Essar Steel Algoma Secures Amendment to Term Loan Credit Facility

    SAULT STE. MARIE, ON, Sept. 10 /CNW/ - Essar Steel Algoma Inc. ("the
Company") announced today that lenders holding a majority of the Company's
US$315.7 million Senior Secured Term Loan Credit Facility (the "Facility")
have approved a permanent amendment to the Facility enabling continued
compliance with the Facility and providing the Company with increased
operating flexibility going forward. Essar Steel Algoma has been compliant in
its covenants to date, however, in view of the prevailing market conditions
the Company felt it prudent to seek relaxation of the terms of the Facility.
    Among other things, the amendment waives compliance with maximum leverage
and minimum interest coverage ratios for a four quarter holiday period
beginning September 2009 through the quarter ended June 30, 2010, with revised
covenant levels reinstated thereafter. The amendment became effective
September 9, 2009.
    The Company's CEO, Armando Plastino, remarked on the waiver noting, "This
amendment is an endorsement from our lenders, demonstrating their confidence
in the Company's ability to effectively respond to these unprecedented market
conditions. It further acknowledges our continued commitment to our employees
and the community of Sault Ste Marie through capital investments of nearly CDN
$400 million since the acquisition. Currently, steel markets have strengthened
both in terms of price and volume allowing us to recall laid-off employees. We
are confident that this amendment now provides the Company with the necessary
flexibility and stability to continue to weather this market cycle with a view
to long term sustainability."

For further information:

For further information: Brenda Stenta, Manager Corporate
Communications, Phone: (705) 945-2209, E-mail:

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Essar Steel Algoma Inc.

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