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Stelco Issues Restructuring Update

03/28/2006 -  

March 28, 2006 — Stelco Inc. issued an update regarding finalization and approval of principal documents required for the implementation of its restructuring plan, expected to occur on March 31, 2006.

Stelco had previously announced the proposed amendment of its restructuring plan to change, among other things, certain terms of the New Secured Floating Rate Notes (FRNs) to be issued under the plan. The company indicated at that time that the proposed amendments had the consent or support of the Court-appointed Monitor, Tricap Management Limited and the Province of Ontario. At the time, Stelco was awaiting confirmation from the other equity sponsors and indication from the Senior Bondholder Steering Committee that the company could proceed with the proposed amendments.

In compliance with the terms of its restructuring plan, Stelco has posted certain principal documents to a dedicated website area.

Posted documents include

  • New Platform Trust Indenture and Supplemental Indenture;
  • New Inter-creditor Agreement and the Province Inter-creditor Agreement;
  • The New Province Note Loan Agreement;
  • The New Warrant Indenture; and
  • The Pension Agreement with the Province of Ontario.

The documents have been posted under a separate heading ("CCAA Plan Documents") at www.mccarthy.ca/en/ccaa.

The posted documents are also accessible through a link available on Stelco’s website.

Those confirmations and indications have now been received, which means that the company will now proceed to seek an Order of the Superior Court of Justice (Ontario) regarding U.S. securities law requirements and the issuance of the amended FRNs. The motion is scheduled to be heard on Tuesday, March 28, 2006.

Stelco also announced that the terms of various material documents and agreements contemplated by the company's restructuring plan have now been finalized. These documents include the Company's ABL Loan Agreement, its Secured Revolving Term Loan Agreement, the Secured Floating Rate Note Trust Indenture under which the Company will issue secured notes, the Province Loan Agreement and Pension Agreement, the Intercreditor Agreement, the Province Intercreditor Agreement, and the Warrant Indenture.

Stelco also confirmed that is on course for a plan implementation date of March 31, 2006.

Stelco is one of Canada's longest-established steel companies. It is currently in the final stages of a Court-supervised restructuring, a process that is designed to establish the company as a viable and competitive producer for the long term. The new Stelco will be focused on its two Ontario-based integrated steel businesses located in Hamilton and in Nanticoke, producing high quality value-added hot rolled, cold rolled, coated sheet and bar products.