Thursday, June 11, 2009
Canada is launching a full court press in the U.S. Congress today against the Buy American provisions in the federal stimulus spending law.
The action is part of the ongoing campaign by our federal government to get the U.S. government to drop Buy America provisions that force U.S. municipalities and states to use American steel and manufacturing exclusively for projects paid by U.S. taxpayers.
The provisions are believed not to contravene international trade agreements because states and municipalities are sub-national jurisdictions and not subject to trade deals.
Sounds pretty weasily, doesn't it? Sure we have these NAFTA provisions, and they apply to you, but they don't apply to our states and municipalities. One wonders how Free Trade can have so many different meanings to different people.
U.S. Steel bought Stelco and made record profits last year. Then the Americans ruined the world economy and U.S. Steel shut down the Hamilton and Lake Erie works, moved all our orders -- including Canadian orders -- to Pittsburgh, Alabama and Indiana
[...] what follows is some discussion of how US Steel got around NAFTA rules. But the sting is in the tail
What really hurts is our Canadian-born USWA president Leo Gerard not only backs this "Buy American" approach, but used union dues to lobby Congress to get the protectionist plan passed at the expense of Canadian workers.
If it were not for Gerard, we might be actually working, making steel at Stelco, rather than hoping our EI won't run out before we start up again.
I don't know about all of it, but at least part of it is true. Leo Gerard was born and raised in a mining family in Sudbury.
Saturday, June 06, 2009
From The Hamilton Spectator TheSpec.com
A single guideline in the Investment Canada Act is “probably the crux” of the dispute between U.S. Steel and the Canadian government, says Industry Minister Tony Clement.
The guideline excuses foreign buyers who are unable to fulfil their commitments under the act due to “factors beyond the control of the investor.”
The question is whether the current economic meltdown qualifies as such a factor in U.S. Steel’s shutdown of the former Stelco.
Clement sent a demand letter to U.S. Steel earlier this month after determining that the temporary closure of its plants in Hamilton and Nanticoke violates promises made under the act. He is now reviewing a response from the Pittsburgh steelmaker that is “about 87 pages in total.”
But he was tight-lipped about the contents of that document today.
“You’ll be hearing from us very shortly,” he said.
And then, again, the sounds of silence.
Wednesday, May 06, 2009
From the Canadian Press, via Yahoo Finance News
The Canadian government is warning U.S. Steel it must live up to production commitments at the former Stelco Inc. plants in Ontario.
Industry Minister Tony Clement said he has sent a 'demand letter' to the U.S. giant that it's temporary shutdown at plants in Hamilton and Nanticoke, Ont., may be in violation of commitments it made when it bought the Canadian steel producer in 2007.
In Clement's announcement, the minister said the demand letter is the first step in the enforcement process under the Investment Canada Act.
Monday, August 25, 2008
U. S. Steel Canada is apologetic about its blast furnace belching smoke and coke dust into the air over Hamilton four times in little more than a month.
Spokesman Trevor Harris says the multinational steelmaker that took over Stelco last fall is calling on in-house experts around the world to help local staff and the Ontario Environment Ministry determine what went wrong and how to stop it happening.
'One of the great benefits of being U. S. Steel Canada (instead of stand-alone Stelco) is that we now have access to expertise from literally around the world to try to rectify the problem.'
Wednesday, October 31, 2007
U. S. Steel Canada Inc., formerly Stelco Inc., today announced the completion of the arrangement involving the acquisition by a subsidiary of United States Steel Corporation of all of Stelco Inc.'s outstanding common shares.
Monday, August 27, 2007
From the Stelco web site:
PITTSBURGH and HAMILTON, ON, Aug. 26, 2007 -- United States Steel Corporation and Stelco Inc., announced today that they have entered into a definitive agreement pursuant to which U. S. Steel will acquire Stelco for $38.50 (Canadian) in cash per share.
Wednesday, July 11, 2007
Late last week, this hit the news, but I didn't get around to reporting it until this week.
Ukraine's Metinvest confirmed on Friday that it is considering acquiring, or investing in, steelmaker Stelco Inc., but said it has made no firm decision.
Metinvest's statement followed a report in the Globe and Mail newspaper, citing unnamed sources, that said officials from Metinvest have toured Stelco facilities in the weeks since the steel company put itself up for sale last month.
Stelco is the only big steelmaker in Canada that is still Canadian-owned.
The Globe's Report on Business, in addition to reporting more or less the same content, had this interesting few paragraphs part way down their article:
Consolidation has swept aside Stelco's neighbour Dofasco Inc., Essar's deal for Algoma closed last month, and shareholders will vote on a $7.7-billion (U.S.) buyout of Ipsco Inc. by Svenskt Steel AB later this month.
Those transactions have helped reduce the number of mid-sized, relatively cheap North American steel assets to three.
They are Stelco, AK Steel Holding Corp. of Middletown, Ohio, and a mill near Baltimore, Md., that Mittal Arcelor, the world's largest steel maker, has been ordered to sell by the U.S. government.
Of course, consolidation of steel suppliers means lack of competition on the supply side, and makes it very hard for small metal stampers to have a say in their own input costs.
