Stelco signals intent to take steelmaking company public
Stelco has filed initial paperwork to take the steelmaking company public, nearly three months after emerging from bankruptcy protection.
In the filing, the company highlights what it believes to be its strengths: technologically advanced operations, low cost of doing business, strategic location and room to grow at both the Lake Erie and Hamilton plants.
The Hamilton-based company said Wednesday it plans to use capital raised in the offering to fund:
- Capital improvements to increase production capabilities.
- Payments toward pensions and post-retirement benefits.
- Other corporate purposes.
"We believe we own the newest and one of the most technologically advanced integrated steelmaking facilities in North
America," Stelco said in its preliminary paperwork.
And it believes it is "one of the lowest cost steel producers in North America," according to a prospectus included in the preliminary offering paperwork. Part of that, it acknowledges, came through the negotiations in the Companies' Creditors Arrangement Act, like the decision to remove the legacy liability of the pension fund from the balance sheet of the deal.
"Additionally, through the CCAA process, we have significantly reduced our financial costs, including interest expense and costs associated with legacy liabilities," the company said.
The company notes, however, that it "is committed to a cooperative and productive relationship with the company's unions."
The company said it sees "excess capacity" at both the Lake Erie and Hamilton plants and hopes to invest to increase production.
The company said it filed preliminary paperwork in all Canadian provinces and territories with the intent of selling the shares, which would be held by a parent company called Stelco Holdings, Inc.
News welcomed by provincial ministers
Provincial ministers of finance and economic development issued a joint statement welcoming the news.
"We believe that this development underscores the confidence that the new owners have in Stelco's operations and its workers," the statement from Min. Charles Sousa and Min. Brad Duguid reads.
"The stated intentions of the owners to maintain their involvement and commit to new capital investments in the company's operations is particularly welcome," they continued.
'Iconic brand with a rich history in Hamilton'
In June, an Ontario judge approved the sale of Stelco to Bedrock Industries, which was completed on June 30.
David Cheney, Bedrock managing partner, told Hamilton and Burlington business leaders the company is a "privately funded, industrial investor" with $500 million already committed and access to $2 billion for other deals.
"This is an iconic brand with a rich history in Hamilton and the province of Ontario and we're going to restore that," he said of Stelco.
kelly.bennett@cbc.ca
