Stelco’s Board of Directors has decided to pursue new refinancing alternatives for the integrated steel business as part of its capital raising process.
None of the proposals it has received satisfy its requirements for being designated as a prevailing offer under the order of the Ontario Superior Court of Justice made in October, 2004 as subsequently amended.
The Company, together with its advisors, have spent the last two and half weeks examining in detail bids submitted by the bid submission date of February 14, 2005. In reviewing the bids, the Corporation and its Board of Directors have been guided by the principle that the overall objective is to pursue an outcome that will strengthen the Corporation on its emergence from protection under the Companies’ Creditors Arrangement Act.
To permit Stelco to emerge from creditor protection as a competitive participant in the industry, the Company expects to return to court in the near future to outline its plans for raising capital. The Company believes that further capital raising activity will require it to directly pursue financing options working closely with various sources of capital to develop an alternative that will substantially strengthen the Corporation.
Courtney Pratt, Chief Executive Officer, commented: “Our process unfortunately did not turn up any acceptable proposals from strategic or financial bidders. We will now be working with our financial advisors to aggressively attract new capital. We will also be working closely with the province to understand its requirements as a result of its decision to change the solvency deficiency pension plan funding rules for Stelco post-emergence from CCAA and we will be continuing to consult with our other stakeholders”.
The Board of Directors remains highly focused on the task of emerging from Court protection with an appropriate eye to the broad range of stakeholder interests involved. The Company believes, after consultation with its advisors, that capital markets based alternatives are available that will allow the Board to find a solution that will strengthen the Corporation. In accordance with the capital raising process approved by the Ontario Superior Court of Justice, the Company is proceeding with the sale of several of its subsidiary businesses.
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