SAULT STE. MARIE, ON, June 21, 2016 /CNW/ - Essar Global today provided the following comment regarding the June 17, 2016 announcement about Essar Steel Algoma Inc. ("Algoma") entering into an agreement to sell a substantial portion of its assets to a consortium of bidders as part of the CCAA restructuring process:
"Essar Global is disappointed to learn that Algoma has entered into an asset purchase agreement with a consortium of financial bidders led by a Private Equity Fund. This step of going forward to sign the Asset Purchase agreement is a decision taken by Algoma in consultation with their advisors and others, and does not have the support of Essar Global. In Essar Global's view, there has not been adequate opportunity for other potential bidders to participate throughout this process. In addition, a better pricing environment should have allowed more time to pursue other alternative options to ensure the best result for Algoma's stakeholders."
"During Essar Global's ownership of Algoma, Essar Global invested almost USD$800 million in its operations, supported the business through several downturns and established strong relationships with employees and the local community. The CCAA process was brought about by cancellation of key raw material contracts essential to the functioning of the business."
"Essar Global remains committed to the Canadian steel industry and continues to see a great opportunity for steel production in this country, which has a proud history of being a world-class industrial provider. Given the confidentiality of the CCAA restructuring process, Essar Global can neither confirm nor deny its involvement in the Algoma bidding process."
"It is Essar Global's sincere hope that jobs, pensions and benefits are continued to be preserved in the event of a change in ownership, and that new investments are continued to be made to ensure Algoma's relevance in the market place."
"Essar Global sees long-term value in their infrastructure assets Port of Algoma Inc. and Essar Power Canada Ltd. In particular, Essar Global looks forward to the Port of Algoma expansion project, which will benefit the residents of Sault St. Marie and the surrounding region."
"Essar Global is optimistic about the future of Canadian steel and looks forward to being active participants for many years to come."
About Essar Global
Essar Global is a global investor, controlling a number of world-class assets diversified across the core sectors of Energy, Steel & Mining, Infrastructure (comprising ports and EPC businesses) and Services (primarily comprising shipping and BPO businesses).
The aggregated revenues of the Fund's portfolio companies total US$35 billion. The Fund's portfolio companies employ over 60,000 people across 29 countries, and have adopted international standards of health, safety, environmental protection and corporate governance.
SOURCE Essar Global
For further information: Nina Godard, Edelman, 416-455-6324, [email protected]