Includes provisions regarding plant loading of critical automotive products
PITTSBURGH, Oct. 9, 2015 /CNW/ -- Today, United States Steel Corporation (NYSE: X) announced that the Ontario Superior Court of Justice has approved a mutually agreed upon transition plan with U. S. Steel Canada (USSC) as part of USSC's restructuring under Canada's Companies' Creditors Arrangement Act (CCAA) process. The agreement is an important step in separating the two parties.
Highlights of this agreement include:
- U. S. Steel will not be generating any sales on behalf of USSC;
- Going forward U. S. Steel will load its production on its U.S.-based mills;
- U. S. Steel shall transition away from providing any technical and engineering services associated with product development or sales with USSC, and U. S. Steel will not support any field quality claims made against USSC;
- U. S. Steel will continue to provide all shared services that USSC relies upon for up to 24 months, with the exception of sales;
- Should USSC enter into a new sale and restructuring process (SARP) in the future, U. S. Steel will not be a bidder.
On Sept. 16, 2014, USSC's board of directors unanimously decided to apply for relief from its creditors pursuant to Canada's Companies' Creditors Arrangement Act. As a result of the 2014 CCAA filing, USSC and its subsidiaries were deconsolidated from U. S. Steel's financial statements on a prospective basis. Despite efforts in the months following the CCAA filing, no negotiated or other settlement was achieved.
Prior to the Sept. 2014 CCAA filing, USSC recorded a loss from operations in each year for five years, with an aggregate operating loss of approximately $2.4 billion, or in excess of $16.00 per diluted share, since December 2009. Additionally, USSC represented approximately $1 billion of U. S. Steel's consolidated Employee Benefits liability as of June 30, 2014.
United States Steel Corporation, headquartered in Pittsburgh, Pa., is a leading integrated steel producer and Fortune 200 company with major production operations in the United States and Europe. The company manufactures a wide range of value-added steel sheet and tubular products. For more information about U. S. Steel, please visit www.ussteel.com.
SOURCE United States Steel Corporation
For further information: Media: Courtney Boone, (412) 433-6791; Investors/Analysts: Dan Lesnak, (412) 433-1184, http://www.ussteel.com