Ontario's Superior Court to hear sale plan for U.S. Steel plants in Hamilton, Nanticoke
31 March 2015
Ontario's Superior Court will hear plans that outline the potential sale of U.S. Steel Canada mills and properties in Hamilton and Nanticoke Monday.
The court proceedings, held in Toronto, outline a two-stage process to dump the plants by the end of the year, essentially creating a road map for a potential buyer to express interest.
U.S. Steel Canada has already been trying to sell 813 acres of polluted industrial property on the Hamilton Harbour. This motion would encompass that but also set the stage to sell the coke ovens and steel production plants and equipment in both Hamilton and Nanticoke, across from Lake Erie. The company conducts most of its steel-making business from the two plants.
U.S. Steel sought bankruptcy protection under the Companies’ Creditors Arrangement Act last September, citing years of losses totalling some $2.4 billion since 2009. The sale was intended to be settled by November, but the timeline has been extended several times. The company’s goal is to sell its Canadian operations by the end of October 2015.
The broad framework for sale or restructuring sets a timeline for potential buyers to suggest a price for the mills, the land, or both. They'll also have to file a plan to navigate the company's complex obligations, including pensions and current employees.
The framework up for court approval "accommodates a broad range of positive outcomes," according to an affidavit from U.S. Steel Canada's Connecticut-based financial advisor, Homer Parkhill.
Court documents outline that plan for "soliciting interest in and opportunities for a sale, restructuring or recapitalization of the assets and business operations" of U.S. Steel Canada.
"I believe that is is important for U.S. Steel Canada to canvass the market to better understand the options available to it in its restructuring," Parkhill said.
As of the end of last month, the company has $142.7 million in cash on hand and hasn't touched its credit line extended by the parent U.S. Steel, Parkhill said.