The Stel Salaried
Pensioners Organization wishes to thank The Hamilton Spectator for permission
to post the following article by Reporter Naomi Powell published in the
December 21, 2005 edition
By Naomi
Powell
The Hamilton Spectator
(Dec 21, 2005)
Stelco shareholders are expected to
join forces at a Hamilton hotel this afternoon in an attempt to rescue their
investments in the steelmaker.
The meeting, organized by an anonymous
shareholder with a large investment in the company, is intended to rally
support for a legal bid to overturn Stelco's restructuring plan.
That plan, approved by 78.4 per cent of
creditors at a vote on Dec. 9, calls for all existing Stelco shares to be wiped
out.
New shares will be issued, with a large
portion awarded to restructuring firm Tricap Management Inc. and hedge funds
Sunrise Partners Partnership and Appaloosa Management.
"We just want all shareholders to
know what's going on," said Peter Jervis, a lawyer for shareholders who
are holding the 4 p.m. meeting at the Sheraton Hotel. "They have a right
to know what's happening at this company."
Jervis's clients have railed against
Stelco's plan, which they say is based on skewed financial forecasts for 2006.
On Jan. 17, they present their case to
Justice James Farley, who has supervised Stelco's bumpy 23-month ride through
bankruptcy protection.
Since shareholders did not receive a
vote on Stelco's plan -- that right is reserved for creditors -- their only
recourse is to convince the judge the deal is unfair.
A key component of their case will be a
report by business valuators Navigant Consulting. Commissioned by Jervis's
clients Pollitt & Co. and AGF Management, the report estimates the 2006
price of hot-rolled steel at $525 per tonne.
Stelco has forecast $458 a tonne, a
figure Jervis has said lowballs the company's projected earnings in order to
justify the cancellation of shares.
The report concludes Stelco's equity is
worth $1.1 billion to $1.3 billion.
That translates to $10.76 to $12.71 a
share.
npowell@thespec.com
905-526-4620