HAMILTON, ON, Sept. 16, 2014 /CNW/ - U. S. Steel Canada Inc., announced today, that it is initiating a Court-supervised restructuring in order to create a restructured business that can compete in the North American steel market for the long term.
The Company has obtained a Court Order from the Ontario Superior Court of Justice for creditor protection under the Companies' Creditors Arrangement Act (CCAA). The Order provides a stay of certain creditor claims against U. S. Steel Canada during the CCAA process and appoints Ernst and Young as monitor of U. S. Steel Canada.
Michael McQuade, President and General Manager of U. S. Steel Canada, said, "Despite substantial efforts over the past several years to make U. S. Steel Canada profitable, it is clear that restructuring U. S. Steel Canada is critical to improving our long-term business outlook. Operational changes, cost reduction initiatives and streamlining of operations cannot on their own make it competitive in the current environment. Entering CCAA was the only responsible course of action under the circumstances and it was taken only after all other options were thoroughly explored."
"To be successful, this process will require a commitment from all relevant stakeholders to pursue innovative solutions that will create a restructured business that can compete in the North American market for the long term. We are grateful for the continuing support of our customers, suppliers and employees at this time and look forward to working together to develop an appropriate solution for the benefit of stakeholders."
A new $185 million credit facility will be put in place to provide funding for the company to operate through the CCAA process. Specifically, U. S. Steel Canada has a commitment from its parent company, U.S. Steel, to provide a debtor-in-possession ("DIP") credit facility to finance its operations during the CCAA. Court approval for this credit facility, including all of its terms and conditions, will be sought at the next hearing (in approximately 3 weeks).
Under the CCAA process U. S. Steel Canada will carry on business as usual while it develops and implements a comprehensive restructuring solution.
U. S. Steel Canada also announced the appointment of William Aziz of Blue Tree Advisors II Inc., as Chief Restructuring Officer of the Company, effective immediately. Mr. Aziz is one of Canada's leading restructuring advisors and has over 20 years of restructuring experience across a diverse range of industries including steel and manufacturing. Reporting directly to board of directors of U. S. Steel Canada, Mr. Aziz will be responsible for directing the restructuring process, working in conjunction with the Company's senior management.
Ernst and Young will make information relevant to the restructuring process available on their website at www.ey.com/ca/USSC.
About U. S. Steel Canada, Inc.
U. S. Steel Canada's operations are located at Lake Erie Works, a fully integrated steelmaking facility and at Hamilton Works, home to cokemaking and finishing operations including our premier zinc-coating facility, the world-class Z-Line. U. S. Steel Canada has the capability of producing approximately 2.6 million tons of steel annually and employs approximately 2,000 people.
SOURCE: U.S. Steel Canada Inc.
For further information: Company Contact: Trevor Harris, Director, Government and Public Affairs, 905.577.4447, [email protected]