Sale of steelmaker yet to be finalized (update)

10:59 p.m. update:

Algoma issued the following statement tonight regarding the status of a port agreement:

Essar Steel Algoma Inc. (doing business as Algoma) announced today that an agreement in principle has been reached regarding the Port.

Justice Hainey stated the Asset Purchase Agreement should be approved and commended the parties on reaching an Agreement in principle, noting that the Sale Transaction will be in the best interests of Algoma and its stakeholders.

Algoma will seek an Approval and Vesting Order once the agreement between GIP and the Consenting Creditors regarding the Port has been documented.

Kalyan Ghosh, CEO of Algoma remarked on today’s developments: “Resolution of the port matter was the final hurdle standing between us and a successful sale transaction. This agreement will position Algoma securely as an advanced steel manufacturer with the liquidity and wherewithal to make the investments necessary to secure the next generation of steel makers.”

4:58 p.m. original story:

Mayor Christian Provenzano says that the impending sale of Algoma isn’t that far away, barring a couple of outstanding issues.

Today, Superior Court Justice Glenn Hainey endorsed the steps being taken in order to formalize and finalize a deal that would see the Sault Ste. Marie steelmaker sold to a numbered company - listed as 1076318 B.C. Ltd. - by the end of September. 

“It wasn’t approved by the court, but the court did acknowledge and recognize that the asset purchase agreement and the sale transaction was in the best interest of Algoma and Algoma’s stakeholders and should be approved,” Provenzano told SooToday.

Provenzano says that right before today’s court hearing Algoma Ports and its lenders, GIP, reached a deal with the company.

According to Provenzano, there are still a couple of hurdles to clear: the port lease, and the financing of the port lease, and gaining support from the federal and provincial governments.

“They’re going to go away, formalize the agreements between port and the company, come back and then seek approval.”

A target date of Sept. 30 has been set for the closing of the transaction.

“That’s the goal on the company’s radar, and I think it’s certainly something that [local unions] 2251 and 2724 want to see, and something that the city also wants to see, and now I think it’s only conditional upon the support of the federal and provincial governments.”

The company and the port company will now work on formalizing an agreement before taking it back to court for approval.

“We’re not far away, we just need now to ensure that our provincial and federal governments are supporting the process, and if that’s the case, we should be out of this process soon.”

Superior Court Justice Glenn Hainey was initially asked to approve the sale of nearly all assets of Essar Steel Algoma Inc. to a British Columbia-registered numbered company associated with Essar's term lenders and consenting senior secured noteholders.

- with files from David Helwig