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Stelco Court Monitor Files 41st Report

12/08/2005 - Stelco Inc.’s court-appointed Monitor has filed its forty-first report regarding the company's Court-supervised restructuring.

Stelco Inc.’s court-appointed Monitor has filed its forty-first report regarding the company's Court-supervised restructuring.

Stelco Board Rejects
Bondholder Proposal

Stelco Inc.’s Board of Directors has reviewed and considered the proposal submitted by the Informal Committee of Stelco Senior Debentureholders, which was announced on December 5, 2005.

The Board has concluded that the proposal would not result in sufficient stakeholder support to ensure an achievable plan that would lead to an effective restructuring of the company. The Board of Directors urged stakeholder groups to continue their current and ongoing negotiations with the goal of achieving and coming forward with a consensual plan.

The Board advised that, in accordance with the direction of the Superior Court of Justice (Ontario), a plan or an amended plan will be presented and put to a vote when the previously-adjourned meetings of affected creditors resume on Friday, December 9, 2005.

The Report provides updated information regarding the signing of a definitive agreement for the sale of 100% of the shares of Norambar Inc., Stelfil Ltée and Stelwire Ltd. and related assets to Mittal Canada Inc. In its report, the Monitor reviews the history of these non-core assets, the nature of their businesses, the sale process that was followed and terms of the agreement.

The Report also notes that Stelco has advised the Monitor that it will seek an Order on Monday, December 12, 2005 to approve the sale and to seal certain terms in the agreement until confirmation that the transaction has closed or until further order of the Court.

The Monitor’s view is that Stelco and its advisors adequately canvassed the market for prospective purchasers, and that the purchase price is fair and commercially reasonable under the circumstances. The Monitor also indicates that a sealing order is appropriate and reasonable, as it protects certain commercially sensitive information from being disclosed until the transaction is closed or until further order of the Court. Based on these considerations, the Monitor recommends that the sale be approved and that a sealing order be granted until confirmation that the transaction has closed or until further order of the Court.

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.