Ontario Steel Investment Signs Letter of Intent with United Steelworkers Local 2251
Jul 12, 2016, 10:10 ET
- Agreement will see Ontario Steel assume all pension and benefit liabilities following the acquisition of Essar Steel Algoma -
SAULT STE. MARIE, ON, July 12, 2016 /CNW/ - Ontario Steel Investment Limited ("Ontario Steel"), announced today that it has signed a letter of intent with the United Steelworkers Union, Local 2251, to negotiate the framework of an acquisition of Essar Steel Algoma Inc. ("Algoma") by Ontario Steel.
Under the agreement, Ontario Steel will assume all employer liabilities under Algoma's defined benefit registered pension plans as well the liabilities for Algoma's Other Postemployment Benefits (OPEBs). Ontario Steel will also continue the current OPEB coverage for both active and retired employees. The agreement assumes a total purchase price for Algoma of approximately US$900 million.
Ontario Steel will also pay all outstanding taxes owed to the City of Sault Ste. Marie within six months of a change in ownership and will accept all environmental liabilities subject to an understanding with Ontario's Ministry of the Environment and Climate Change (MOECC).
Ontario Steel provided the following comment with respect to the agreement with USW Local 2251:
"We know that any steel business runs on its people; they are the lifeblood of this industry. That's why we are working closely with the United Steelworkers Union to put plans in place that will protect jobs, pensions and benefits at Algoma. They need long term, strategic owners, which put workers in a position to do what they do best – manufacture the best steel in the world, right here in Ontario."
"To date, the restructuring processes at both Algoma and US Steel Canada (USSC) have lacked clarity and transparency and have not served the best interests of the people. The outcomes at USSC and Algoma will affect the lives of tens of thousands of Ontarians – current workers, retirees, their families and the community as a whole. They deserve a fair and competitive processes and outcomes that serve the best interests of all stakeholders, not a select few."
"We believe there is a better way. That's why we want to see the USSC and Algoma processes re-opened and all alternative bidders be given a fair chance to participate. That will serve the best interests of all involved, particularly the people that depend on this industry the most."
"Essar Global has a history of strong, constructive relations with union membership in Ontario, and we look forward to continuing that through Ontario Steel at Algoma."
About Ontario Steel Investment Limited
Ontario Steel Investment Limited is a consortium of steel industry specialists, including the shareholders of Essar Global. It was established as an investment vehicle for the Ontario steel industry.
SOURCE Ontario Steel Investment Limited
Image with caption: "Ontario Steel Investment Limited (CNW Group/Ontario Steel Investment Limited)". Image available at: http://photos.newswire.ca/images/download/20160712_C8374_PHOTO_EN_732681.jpg
For further information: Media Contact: Nina Godard, Edelman, 416-455-6324, [email protected]
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