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Stelco Court Monitor Files 29th Report

05/13/2005 - Stelco Inc.’s court-appointed Monitor has filed its twenty-ninth Report regarding the company's Court-supervised restructuring. The Report provides updated information regarding Stelco’s first quarter results and strategic capital expenditures.

Stelco Inc.’s court-appointed Monitor has filed its twenty-ninth Report regarding the company's Court-supervised restructuring. The Report provides updated information regarding Stelco’s first quarter results and strategic capital expenditures.

Stelco says that the confidential, mediated discussions are designed to engage the skills of an expert to help all stakeholders move towards a common goal — to see Stelco emerge from court protection as soon as possible as a long-term viable business enterprise able to satisfy all of its obligations, including its future pension and benefit obligations.

The mediator would be expected to take charge of the process, assisted by the Court-appointed Monitor. "The Steelworkers agree that the Monitor needs to play a more central role in directing and supervising this restructuring," said Steelworkers' Local 8782 President Bill Ferguson. "We want an effective mediation process to start as soon as possible. We expect talks to start in days, not weeks as real discussions are long overdue.

"We further believe that the Monitor's report clearly recognizes that all stakeholders need to be in a position to present their own realistic and achievable restructuring ideas during the mediation,” commented Ferguson.

"Stelco's restructuring is now entering its critical stage,” commented Courtney Pratt, Stelco's President and CEO. “The procedures we're proposing will help all parties focus on results. Stakeholders have clearly stated their positions in public. Now it's time to conduct the serious and sincere discussions that have to succeed if we are to achieve a positive outcome.

“As we've said before, no stakeholder group can get everything it wants,” continued Pratt. “Our goal is to find a middle ground that all groups can support with the common objective of seeing Stelco emerge as a successful competitor — one that is able to compete with the very best steel producers in North America. We already have some of the critical building blocks in place, including a dedicated, highly skilled and committed workforce.”

The Report notes that the capital expenditure program, a portion of which is currently underway, will take a further 18 to 24 months to implement and Stelco's estimated cost is between $360 and $467 million. In addition, Stelco is continuing its Phase II upgrade at the Lake Erie Hot Strip Mill and has commenced two mini-cogeneration projects, one at Lake Erie and one at Hamilton.

The Monitor also provides an update on the company's restructuring plan outline, noting that Stelco has prepared its plan outline following discussions with various stakeholders and their advisors. The Monitor also reports that the company will present the plan outline and supporting information immediately to stakeholders on a confidential basis. The Report notes that stakeholders views vary widely with respect to the company’s restructuring alternatives.

As detailed in the Report, the company's view is that a Court-supervised mediation process would be an efficient and effective method of assisting Stelco and its stakeholders in attempting to build a consensus around which a restructuring plan could be formulated. The Report states that the Monitor agrees with this view, and notes that several stakeholders have indicated their support for the concept of a mediation to the Monitor.

The Monitor notes that Stelco, with the Monitor's assistance, intends to develop terms of a mediation process in consultation with its stakeholders. The Report adds that Stelco and various stakeholders have expressed their views to the Monitor on how such a mediation process could be structured. The Monitor has also provided a summary of its own views regarding the mediation process; key elements in such a process would include appointment of an acceptable mediator and determination of the nature, format and duration of the process itself.

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.