The Stel Salaried
Pensioners Organization wishes to thank The Hamilton Spectator for permission
to post the following article by Reporter Mark McNeil, published in the
December 12, 2005 edition
By Mark McNeil
The Hamilton Spectator
(Dec 12, 2005)
Stelco workers and pensioners say they
are ecstatic about the approval of a landmark restructuring plan by creditors
that is scheduled to be presented in a Toronto courtroom today.
But shareholders who stand to get
nothing say they have been victimized and are vowing to fiercely oppose court
approval of the deal.
Company representatives will tell the
court that 78.4 per cent of creditors voted in favour of a deal on Friday that
would protect jobs and pensions for the foreseeable future.
The plan calls for Tricap Management
Ltd. to own at least 34.5 per cent of Stelco, with investors Sunrise Partners
LP and Appaloosa Management sharing a minimum of 34.9 per cent. The deal
preserves a $400- million down payment on Stelco's $1.3-billion pension
shortfall, and calls for no concessions by workers.
The next step will be for Justice James
Farley to set a date for a hearing at which stakeholders can express their
views on the deal. It's expected he'll hear vigorous opposition.
"I think the entire process
stinks," said Faith Lupia, a shareholder in Collingwood who says she
stands to lose $50,000 on the investment she made a year ago when Stelco shares
were trading for 86 cents.
Despite the fact the company was
already was in bankruptcy protection at the time, she felt rising steel prices
made it a good investment. "They have not done the shareholders justice at
all."
Don Gallinger, also of Collingwood, who
has nearly a million shares mostly bought at 80 cents before the company went
into bankruptcy protection, says, "It's totally wrong, plain and simple.
The whole thing has been a mistake all the way along."
He contends that Stelco originally went
into bankruptcy protection as an effort to get concessions from unionized workers
and pensioners.
But the process got sidetracked and now
the shareholders have been left taking the hit, he said. "There is no
doubt the company will be flipped in a couple of years and the (new investors)
will double or triple their money."
Documents filed with the court by
shareholders argue that existing shares should be worth between $11 and $13,
based on a recent valuation.
It will be up to Farley to decide how
to deal with the challenge by shareholders. But the company expects the court
will formally approve the plan before the end of the year. "If that
approval is granted, the company anticipates emerging from court protection
early in 2006," a statement from Stelco said.
Paul Wendling, a former salaried
employee who is now a pensioner, said he was elated to hear that creditors
approved the restructuring plan after 23 months of creditor protection.
"I am relieved. It is a good
settlement for pensioners. We're pleased there is some degree of assurance that
the pensions are secured for the future. We couldn't be happier. This is
great," he said. "Hopefully, it is clear sailing from here."
Ray Silenzi, a representative of
unionized pensioners, said, "It was looking like the process was never
going to end. But we ended up avoiding a disaster and we have come out of it
with everything intact."
Others, though, raised caution that
after Stelco emerges from bankruptcy protection -- if that happens as expected
-- the company will find itself headlong into potentially difficult labour
negotiations with its largest union, Steelworkers' Local 1005, at Hilton Works.
"The next big hurdle is what are
they going to do when the contract at Hilton Works comes to an end at the end
of July," said Richard Anthony, a plant employee. "If the contract is
renewed we can then see how the kite will fly for a couple of years."
Gord Marsh, a health and safety rep
with Local 1005, said, "I'm glad that it is over because it takes a lot of
the pressure off. But I'm waiting for the other shoe to drop.
"It won't be two months or six months
or a year down the road. I think it will be three to five years ahead. There
will be problems when they try to sell the company or the legacy costs become
an issue again."
Claude LaFleur, who works at Lake Erie
Works, said, "The guys worked harder to impress anybody and everybody that
we can do better. We broke more and more records at Lake Erie. The workers
wanted to show we are not the problem."
mmcneil@thespec.com
905-526-4687