Steelworkers Union Rebuffs Would-Be Acquirer of Essar Algoma, Backs Competing Offer
07/12/2016 - The United Steelworkers union said it will not support Essar Steel Algoma’s tentative sale to a private equity firm and instead is pushing for an alternate deal, one with the steelmaker’s former owner.
That deal is with a new entity called Ontario Steel Investments Ltd., a group created by Essar Global to acquire Essar Algoma and U. S. Steel Canada, reports the online publication SooToday.
Essar Global is proposing to buy back Essar Algoma, which it had put into creditor protection last year, for CA$903 million. A previous Essar bid on Essar Algoma was rejected on grounds that the company didn’t have the financial means to complete a deal.
A separate bid it had made on U. S. Steel Canada also was rejected for the same reason.
But the union says it wants to deal with Essar Global, and not KPS Capital Partners, which has pending agreement to acquire the operation. The union, however, has the power the quash the KPS deal because it is conditional on winning a new labor agreement. And the union said one is not likely to come about, reports The (Toronto) Globe and Mail.
“I see no reasonable prospect of the USW reaching an agreement with the hedge fund bidder [KPS] that the USW could recommend to its members,” Tony DePaulo, an assistant to USW District 6 director Marty Warren, said in a court filing, the newspaper said.
Essar Global is proposing to buy back Essar Algoma, which it had put into creditor protection last year, for CA$903 million. A previous Essar bid on Essar Algoma was rejected on grounds that the company didn’t have the financial means to complete a deal.
A separate bid it had made on U. S. Steel Canada also was rejected for the same reason.
But the union says it wants to deal with Essar Global, and not KPS Capital Partners, which has pending agreement to acquire the operation. The union, however, has the power the quash the KPS deal because it is conditional on winning a new labor agreement. And the union said one is not likely to come about, reports The (Toronto) Globe and Mail.
“I see no reasonable prospect of the USW reaching an agreement with the hedge fund bidder [KPS] that the USW could recommend to its members,” Tony DePaulo, an assistant to USW District 6 director Marty Warren, said in a court filing, the newspaper said.
