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Essar Algoma Wins Another Month Of Creditor Protection
03/31/2017 - A Canadian judge has extended Essar Steel Algoma’s protection from creditors for another month at the integrated steelmaker attempts to hammer out a new labor agreement with the United Steelworkers.
The extension allows Essar Algoma to continue operating under the Companies’ Creditors Arrangement Act until 30 April. At the same time, the lenders behind Essar Algoma’s debtor-in-possession financing have agreed to extend the maturity date until 30 April.
Essar has been operating under creditor protection since November 2015 and is trying to work out sale to a consortium of its term lenders. A key to executing on the sale is reaching new labor contracts with the union.
Bargaining is proceeding under mediation among the company, the union and the buyers. A judge has barred those involved in the process from speaking publically about the discussions.
However, the court-appointed monitor in Essar Algoma’s creditor protection case said mediation began on 22 March, the online publication SooToday.com reports.
"The company has engaged with both Locals 2724 and 2251 in collective bargaining discussions. Where this process will lead remains highly uncertain at this time. Potential labor disruptions in this process, if any, would severely impact the company’s operations and cash flow over next several months,” the monitor wrote in an update to the court, according to SooToday.com.
Essar has been operating under creditor protection since November 2015 and is trying to work out sale to a consortium of its term lenders. A key to executing on the sale is reaching new labor contracts with the union.
Bargaining is proceeding under mediation among the company, the union and the buyers. A judge has barred those involved in the process from speaking publically about the discussions.
However, the court-appointed monitor in Essar Algoma’s creditor protection case said mediation began on 22 March, the online publication SooToday.com reports.
"The company has engaged with both Locals 2724 and 2251 in collective bargaining discussions. Where this process will lead remains highly uncertain at this time. Potential labor disruptions in this process, if any, would severely impact the company’s operations and cash flow over next several months,” the monitor wrote in an update to the court, according to SooToday.com.
