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Report: USSC Rejects Essar Global Offer, Two Remain in the Running
06/28/2016 - Essar Global, which last month was disqualified to bid on Canada’s Essar Steel Algoma, reportedly has been dropped as a U.S. Steel Canada suitor as well, according to The Hamilton Spectator newspaper.
According to The Spectator, Essar Global’s USSC bid was rejected for the same reason as its Essar Algoma bid – concerns that it lacks the financial means to complete a deal.
Essar Algoma and USSC are up for sale as the steelmakers attempt to reorganize under creditor protection. Of the two, Essar Algoma apparently is further along in the process, announcing earlier this month that it had reached a conditional sale agreement with a New York-based private equity firm, KPS Capital Partners LP.
KPS also is bidding on USSC, and, if successful, intends to merge the two steelmakers. Essar Global also had plans to do the same thing, according to the United Steelworkers union, which issued a statement in disapproval of Essar Global’s rejection.
According to the union, KPS is “not prepared to protect jobs, pensions and retiree benefits.”
"We don't need a hedge fund that intends to make huge profits at the expense of workers and pensioners. We have to ensure this restructuring benefits the long-term interests of workers, pensioners and our communities," Gary Howe, president of United Steelworkers Local 1005 in Hamilton, Ontario, said in a statement.
The Spectator said that with Essar Global out of the running, two bids remain: one from KPS and the other from investment firm Bedrock Industries LP, also of New York.
Essar Algoma and USSC are up for sale as the steelmakers attempt to reorganize under creditor protection. Of the two, Essar Algoma apparently is further along in the process, announcing earlier this month that it had reached a conditional sale agreement with a New York-based private equity firm, KPS Capital Partners LP.
KPS also is bidding on USSC, and, if successful, intends to merge the two steelmakers. Essar Global also had plans to do the same thing, according to the United Steelworkers union, which issued a statement in disapproval of Essar Global’s rejection.
According to the union, KPS is “not prepared to protect jobs, pensions and retiree benefits.”
"We don't need a hedge fund that intends to make huge profits at the expense of workers and pensioners. We have to ensure this restructuring benefits the long-term interests of workers, pensioners and our communities," Gary Howe, president of United Steelworkers Local 1005 in Hamilton, Ontario, said in a statement.
The Spectator said that with Essar Global out of the running, two bids remain: one from KPS and the other from investment firm Bedrock Industries LP, also of New York.
