The Stel Salaried Pensioners Organization wishes to
thank The Hamilton Spectator for permission to post the following article
published in the July 16, 2005 edition
The Hamilton
Spectator
(Jul 16, 2005)
* Secured Lenders: These are the banks
and other institutions who have guaranteed loans. They will be repaid fully in
cash (about $200 million).
* Unsecured lenders: These are the
bondholders, tradespeople and others who have yet to be paid. They will receive
a basket of items but no cash. These items will include $250 million in secured
notes, which are essentially IOUs which will be paid out with interest in 2012.
These notes are secured to the company's assets, meaning that if Stelco should
go bankrupt, the unsecured lenders could seize its assets. They will receive
$116 million in secured convertible notes, which are IOUs that can be converted
into shares and $200 million in unsecured convertible notes, which are not
secured to assets, but will be paid out, with one per cent interest by 2010.
* Salaried and unionized employees:
They will be asked to make no concessions or to take any paycuts. As for their
$1.3 billion pension deficit, the company has proposed to put $200 million
toward the shortfall - $100 million in senior secured notes and up to $100
million from the company's sale of non-core assets. The rest of the pension
will be paid out by 2015 through annual payments of $98 million.
* Common shareholders: They take the
hardest hit. Stelco has opted to "dilute" its 100 million common
shares to about one million, meaning if you owned 100 shares of Stelco stock
prior to the restructuring, you now own one share.