New bidders emerge for U.S. Steel Canada plants
9 June 2015
The hopes of U.S. Steel Canada's (USSC) plants in Hamilton and Nanticoke are burning brighter after 39 bidders have expressed interest in purchasing all or part of the company's mills or assets.
A report from the overseer of the USSC's restructuring process stated that almost 40 per cent of the 102 companies with the chance to bid on the plants have done so. Those 39 companies have expressed interest in keeping current operations intact, acquiring all or parts of the land and equipment, or buying specific assets.
"I'm not surprised there's interest," said Gary Howe, president of steelworkers union Local 1005m which represents the workers at the Hamilton plant.
"Everyone wants steel to stay in Hamilton so it keeps jobs here and (preserves) the pension and benefits."
None of the companies were identified, but were described in the reports as, "global and North American steel producers, coke producers, steel and metal industry participants, land redevelopers, and private equity and financial investors."
While the report did not specify how many were considering keeping the operations as is, for mill workers represents positive news after the USSC went into bankruptcy protection in September and announced its plans to sell operations in Hamilton and Lake Erie.
Formerly known as Stelco, the mill became USSC after U.S. Steel purchased the operation in 2007. Shortly after the purchase, the plant was idled. Steel and iron-making operations stopped in late 2010 while debts continued to mount.
USSC successfully applied to restructure its business under the Companies' Creditor Arrangement Act - an act allowing financially troubled businesses to restructure their affairs.
Next up: evaluating bidders
This is just the first phase in the restructuring process for the USSC mills. A letter is expected to be sent out to the bidders shortly, the report said, detailing interested parties in the next steps.
Those details will cover the due diligence process, which includes coordinating management presentations and giving a timeline for submission of formal offers.
USSC, partnering with a financial advisor, will start doing checks on the bidders. The evaluations will be looking for who has, "a bona fide interest in the opportunity," and checking on the finances of each bidder, the report said.
Howe believes this is the right step towards his goal of keeping steel in Hamilton and ensuring the benefits for steel workers.