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U. S. Steel Canada May Be Split From American Parent
10/08/2015 - U. S. Steel Canada Inc. (USSC) may once again become an independent business, if an Ontario court approves an agreement on the future of the former Stelco operation.
The agreement comes as corporate parent United States Steel Corporation and stakeholders failed to come to terms on a restructuring plan for company, which has been under creditor protection for the past year.
The plan to split USSC from U. S. Steel was laid out during a hearing 7 October 2015 in the Ontario Superior Court of Justice.
As part of the plan, U. S. Steel would continue to provide administrative services to USSC for 24 months, reported The Globe and Mail newspaper. U. S. Steel, meanwhile, would retain automotive steel supply contracts, but would tell automakers that they can source steel from USSC’s Lake Erie works.
According to The Hamilton Spectator, the most contentious part of the plan involves freeing the company of pension obligations and retiree benefit costs, municipal taxes and other liabilities.
The attorneys representing retirees and United Steelworkers members argued there had to be other ways to cut costs. However, USSC attorney Paul Steep told the court during the hearing that investors are uninterested in supporting a company that has liabilities from a previous owner, reported The Spectator.
U. S. Steel bought USSC from Stelco in 2007.
As The Mail reported, the move seen was largely a defensive tactic to keep it out of the hands of Russian’s OAO Severstal, which appeared intent at the time on becoming a major North American steel producer.
The plan to split USSC from U. S. Steel was laid out during a hearing 7 October 2015 in the Ontario Superior Court of Justice.
As part of the plan, U. S. Steel would continue to provide administrative services to USSC for 24 months, reported The Globe and Mail newspaper. U. S. Steel, meanwhile, would retain automotive steel supply contracts, but would tell automakers that they can source steel from USSC’s Lake Erie works.
According to The Hamilton Spectator, the most contentious part of the plan involves freeing the company of pension obligations and retiree benefit costs, municipal taxes and other liabilities.
The attorneys representing retirees and United Steelworkers members argued there had to be other ways to cut costs. However, USSC attorney Paul Steep told the court during the hearing that investors are uninterested in supporting a company that has liabilities from a previous owner, reported The Spectator.
U. S. Steel bought USSC from Stelco in 2007.
As The Mail reported, the move seen was largely a defensive tactic to keep it out of the hands of Russian’s OAO Severstal, which appeared intent at the time on becoming a major North American steel producer.
