U.S. Steel financing plan approved by courts
Several players objected to an earlier version of the proposal, but the Ontario government now agrees not to oppose the amended plan
HAMILTON, Ont.—A judge has approved U.S. Steel’s plan to finance its Canadian operations while it attempts to reach a court-supervised compromise with its creditors.
Lawyers for the United Steelworkers union said they will not oppose the plan, which will see the steelmaker’s American parent provide a $185-million “debtor-in-possession” loan to keep its Canadian arm running through next year.
Others, including the Ontario government, had objected to an earlier version of the proposal but now agree not to oppose the amended plan.
“Today’s resolution helps to stabilize the company during the restructuring process and continues to protect the interests of employees, pensioners and the province,” Ontario Finance Minister Charles Sousa said in a statement.
“The province will continue to work with the parties involved throughout the restructuring to find solutions that are fair and equitable to all those affected.”
U.S. Steel’s lawyer told the court that the arrangement is in everyone’s best interest.
The company said in a statement the deal will allow it to continue to meet its obligations to employees and suppliers as well as provide payments for pensions and benefits to retirees while it develops and implements a comprehensive restructuring solution under a process governed by the Companies’ Creditors Arrangement Act, or CCAA.
U.S. Steel Canada, with operations at Lake Erie Works and Hamilton Works, has the capability of producing approximately 2.6 million tons of steel annually.
It employs about 2,000 people and has thousands of retired employees.
With files from CHML