'We expect to come out of this a much stronger company' - Kalyan Ghosh

Kalyan Ghosh, chief executive officer of Essar Steel Algoma Inc., is surprisingly upbeat after today's announcement that his company is seeking protection from its creditors.

"We expect to come out of this a much stronger company," Ghosh told SooToday this afternoon.

"Coming out of CCAA (Companies’ Creditors Arrangement Act), we will be a much better company. It will be good also for the community as a whole," the CEO said.

Ghosh stressed that the company's current trials are the result of a bad steel market that is currently reaching the bottom of a commodity cycle, as well as low-cost imports and termination of Essar's long-term iron ore supply contract with Cliffs Natural Resources Inc.

He also emphasized that Essar Steel Algoma has already obtained US$200 million in debtor-in-possession financing that will allow operations to continue local operations as before, until the court-ordered protection ends in September of next year.

"We will be paying payrolls, health benefits and local suppliers on a going-forward basis," Ghosh said.

He refused to speculate on how much suppliers might expect to recover from current debts through the CCAA process. 

The company is contacting retirees to advise them that they will continue to receive their normal pension and health benefits.

However, special payments made by Essar Steel Algoma to cover the deficit positon on health plans will be be stayed as a condition for the debtor-in-possession financing, said Brenda Stenta, manager of corporate communications.

(FILE PHOTO: Kalyan Ghosh, chief executive officer of Essar Steel Algoma.)

Earlier SooToday coverage of this story

Mayor already talking to Essar Steel Algoma

Essar Steel Algoma to continue operations during restructuring

Essar Steel Algoma enters creditor protection, says report