Saturday, June 02, 2007
Stelco, Canada’s last domestically owned steel maker, said Friday that it was in early talks that might lead to its sale.
While foreign buyers have gradually taken control of Canada’s other steel companies, including Dofasco, Stelco remains independent, largely because it is unprofitable and some of its plants are outdated. Stelco emerged from a prolonged period of bankruptcy restructuring in March 2006 burdened with debt and pension obligations.
Stelco shares skyrocket as steel maker seeks buyer
The Toronto Star
Stelco Inc. shares shot up yesterday after the money-losing steel giant revealed it is looking at a possible sale or partnership after almost a century as a Canadian industrial icon.
The company's shares soared $5.03 – or more than 18 per cent – to $31.93 on heavy trading volume on the Toronto Stock Exchange, as investors bet on potential suitors pushing up the company's value.
Stelco sale would be end of era for Canadian steel
Reuters via Yahoo
The Canadian steel industry, which has been thinned by a slew of foreign takeovers, could lose its last big domestic-owned steelmaker after Stelco Inc. put itself on the auction block on Friday.
But Stelco's confirmation that it has put itself up for sale did not come as a surprise given a rapidly consolidating global steel industry that has seen big foreign companies feast on Canadian steelmakers.
"Stelco, in a Canadian context, was the last man on the block," said Randy Cousins, an analyst at BMO Capital Markets. "So is it a surprise that we are seeing this announcement? Not at all. It's just a continuation of what's been going on."
Here is the official announcement, off the Stelco website.
HAMILTON, ON, Jun 1, 2007 (Canada NewsWire via COMTEX News Network) -- Stelco Inc. (TSX: STE) today confirmed that it is reviewing strategic options for the company in light of the ongoing consolidation in the steel industry. The company has appointed a special committee of directors and CIBC World Markets and UBS to assist it in this review. The company intends to evaluate a broad range of possible alternatives including mergers, strategic partnerships, acquisitions or a sale of all or part of the company.
Discussions regarding these alternatives with third parties are at a very preliminary stage and there have been no discussions on the material terms of any transaction.
There's a lot more, but that's the gist of it.
Friday, January 05, 2007
Nice picture of Stelco at night
Wednesday, June 07, 2006
US buyers have accepted further transaction price increases. The driving force is a lack of supply. All domestic mills are operating an allocation policy for customers, with no extra tonnage to be had. Several are working below normal rates due to a variety of production/labour issues. Availability is even tighter because very few imports are being offered.
Canadian market conditions are very strong. Transaction values have moved up and the trend is likely to continue. Supply is constrained, with Stelco telling some buyers they will have no material until August. This is partly due to trying to build up stocks to protect major contract customers ahead of an anticipated strike on July 31. Inventories are low at most service centres and distributors' profit margins have improved. Importers have stepped up their offers for August/September arrivals by $C100 per tonne.
Remember, MEPS is a supply side reporter, so when they say market conditions are strong, that means good for the steel supplier.
Tuesday, March 14, 2006
The Company had announced on March 3, 2006 that its board of directors had authorized the filing of a delisting application. As disclosed on previous occasions, there is insufficient value in the Company under the approved restructuring plan to provide recovery for the current common shareholders. As a result, the existing common shares will be eliminated on plan implementation with no value being attributed to them.
Wednesday, February 01, 2006
Stelco Inc. today announced that it has received a Court Order facilitating the sale of the shares of Norambar Inc., Stelwire Ltd. ('Stelwire') and Stelfil LtĂ©e to Mittal Canada Inc. ('Mittal'). The Order was granted at a hearing held this morning, notwithstanding that Stelwire was still an applicant under Stelco's CCAA proceedings. As a result of this Order, the transaction closed today.
A definitive agreement in this matter was announced on November 23, 2005 with the stated expectation that the transaction would close early in 2006. The Court approved the sale on December 12, 2005.
Monday, January 23, 2006
Canada's steel hub of Hamilton, Ontario, has plenty of reasons to watch the billion-dollar takeover battle for steelmaker Dofasco Inc. Workers at Stelco Inc. hope it's a sign their employer, heading out of bankruptcy, will be next to draw buyer interest.
``It'd be a fresh start,'' said Harry Fitzpatrick, 53, a carpenter for 30 years at Stelco. He boarded a bus in Hamilton this week to attend the company's bankruptcy hearing at a Toronto court.
Stelco is ready to emerge from two years of bankruptcy protection in March, just as global steel producers such as Arcelor SA seek additional capacity to meet increasing demand from China and India. That puts it in a better position to be sold, says Peter Warrian, a senior fellow at the Munk Centre for International Studies at the University of Toronto.
Sunday, January 22, 2006
An Ontario court has approved Stelco's restructuring plan, paving the way for the Hamilton, Ontario-based steel producer to emerge from bankruptcy protection.
Wednesday, January 18, 2006
As the Stelco Turns
Stelco owners show Pratt the door:
After two tumultuous years running Stelco Inc., Courtney Pratt will soon step down as chief executive officer at the request of the company's new controlling shareholders.
