Algoma Steel Inc. announced that it has completed the purchase of Essar Steel Algoma Inc. assets, and has fully emerged from CCAA protection.
The new ownership says it is committed to investing $300 million in the steelworks in order to expand its capacity and grade capability to meet the demand for advanced grades of steel.
SooToday will be updating this story as information is released this afternoon. Also watch for a full story on the implications of today's announcement.
The full release from Algoma Steel Inc. follows:
Algoma Steel Inc. Emerges a stronger, more sustainable, Canadian Steel Company – and we’re hiring.
Algoma Steel Inc. announced today it has successfully completed the purchase of substantially all of the assets of Essar Steel Algoma Inc. The business has emerged free from the protection of the Companies’ Creditors Arrangement Act (CCAA) as a stronger, more sustainable Canadian steel company.
Since 1901, Algoma Steel has been a reliable supplier of quality Canadian steel. Today, under new ownership and the direction of a professional board of directors, Algoma Steel has a significantly improved balance sheet, offering financial stability, secure pensions, and employment for over 2900 workers in Sault Ste. Marie. The Company has re-established itself in the market, with a promise to bring positive economic and social impacts locally, regionally and nationally.
“When we take a look around at the domestic and international steel markets, what we see is a lot of room for growth for Algoma Steel,” says Kalyan Ghosh, Chief Executive Officer of Algoma Steel. “We have a long and proud history in Canada, manufacturing 100 per cent of our products right here in Sault Ste. Marie. Today Algoma Steel is an independent and strong niche player, manufacturing a comprehensive mix of hot and cold rolled steel sheet and plate products not just for the Canadian markets, but also beyond.”
As Algoma Steel emerges it is resurrecting plans for the modernization of its facilities in Sault Ste. Marie. The new owners are committed to a CDN $300 million investment in the steelworks to expand capacity and grade capability, making Algoma Steel more efficient and globally competitive. This investment will position Algoma Steel to meet the growing demand for advanced grades of steel and to support growth in related industries like shipbuilding, auto manufacturing, energy, mining and defense.
The Company is also returning to financial stability with a strong, healthy balance sheet and substantially less debt. With the support and approval of the provincial government, Algoma Steel’s three defined benefit pension plans are secure and sustainable. The United Steelworkers Locals 2251 and 2724 have also played a large role in working towards a constructive resolution, helping to ensure the continued viability of Algoma Steel for future generations of steelworkers.
“Today, we’re hiring. We are coming out of this restructuring positioned for growth, thanks in great part to the determination and professionalism demonstrated by our employees in the face of uncertainty,” says Mr. Ghosh. “We are eternally thankful for the patience of our suppliers and the confidence expressed by our customers through this process. We have also enjoyed incredible support from the federal, provincial and municipal governments as Algoma Steel worked hard to get back to being a cornerstone manufacturer not only in Sault Ste. Marie, but also in Ontario and Canada.”