities are among the most safe, environmentally progressive, and productive steel plants in the world. Hamilton Works is located on the shore of Lake Ontario in Hamilton, Ontario. Lake Erie Works is about an hour's drive south, and is located in Nanticoke, Ontario, on the shores of Lake Erie. Stelco produces high-quality steel that is used primarily in the North American automotive, construction, infrastructure, appliance, manufacturing and pipe and tube industries.

SOURCE Stelco

For further information: Joel Shaffer, Longview Communications, 416.649.8006, jshaffer@longviewcomms.ca or Trevor Harris, Director, Government and Public Affairs, 905.577.4447 / 905.518.9915, trevor.harris@stelcocanada.com


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