'I've learned a whole lot,' Mr. Pratt said yesterday with a chuckle. 'Because this has, in many ways, been an absolutely unique situation.'
Few would argue with that. Mr. Pratt became Stelco's CEO on Jan. 1, 2004, with no experience in the steel industry beyond sitting on the company's board. Three weeks later, Mr. Pratt put Stelco, Canada's largest steel maker, into bankruptcy protection, citing a $1.25-billion pension shortfall and competitive pressures.
A guy named Bill Cara has written a number of blog articles about the Stelco situation. He claims the whole bankruptcy thing is a fraud to steal from the shareholders ... I don't know enough to evaluate his arguments.
January 05, 2005 Canadian Equities: Stelco at the Eleventh Hour
March 03, 2005 A great day for Stelco
March 31, 2005 Stelco Court Decision
April 11, 2005 Stelco report
May 11, 2005 Stelco joke continues
September 02, 2005 Where are the securities regulators in the Stelco fiasco?
October 25, 2005 A call for integrity and fairness
November 23, 2005 Stelco crooks can now be rounded up
It appears that the Marxist-Leninist Party of Canada agrees with him (and even supplied some of the information for his arguments). Take that for what it's worth. It all makes great reading.
Meanwhile, the Hamilton Spectator has been reporting that restructuring approval is expected by the end of this week.
Lawyers for the company and its new lenders reached agreement late last night to put new loans ahead of pension obligations in the event of a new restructuring. That cleared the way to finalize the agreements that will let the struggling steelmaker out of bankruptcy protection.
Justice James Farley is now expected to approve the restructuring plan by the end of the week.
Lenders, led by Tricap Management Limited, had been demanding extra security for their loans in the event Stelco buckles again in the steel industry's next down cycle.
Friday, December 16, 2005
The restructuring plan essentially wipes out the value of Stelco's current shares. The shareholder group alleges that the forecasts the plan is based on lowball the Hamilton-based steelmaker's value.
Navigant's report uses Stelco's valuation model, but substitutes steel price forecasts consultant received from Metal Bulletin Research. The report concludes that Stelco's shareholder equity is worth between $1.1 billion and $1.3 billion, which translates into between $10.76 and $12.71 a share.
In court documents prepared for Friday's hearing, Murray Pollitt, president of Pollitt & Co., alleged that Stelco's management and board actively undermined Stelco's shareholder equity through inaccurate information released to its stakeholders.
'It is my belief that Stelco was cynically using the (creditor protection) process to compromise the legitimate interests of its various stakeholders including its employees and the unions, its retired pensioners, its creditors and, most significantly, its equity holders,' Pollitt said.
In an affidavit, James May, a consultant with Metal Bulletin, said his base estimate for hot rolled steel coil in 2006 is $525 per ton. Stelco's forecast was $458 per ton.
Saturday, December 10, 2005
Stelco Inc. Investor Relations
Stelco Inc. announced early this evening that a third amended restructuring plan was approved by affected creditors at the previously-adjourned meeting that resumed today. Affected creditors of certain Stelco subsidiaries also voted to approve the plan at other meetings resumed this afternoon.
At the meeting of affected creditors of Stelco Inc., the plan was approved by 78.4% of those affected creditors who voted in person or by proxy, representing 87.7% of the total value of affected claims that were voted at the meeting.
Courtney Pratt, Stelco President and Chief Executive Officer, said, 'We truly appreciate the support shown by our creditors today. The approved plan is fair, reasonable and responsible. It balances the competing interests of our stakeholders. And it paves the way for Stelco to emerge from Court protection and to become a viable and competitive steel producer for the long term.
Monday, December 05, 2005
Stelco Inc. Investor Relations
Stelco Inc. announced early this morning that its Board of Directors has approved an amended restructuring plan for consideration by its creditors.
Courtney Pratt, Stelco President and Chief Executive Officer, said, 'The Board has approved an amended plan taking into account, among other things, the interests of the Company and fairness to our stakeholders. We believe the amended plan addresses those concerns in a fair, reasonable and responsible manner. While the amended plan contains certain new and positive features, including significant cash for our creditors, we are not in a position to say that it is supported by all stakeholders at this time.'
Thursday, November 24, 2005
Restructuring steelmaker Stelco Inc. said Wednesday it has signed a final agreement to sell three of its subsidiaries to Mittal Steel for an undisclosed price.
Mittal Canada Inc., a subsidiary of the world's biggest steelmaker, Mittal Steel Co. NV, is acquiring Stelwire in Ontario, Stelfil in Lachine, Que., and Norambar in Contrecoeur, Que.
Tuesday, November 22, 2005
Algoma Steel Inc. announced late Monday its board of directors has called a special meeting of shareholders to be held in Toronto on March 22, 2006.
The meeting had been sought by Paulson & Co. Inc. of New York, the holder of 19 per cent of Algoma's common shares, who is demanding a recapitalization that would enable the company to distribute at least $400 million in cash to its shareholders.
Paulson also wants Algoma shareholders to vote on a resolution that would replace a majority of Algoma's current directors with nominees of Paulson.
