Stelco Inc. commented on reasons issued by the Superior Court of Justice (Ontario) regarding an application brought by Georgian Windpower Corp. (GWC) and heard by the Court on June 27, 2005.

In its application, GWC had asked that the Court-ordered stay of legal proceedings against Stelco during the CCAA period be lifted so that GWC could bring a legal action against the company. The statement of claim concerned a Memorandum of Understanding regarding the general principles with respect to the development of a wind energy project at Stelco's Lake Erie property and a related Agreement to Enter into a Land Lease Agreement concerning establishment of a land lease easement agreement.

Stelco opposed allowing the action to proceed. It submitted that the memorandum of understanding and the land lease agreement did not constitute binding contracts and contained provisions enabling the company to terminate the agreements.

In the reasons that were issued following the hearing, the Court ordered that any part of the claim that was based on the memorandum of understanding should be removed from the statement of claim and dismissed. With respect to that portion of the claim that relied on the agreement to enter into a land lease agreement, the Court held that land lease portion of the claim could proceed and that the stay would be lifted to allow it to proceed — but that no step could be taken to press the action before termination of the CCAA proceedings absent another Court order.

Stelco noted that the memorandum of understanding contained four of the five aspects of the proposed business relationship between Stelco and GWC that were at issue. Stelco believes it has a good defense to the land lease portion of the claim.

Stelco Inc. is a large, diversified steel producer involved in major segments of the steel industry through its integrated steel business, minimills, and manufactured products businesses.