Report: Investment Firm Hopes to Merge the former Stelco, Essar Steel Algoma
06/20/2016 - A New York-based private equity firm has plans to acquire two ailing Canadian steelmakers and merge the businesses, reports The Hamilton Spectator newspaper.
According to The Spectator, KPS Capital Partners wants to merge Essar Steel Algoma and U. S. Steel Canada (USSC), both of which are operating under creditor protection and are on the sales block.
"Their intention is to combine the companies and everything that is running now would continue to run," an unidentified source told the newspaper. KPS is reportedly one of two strategic bidders for USSC, but was the only one to have submitted an offer following a two-stage bidding process for Essar Algoma, the newspaper said.
Essar has accepted that bid, announcing on Friday that it would seek approval for the deal with KPS and a consortium of lenders that were in place prior to its Companies’ Creditors Arrangement Act filing.
Essar Algoma didn’t disclose a purchase price.
It hopes to finalize the sale by the end of August. However, it’s conditional on the new ownership securing an agreement with the United Steelworkers union, which is, at present, displeased with how events have unfolded so far, reports the online SooToday.com.
Mike Da Prat, president of Steelworkers Local 2251, told the publication that the union is supposed to have a seat at the table, has been excluded from discussions.
"We’re totally dissatisfied with the process," Da Prat said. "We were supposed to be one of the consultation parties. We aren't being consulted at all."
The current agreement with the Steelworkers expires 31 July, according to the publication.
"Their intention is to combine the companies and everything that is running now would continue to run," an unidentified source told the newspaper. KPS is reportedly one of two strategic bidders for USSC, but was the only one to have submitted an offer following a two-stage bidding process for Essar Algoma, the newspaper said.
Essar has accepted that bid, announcing on Friday that it would seek approval for the deal with KPS and a consortium of lenders that were in place prior to its Companies’ Creditors Arrangement Act filing.
Essar Algoma didn’t disclose a purchase price.
It hopes to finalize the sale by the end of August. However, it’s conditional on the new ownership securing an agreement with the United Steelworkers union, which is, at present, displeased with how events have unfolded so far, reports the online SooToday.com.
Mike Da Prat, president of Steelworkers Local 2251, told the publication that the union is supposed to have a seat at the table, has been excluded from discussions.
"We’re totally dissatisfied with the process," Da Prat said. "We were supposed to be one of the consultation parties. We aren't being consulted at all."
The current agreement with the Steelworkers expires 31 July, according to the publication.