Earlier, the United Steelworkers union, which represents current and retired employees at Algoma, filed motions in Ontario Superior Court on Monday seeking to block Paulson's cash distribution plan.
The union said Algoma Steel records indicate that a capital investment of $50 million a year is required just to keep the operation running. In addition, Algoma Steel has significant unfunded pension and health-care benefit liabilities, it said.
"Paulson's proposed cash grab would leave the company financially vulnerable at a time when steel prices have begun to retreat from the record highs they reached in the past year," union spokesman Wayne Fraser said in a statement.
"Algoma's cash is vital to the company's future. Without it, the company will not be able to retire its high-interest debt or complete a planned blast furnace reline."
Also some coverage here: Bloomberg.com
and here Globe and Mail
which included this interesting tail paragraph
Algoma, which has dived into bankruptcy protection twice in the past 15 years, says it needs to hold on to some of its cash because steel prices and costs are uncertain right now. The steel maker recently reported a third-quarter profit of $30.8-million, down from $121.6-million a year earlier, when steel prices had hit a record high.
My previous articles about Algoma:
Algoma Steel Rejects big Shareholders
Algoma Steel drops out of bidding war for Stelco
Big Steel faces it's next Revolution
Algoma Steel earns $10.1M profit
and another blogger who liked our reporting ... The Stalward - Plundering Algoma Steel
By the way, here's the weather on Sunday in Algoma District, Sault St. Marie area. I tried to upload the picture from the weather article above, but it didn't work, not sure why.
Monday, November 21, 2005
Down the road from us about an hour and a half is Hamilton, home to two large steel companies Stelco and Dofasco and a bunch of subsidiaries. It's pretty much a steel town. As is Buffalo, about another hour south of Hamilton. When I was a kid growing up in Toronto, they taught us in school that Hamilton and Buffalo were large steel towns situated where they are because of access to the great lakes, to bring the coal and the iron ore in and the finished steel to market. Seems irrelevant these days, but I guess once a place gets set up as a steel town, it kinda sticks.
Dofasco pulled itself out of bankruptcy (eventually - it took some significant work). Stelco is trying to do the same. But this is like the Algoma story I did a while ago ... I'm not sure that the stock market is good for long term investment companies like steel and aluminum mills.
Basically, everyone is scrabbling over Stelco at the moment because steel prices are high. Everyone (the unions, the creditors, probably the board too) wants a piece of the current, fleeting prosperity. But it would be wiser to pay down debts with the money and put the house in order if Stelco is to survive beyond the current steel bubble (which is going to burst sooner or later, probably sooner). But shareholders, and even bond holders, don't seem to know (or even care) about the steel marketplace ...
National Post online
After nearly two years of bankruptcy protection for Stelco Inc.. the insolvent steelmaker's creditors are expected to vote on the company's restructuring plan Monday.
The Hamilton-based steelmaker is labouring to pull itself out from 22 months of bankruptcy protection.
After more than a year and a half of fighting with workers and creditors, it circulated a plan earlier this fall detailing how it intends to refinance and emerge as a new company.
On Tuesday, its creditors gathered at a Mississauga, Ont., conference centre to finally cast their ballot on Stelco's plan. But chief executive Courtney Pratt was forced to apologize as he told them the meeting was being cancelled.
The steelmaker's bondholders were going to vote the plan down, despite negotiations that stretched right up until the last minute.
Rather than allow that, Stelco decided to postpone the vote until 9 a.m. Nov. 21.
Update later on Monday ...
Stelco Inc. announced today that the meeting of its creditors to consider and vote upon a restructuring plan has been further adjourned until Wednesday, November 23, 2005. The Company indicated that the meetings of creditors of its subsidiaries will also be adjourned to the same date.
At the first of the meetings scheduled to take place today, the Company recommended to the Court-appointed Monitor that an adjournment was appropriate so that intensive negotiations among stakeholders can continue and so that a plan can be filed and circulated prior to a vote on Wednesday. The Monitor then exercised its discretion and allowed the adjournment.
Wednesday, November 02, 2005
The transaction is subject to a number of conditions, including the negotiation of a definitive agreement and the obtaining of Court approval. It is anticipated that, if all conditions are satisfied as planned, the sale will close early in 2006.
Monday, June 27, 2005
As the Stelco Turns
Well, OK, it's hard to separate that from the other smelly place just a little furthur down the road in Buffalo. They smell the same way and for the same reason - blast furnaces.
But for the last year or so, a court and media battle rivaling, in it's own way (considering it's "just" steel and not murder), O.J. Simpson and Michael Jackson has been going on here. I mean, how often do you hear of a bankrupcy court judge criticizing both parties and saying there seemed to be 'a complete lack of communication, co-operation and common sense by everyone? For that matter, how often does a bankrupcy court judge say anything worthy of media attention?
So a year ago, the judge appointed a mediator. He did some mediation, left, came back for some more. This week, he quit. The impasse at Stelco Inc. appears too thorny to resolve -- even for a former Ontario court judge hailed as a "genius" at mediation. He "threw up his hands in the mediation talks between the fractious Stelco stakeholders". Today the judge extended bankruptcy protection by a mere 10 days, ordering the stakeholders to "cool off until July 4 and then resume talks"
"We have been in this process 17 months; we don't need a cooling-off period," Steelworkers lawyer Ken Rosenberg argued in Farley's packed, stifling courtroom.
