Essar Steel Algoma to Begin Shopping Itself Around
01/20/2016 - Canada’s Essar Steel Algoma is to begin searching for a buyer or major investor in its Sault Ste. Marie, Ont., integrated mill, reports the online publication SooToday.com.
“We expect to begin the sale and investment solicitation process and the search for a buyer by mid-February,” Essar Steel Algoma CEO Kalyan Ghosh wrote in a letter to suppliers, the publication said.
Essar Steel Algoma filed for creditor protection under Canada’s Companies’ Creditors Arrangement Act in November 2015 and is operating with US$200-million debtor-in-possession financing.
The financing arrangement expires on 1 September, and there is “substantial risk” that the company could exhaust its cash under the financing arrangement before it expires, the court-appointed monitor in the creditor protection case wrote in a recent report.
“This risk will be exacerbated if the North American steel market conditions continue to deteriorate,” the monitor wrote.
As part of its debtor-in-possession financing, the company is required to obtain court approval for a sale and investment solicitation process by 1 February.
Essar Steel Algoma filed for creditor protection under Canada’s Companies’ Creditors Arrangement Act in November 2015 and is operating with US$200-million debtor-in-possession financing.
The financing arrangement expires on 1 September, and there is “substantial risk” that the company could exhaust its cash under the financing arrangement before it expires, the court-appointed monitor in the creditor protection case wrote in a recent report.
“This risk will be exacerbated if the North American steel market conditions continue to deteriorate,” the monitor wrote.
As part of its debtor-in-possession financing, the company is required to obtain court approval for a sale and investment solicitation process by 1 February.
