Essar Steel Algoma to Offer Senior Secured Notes due 2015
12/01/2009 - Essar Steel Algoma is proposing to offer US$325 million aggregate principal amount of senior secured notes due 2015.
Essar Steel Algoma Inc. is proposing to offer US$325 million aggregate principal amount of senior secured notes due 2015.
The Notes will be guaranteed on a senior unsecured basis by the company's parent company, Algoma Holdings B.V., and on a senior secured basis by its existing and future subsidiaries, other than immaterial subsidiaries. They will be secured by a senior lien on substantially all of the assets (other than accounts receivable, letter of credit rights, inventory, deposit accounts, securities accounts, instruments and chattel paper, general intangibles, records related to any of the foregoing, proceeds and products of the foregoing and certain assets related thereto and specified excluded assets, including pledges of capital stock and intercompany notes) owned by the company and the guarantors from time to time, and by a junior lien on accounts receivable, letter of credit rights, inventory, deposit accounts, securities accounts, instruments and chattel paper, general intangibles, records related to any of the foregoing, proceeds and products of the foregoing and certain assets related to that owned by the company and the guarantors from time to time.
The company said it intends to use net proceeds from the sale of the Notes to repay all amounts outstanding under its existing senior secured term loan facility.
The Notes have not been and will not be registered under the United States Securities Act of 1933, as amended, and may not be offered or sold in the United States without registration under the Securities Act or pursuant to an applicable exemption from such registration. They will be offered in the United States only to qualified institutional buyers in reliance on Rule 144A under the Securities Act and outside the United States in reliance on Regulation S under the Securities Act.
The company notes there can be no assurances that the Notes offering will be completed as described here or at all.
Essar Steel Algoma Inc., a member of the Essar Group, is based in Sault Ste. Marie, Ont. As a fully integrated steel producer, the company derives its revenues primarily from the manufacture and sale of hot and cold rolled steel products including sheet and plate.