"We need to be put in a room and the door has to be locked."
The judge added that "the idea of a locked room is very appealing,"
What will happen next? Both sides are happy to tell their side of it to the media, stock holders and anyone else who has a web browser. Check out the Stelco Corporate media releases. Looks like one every couple of days. The steel workers are also at it.
But who can sort out all the conflicting claims? Not me. Nor, it seems, can the mediator. Or the judge.
Stay tuned for the next episode of ... as the steel turns.
Thursday, June 09, 2005
Now Stelco, just down the road from us in Hamilton, on the other hand, you hear from every other day getting into a fistfight with their union publicly and splatted across several web sites. In fact, the supervising judge for the bankrupcy had to discipline them both at one point, saying something to the effect that he doubted either one was really operating in good faith.
TORONTO, June 9 (Reuters) - Dofasco Inc. plans to acquire most of the remaining interest that it does not already own in Quebec Cartier Mining Company for C$306 million ($245 million), and may spin off the unit, Canada's second-biggest steelmaker said on Thursday.
"Given the rapid change in global iron ore markets and the pricing outlook, it will be prudent for Dofasco to hold equity in QCM at a level sufficient to hedge our iron ore purchases," Pether said in a statement.
QCM produces iron ore products in Quebec and operates an open pit mine, crusher/concentrator facility, pellet plant, deep-water harbor and a railway linking the mine to the harbor on Quebec's North Shore region.
The announcement conference call is happening even as we speak, and the stock has already risen 7% on the morning, so something good must be happening there!
[It's now 9PM EST and the stock rose a total of 10.6% on the day]
Tuesday, June 07, 2005
TORONTO (CP) - Canadian steel giants Stelco Inc., Algoma Steel Inc. and, to a lesser extent, Dofasco Inc. will all see their margins pressured through the rest of this year by rising input costs and steel prices that have fallen off cyclical peaks, according to a new report on the sector.
Dominion Bond Rating Service said the impact of rising iron ore and coal costs will be "most notable" at the three integrated steel producers through the remainder of 2005, given their exposure to those commodities.
Stelco and Algoma use significant amounts of coal in their blast furnaces during the steelmaking process. Dofasco is less sensitive to iron ore and coal price shifts given that they use more natural gas in their manufacturing processes.
The higher input costs come as steel prices have fallen from 2004 highs posted last fall.
But weaker industrial demand, increased exports from China and high inventory levels have contributed to a steady decline in benchmark U.S. flat-rolled steel prices, according to DBRS steel sector analyst Jarrett Bilous. Flat-rolled steel prices are now 35 per cent below August 2004 levels, reflecting a market correction, Bilous said.
Industry observers have said steel prices are now well below $540 US per ton, compared to $640 US per ton at the beginning of this year. Current prices will likely remain stable through the rest of this year, Bilous said.
Wednesday, June 01, 2005
Stelco Inc. announced today that, while it continues to expect solid performance in the second quarter of 2005 from a historical perspective, operating earnings in the quarter are now expected to be considerably below the level of the first quarter of 2005 largely due to lower spot market prices as well as higher energy costs and the flow through of higher cost inventory produced in the first quarter.
Friday, May 27, 2005
TORONTO - Stelco Inc. â€” a theoretically insolvent producer that posted record first-quarter profits in a hot steel market â€” now warns that prices are weakening, changing its financial outlook.
Despite its return to prosperity, Stelco has remained under court protection for nearly 16 months. A court-appointed monitor reported on Thursday that the Hamilton-based company is concerned about the price situation.
"Stelco believes that market conditions for Stelco and other steel producers reflect high inventory levels which need to be reduced to strengthen customer demand. Because of these changing market conditions, Stelco is in the process of updating its financial projections."
Over the past month, the price of hot rolled steel has fallen from about $575 (U.S.) a ton to less than $540, CP said.
Companies around the world rushed to expand steel production amid runaway demand from China as it became a global manufacturing power. Recently, however, prices of steel shares on U.S. and other markets have been hit by fear that the glory days are ending.
Separately, the Canadian Press reported that Ian Delaney, chairman of Sherritt International, has expressed "rapidly diminishing" interest in Stelco. Speaking to reporters after the resource company's annual meeting in Toronto, Delaney said Sherritt had no plans to revive its offer for a restructuring of Stelco but will watch "from a distance."
Tuesday, May 10, 2005
Stelco Inc. today reported net earnings of $49 million ($0.48 per common share) in the first quarter ended March 31, 2005. This record level of first quarter earnings for the Company is compared to a net loss of $37 million ($0.36 per common share) in the first quarter of 2004 and net earnings of $1 million ($0.01 per common share) in the fourth quarter of 2004.
Thursday, April 14, 2005
The Company noted that a Court-approved capital raising process, where third parties were invited to participate, was run earlier this year. Tricap was invited to and had an opportunity to participate in the process that took place between October 2004 and February 2005, but declined to so.
