Stelco starts trading with a bang; shares jump 13 per cent in debut
The century-old steel maker emerged from creditor protection this summer after a tough decade of U.S. Steel ownership
HAMILTON—Ontario steel maker Stelco Holdings Inc. started trading 11 per cent higher than its opening asking price on its first day of trading on the Toronto Stock Exchange.
Stelco priced its initial public offering at $17 a share to pull in an expected $200 million. Its stock was up $1.90 at $18.90 in morning trading Nov. 3 on the TSX and eventually closed at $19.20 Friday afternoon, or just shy of 13 per cent above its IPO price.
The Hamilton-based steel company says it plans to use the money for capital investments, pension payments, and to increase its offerings in specialized steel products.
It wants to grow its offerings in galvanized steel, in part to regain a foothold in the nearby auto industry where it used to have a significant presence.
The company says it could also invest in co-generation to reduce its reliance on Ontario’s high electricity costs, and thereby reduce operating costs in the power-intensive industry.
Stelco’s history goes back to 1910 but in recent years has been beset by financial problems. It went into creditor protection in 2004 and was sold as a subsidiary to U.S. Steel Co. in 2007, then went back into creditor protection in 2014 before being sold to Bedrock Industries L.P. in late 2016.
At the end of June, Stelco emerged from creditor protection under its original name, having eliminated $3 billion of debt and about $1.4 billion of pension and other retirement obligations.