Essar Steel Algoma lenders to invest US$425 million in struggling steelmaker
Court order extends steelmaker's protection from creditors until 2017
SAULT STE MARIE, Ont.—Essar Steel Algoma Inc., which is operating under court protection from creditors, has submitted a restructuring plan that would see its lenders invest up to US$425 million in the financially strapped steelmaker.
The company says the plan involves reducing its debt by approximately US$1.15 billion, with annual interest expense savings of approximately US$125 million.
The proposal came late last week as the Ontario Superior Court approved an extension of the steelmaker’s protection under the Companies’ Creditors Arrangement Act until Jan. 31. 2017.
The court also signed off on an amendment and extension to the company’s debtor-in-possession financing that will provide an additional US$35 million in liquidity.
The company filed for creditor protection last November.