Stelco is now pursuing a Court-approved stand-alone process to raise capital that will allow it to emerge from CCAA protection. The Stelco-driven process will seek to address all stakeholders concerns, not just those of the USWA.
Hap Stephen, Stelco's Chief Restructuring Officer, said, "We all want to see Stelco emerge from its restructuring as successfully and as quickly as possible. That can only be done within an objective process that provides certainty, involves recognized stakeholders, and addresses their interests.
"A Court-approved capital raising process is already in place. All interested parties have had the opportunity to take any concerns about that process to the Court. The Company with the assistance of its advisors are implementing that process with the interests of all stakeholders in mind. We will discharge our responsibility, proceed with the Court-approved process and report to all stakeholders accordingly."
TORONTO (Reuters) - The United Steelworkers of America said on Wednesday it has signed a letter of intent with Brascan Corp. to offer a plan to recapitalize Stelco Inc. and bring Canada's biggest steelmaker out of bankruptcy protection.
The Steelworkers said the C$1.35 billion ($1 billion) financing plan includes an immediate C$500 million contribution to Stelco's pension plans and C$100 million to repay the company's creditors.
The remaining C$750 million would be retained within Stelco so the steelmaker can fund its capital expenditure program and general corporate purposes.
The Steelworkers union represents almost 5,000 of Stelco's roughly 8,900 employees.
Stelco, which entered bankruptcy protection in January 2004, is working on a plan to raise capital on equity and debt markets after snubbing several takeover offers to help it emerge from the Companies' Creditors Arrangement Act.
A spokeswoman for the Hamilton, Ontario-based steelmaker said Stelco is looking over details of the Steelworkers-Brascan plan and expects to release comments shortly.
A few hours later,
Stelco Rejects Offer From Steelworkers And Brascan
Stelco Inc. turned down a financing plan from the United Steelworkers of America and Brascan Corp. on Wednesday as the insolvent steelmaker said it has started working toward raising capital on its own.
Stelco said Brascan already had its a chance to step into the process when the company was entertaining takeover offers during a court-approved process that ended in February.
The steelmaker snubbed several takeover offers to help it escape the Companies' Creditors Arrangement Act and later got court approval to work on its own plan for raising capital.
Monday, April 11, 2005
For the year ended December 31, 2004, Stelco reported net earnings of $65 million ($0.63 per common share) compared with a restated net loss of $564 million ($5.62 per common share) for the year ended December 31, 2003.
Courtney Pratt, Stelco's President and Chief Executive Officer, said, "While our cash and financial positions have obviously improved during the past year, we had hoped for a more positive fourth quarter. As we indicated on March 8, 2005, the results for that period were adversely affected by repair and maintenance activity, the resulting impact on output and productivity, and the increased cost of such raw materials as coke, coal and scrap. Looking ahead, we anticipate a positive year in 2005 in terms of operating earnings and steel prices. As a consequence the Company is reaffirming its 2005 guidance issued on March 8, 2005. We remain focused on achieving the successful conclusion of our Court-supervised restructuring process in the coming months."
Thursday, February 10, 2005
Algoma Steel Inc. has dropped out of the bidding war for restructuring Stelco Inc., citing 'too many risks and obligations' associated with a potential takeover of the Hamilton steel giant.
The northern Ontario company announced late Wednesday it was withdrawing from the process to refinance or take over Stelco, just a few days before a deadline next Monday for formal bids.
At the same time, Algoma reported fourth-quarter profits that were 10 times what the steelmaker earned in the same 2003 period. Algoma emerged from its own bankruptcy court restructuring in 2001, the second time it did so in its long history.
Algoma did not specify what obligations would be required of the company if it managed to take over Stelco, though the United Steelworkers have been clear that the union wants any potential buyer to address a $1-billion-plus deficit in workers' pension plans.
Algoma has been engaged since mid-December in a due diligence review of Stelco's operations and in discussions with the Hamilton company and the union.
"Algoma's due diligence has confirmed that there are significant potential benefits in a combination of Algoma and Stelco, but given the risks and obligations associated with the acquisition, we have concluded that proceeding with the transaction would not be in the best interests of our shareholders," Algoma CEO Denis Turcotte said in a statement after stock markets closed.
Friday, December 31, 2004
Canadian steelmakers Stelco Inc. and Algoma Steel Inc. were among those that lost value on Thursday. Several firms have downgraded the sector in recent weeks on the belief that prices will decline next year and fall even further in 2006. China is central to steel supply and demand, given its rapid pace of industrialization and recent push to add more mills and facilities.
A story in The Wall Street Journal on Thursday said that over the past few years, China has threatened to create a steel shortage due to its high consumption trends. But now the country has become a net exporter due to a slowdown in its domestic demand and greater worldwide capacity. That could signal tougher times for the industry in the years ahead.
Monday, November 22, 2004
More Trouble for Stelco
According to the union:
USWA: 22 NOVEMBER 2004 - Steelworkers Give Stelco a Lifeline: Stelco Throws it Back: "The United Steelworkers has expressed shock and dismay at Stelco Inc.â€™s apparent lack of interest in retaining the companyâ€™s business with General Motors.
