Insolvent Sault Ste. Marie, Ont. steel producer needs green light from Ontario Superior Court to sell assets to consortium formed by KPS Capital
SAULT STE MARIE, Ont.—Essar Steel Algoma says it has agreed to a joint bid for its assets by a consortium of bidders formed by New York-based KPS Capital Partners LP and a number of its term lenders.
The value of the bid by KPS and the insolvent steelmaker’s pre-petition term lenders was not disclosed.
Essar Steel Algoma, based in Sault Ste. Marie, Ont., filed for creditor protection under the Companies Creditors Arrangement Act in November. Pre-petition liabilities are those that arise prior to a company seeking court protection from creditors.
The company said it was serving a motion June 17 with the Ontario Superior Court of Justice asking for the deal to be approved.
The consortium bid includes a cash consideration, a credit bid equivalent to the term loan and the assumption of certain liabilities.
In addition to the court approval process and customary regulatory approvals, closing the transaction is subject to a number of conditions relating to employee and benefit matters, including pension plans and collective agreements, capital projects and environmental matters.