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Local businesses owed millions in Essar restructuring question future

Contractors complain their debt has been left out of the equation as Essar Steel Algoma seeks a new owner
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20160603 Essar Steel Algoma KA 05
FILE PHOTO: Essar Steel Algoma. Kenneth Armstrong/SooToday

NEWS RELEASE

SAULT STE. MARIE CONSTRUCTION ASSOCIATION

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Local creditors suffer through Essar CCAA proceedings

“Many local unsecured creditors appear to have been disregarded by those involved in the CCAA process within Essar Steel Algoma," states Sault Ste. Marie Construction Association (SSMCA) Executive Director Adam Pinder.

“Regardless of who becomes the new owner of our local steel mill, the term lenders, Ontario Steel Investment, or any others, there has been no indication of money to be paid to our members who are owed millions of dollars. This money is for the work these local businesses have already performed and paid for, prior to the November filing to CCAA. This issue has a negative impact on all of us in Sault Ste. Marie.”

These businesses employ local people, buy from local suppliers, and purchase their vehicles and equipment from local vendors.

As a result, spending in the construction industry is one of the best methods to stimulate the local economy. Unfortunately, the exact opposite also stands true.

That is, losses in the construction industry cause significant economic concerns.

Many SSMCA members are questioning what the future holds for their local businesses.

Pinder states, “Our members have completed their ‘claims period’ paperwork and have submitted it prior to the February 26 deadline. They have received no information to date regarding this paperwork. At this point, their only course of action is to monitor the court filings and to read media reports. As one can imagine, this creates a lot of anxiety for everyone involved.”

Sault Ste. Marie needs a steel mill that is productive and profitable and that supports our community for the long term.

Pinder believes that the city’s course of direction for future generations is at stake. “The health of the steel mill’s pension plans is important, but the future of our community hinges on an outcome to this CCAA process that is in the best interest of all stakeholders.”

In a single organization, the Sault Ste. Marie Construction Association brings together general contractors, trade contractors, manufacturers and suppliers of construction materials and equipment, as well as other firms associated with the construction industry.

For more information, please visit their website www.ssmca.com

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