At meetings last week, Stelco had asked the Steelworkersâ€™ Local 8782 to provide it with certain assurances so that it could retain its business with General Motors.
The company had agreed to meet with the union Sunday night to finalize an understanding with the union that would address certain union concerns regarding proceedings under the Companies Creditors Arrangement Act (CCAA) and the proposed deal with Deutsche Bank.
Despite Stelcoâ€™s failure to show up as promised, the union provided the company and Deutsche Bank with written documents providing the requested assurances to GM and addressing the unionâ€™s concerns."
Meanwhile, back at the company web site:
Stelco announces failure to provide General Motors with security of supply
Expresses disappointment in union unwillingness to provide needed assurance
Stelco Inc. announced today that it had been unable to satisfy the conditions regarding the provision of security of supply required by General Motors, the Company's largest customer, through 2005. The critical requirement was assurances from the USWA that there would be no work stoppage to assure continuity of supply for General Motors throughout 2005.
General Motors required such assurance by 8:00 a.m. this morning. Stelco provided to Local 8782 the General Motors position on Friday, November 19 and had simply requested the union agree to General Motors' requirements. Unfortunately, the union placed unrealistic and unrelated demands on the Company as the price to maintain the General Motors business. As a result, General Motors did not receive by its deadline one of the two assurances it required as a condition of maintaining its business relationship with the Company.
Saturday, November 13, 2004
Offsetting some of the bidding fever is the prospect that Stelco's current shareholders, who have seen their holdings fall into penny-stock territory, may overturn the company's bankruptcy. That could quash the bidders' hopes of getting the company at a discount, but might set off a rally in the stock."
Thursday, November 11, 2004
'Yes, I think it's fair to say that was the case,' Don Belch, a senior Stelco official, said yesterday.
Canadian authorities also confirmed that Severstal and other companies from Russia, China and Mexico dumped steel and injured domestic producers from 1995 to 1998.
Belch, director of trade and market intelligence for Stelco, said in an interview it is difficult to assess whether Severstal's dumping actions significantly affected his company's financial performance.
Numerous North American steel companies, including Hamilton-based Stelco, have been fighting for survival in recent years because of a worldwide glut of production and falling prices. That led to extensive dumping of steel at below the cost of production into other countries."
Yahoo! News: "America's largest integrated steelmaker is ready to compete with a Russian rival as the bidding war intensifies for Canada's largest producer of steel, Stelco Inc., industry sources said Wednesday.
A day after an offer for Hamilton-based Stelco was made public by Russia's OAO Severstal, industry insiders said that U.S. Steel Corp. is one of several international players that have made "expressions of interest" in Stelco. "
Wednesday, November 10, 2004
OAO Severstal, controlled by Russian tycoon Alexei Mordashov, launched a bid of considerably more than $500-million for all of Stelco, which has been operating under creditor protection since January, but generated record profit in the third quarter.
The Severstal bid came as Stelco was scheduled to examine a proposal from Deutsche Bank AG that appeared set to give the German bank control of the insolvent steel maker."
Severstal - the largest Russian producer of steel and metal products - made its intentions public Tuesday, when Stelco's board was scheduled to meet to start examining offers for all or parts of the company. "
Thursday, October 21, 2004
"At this point in time, where we're focused and where we're headed is re-sourcing where we know we have a supply of steel," GM Canada spokesman Stew Low said Wednesday, a day after GM struck a deal to find other steel suppliers in the first quarter.
That deal would see the world's biggest car manufacturer seek out another steel supplier for the first three months of 2005, then return to Stelco for the rest of the year if Stelco settles some labour and financing issues by the middle of next month.
The agreement reached between two longtime business partners spares GM from having critical steel supplies for parts used in several GM factories, including its Oshawa, Ont., operations, cut off by a potential strike at Stelco's Lake Erie steel mill. Workers at that mill, which ships nearly 350,000 tons of steel to GM each year, have been without a contract since July 31.
The United Steelworkers union said Tuesday that GM would likely return to Stelco in the first quarter anyway, since the automaker would find spot market prices - believed to be much higher than GM's contract price - unpalatable.
"The idea that they're going to go somewhere else and pay more, I don't believe they are going to do that," Bill Ferguson, president of the Steelworkers local representing the Lake Erie members, said Tuesday. "They are pragmatic businessmen."
"We really got to the point where we needed to know, virtually now, where we stand," Low said. "We do need the time to re-source and we need to set up a new supplier, make sure the logistics are in place, they know where to ship, what products to ship, and all that kind of stuff.
"It's fairly complex, it's not just one order," he added. "It's multiple plants, it's going all over North America. So setting it up takes a huge amount of work."
Low downplayed reports GM would face much higher steel costs based on spot market prices in the first quarter, expressing confidence in skilled GM purchasers in Detroit.
Friday, October 08, 2004
In a letter received yesterday, the customer cited the uncertainty of supply caused by USWA Local 8782's issuance of 90 days notice of a potential strike at the Company's Lake Erie facility. The letter stated that, even though the customer has reached agreement with Stelco on the pricing terms for a 2005 contract, it is concerned about the possibility of a strike during that period.
As a result, the customer indicated that it cannot enter into a 2005 contract with the Company unless it receives assurances soon that Stelco will be able to perform throughout the term of the proposed agreement. "
Tuesday, October 05, 2004
Wednesday, August 04, 2004
But company officials went on a media blitz Tuesday to downplay the results, stating in separate conference calls held with Bay Street analysts and reporters, as well as in a letter to employees, that currently high steel prices are 'not going to last.'
'It's unsustainable,' Stelco president and CEO Courtney Pratt said during the conference call with analysts.
'Like everyone else, we don't believe we're going to sink down to the lows that we've seen in other cycles. But we certainly cannot stay at these elevated prices for too long.'
Stelco has been operating under bankruptcy protection since late January. The United Steelworkers challenged and is continuing to question Stelco's claim of insolvency, saying that the steel market was just about to boom before the company entered court protection from creditors.
The Steelworkers claim Stelco is using federal laws to slash wages, benefits, pensions and jobs - possibly well beyond the near 600 positions it has eliminated in Hamilton through attrition over the past 12 months. The company maintains it needs to reduce its overall cost structure so it can attract capital to finance needed renovations and mill upgrades.
'Stelco still faces a serious viability issue and must reduce costs, improve productivity and focus on key operations and products in order to become more competitive and remain profitable throughout the cycle,' Stelco chief financial officer Bill Vaughan told analysts. "
Wednesday, July 21, 2004
Tuesday, July 13, 2004
'Because we have committed purchases and secure supply from other mining properties in which Stelco holds an ownership interest, our steel production should not be affected through the balance of 2004,' said Stelco Chief Operating Officer, Colin Osborne."
Wednesday, June 23, 2004
The grievance issue was one of the reasons for delays in working out the final wording of a court order to appoint a former judge as an intermediary between Stelco's management and unionized workers.
Justice James Farley, who has been overseeing the Stelco restructuring since January, signed a formal order Wednesday that puts into effect a decision he handed down June 14.
That decision will give former Ontario judge George Adams a key role in resolving the labour disputes between Stelco and its unions while the company restructures under the Companies' Creditors Arrangement Act.
The order also provides for a 90-day warning before a strike or lockout.
That was one of the key requirements of General Motors, Stelco's biggest customer, which had threatened to find other sources of steel for itself and its suppliers if it couldn't get an assured supply from Stelco. "
Monday, June 14, 2004
Thursday, May 20, 2004
Friday, April 30, 2004
Courtney Pratt, Stelco President and CEO, said, 'We appreciate that Mr. Gerstenberger is acknowledging the extent of our problem. But we're puzzled why the representative of so many of our own employees would want to turn away possible sources of help - especially as it may relate to pensions. "
Friday, April 23, 2004
Thursday, April 22, 2004
Wednesday, April 21, 2004
Mr. Pratt's remarks will cover the changing steel industry and Stelco's current Court-supervised restructuring process. "
Monday, March 22, 2004
Wednesday, February 18, 2004
I saw a wonderful article about this guy in the National Post (which I can't BLOG because of their insistance on a registration/subscription business model). He was an outspoken guy who called 'em as he saw 'em, even when his opinions weren't popular. He said Stelco would go bankrupt and they did. As Tom Caldwell, chair of Caldwell Securities, said "He outlasted Stelco".
In 2000, he went on long-term disability for health reasons. His employers health insurance denied the claim. Without resources, he ended up on the Seaton House shelter for men. Even after friends rescued him and set him up in housing, he continued to visit the shelter, befriending Hungarian refugees and teaching them English and chess. He was still fighting the insurance claim when he died.
Friday, February 13, 2004
Wednesday, February 11, 2004
Thursday, February 05, 2004
Algoma itself has endured two bankruptcy restructurings, emerging from its second one in early 2002. "
The company blamed its financial troubles on its high cost structure, a deteriorating cash position and its inability to compete with other steel companies that have already restructured.
Stelco, whose 9,500 active workers are outnumbered by its 12,200 retirees, has said that so-called legacy costs, such as pensions, are a major factor in its inability to compete. "
Saturday, January 31, 2004
Friday, January 30, 2004
Automotive stamping companies ...
Ajax Precision was already in protection but now I see reports of their equipment going up for auction .
A G Simpson has been operating under court protection since October 2001
VELTRI METAL PRODUCTS, INC. FILES FOR COURT PROTECTION
And steel companies aren't doing well in the news either.
Jobs threatened as steel giant Stelco obtains bankruptcy-court protection
Analysts say Stelco may have to trim its workforce by as much as 1,500 workers to return to profitability. Stelco's unfunded pension liability amounts to $1.3-billion.
Turnaround specialist Hap Stephen - who helped restructure Algoma Steel two years ago - was appointed as the company's chief restructuring officer.
STEELWORKERS PREPARED TO WORK WITH STELCO STAKEHOLDERS ON THE "RIGHT KIND OF RESTRUCTURING"
Stelco is the third steel company recently ... they join Slater Steel whose protected was recently extended to March 1st and Ivaco Inc. Algoma Steel Inc. emerged from protection in January, 2002.