The Stel Salaried
Pensioners Organization wishes to thank The Hamilton Spectator for permission
to post the following article published in the January 14, 2006 edition
The Canadian Press
(Jan 14, 2006)
The court monitor in Stelco Inc.'s court-supervised
bankruptcy restructuring said yesterday the company has drafted a list of new
directors.
Stelco and some of its stakeholders hired Russell Reynolds
Associates Co. to find suitable candidates for the steel producer's board of
directors as it prepares to emerge from nearly two years of bankruptcy
protection from creditors.
The replacement of the board is being driven by three
investment funds which are helping to bankroll Stelco's pending restructuring.
Stelco's bondholders are currently negotiating the new board
composition with those funds, the court monitor said in a report released late
yesterday.
Earlier this week, Stelco revealed that Courtney Pratt has
been asked to step down as Stelco's CEO but will likely become chairman of the
board.
On Tuesday, the company will ask an Ontario Superior Court
judge to give the final stamp of approval to its restructuring plan.
That could mark the near-end of Stelco's restructuring
process, but the plan is being fought by a group of Stelco's current
shareholders, whose stock holdings are essentially wiped out under the plan.
If the restructuring is implemented, Tricap Management Ltd.,
a restructuring fund owned by Brookfield Asset Management -- the former Brascan
Corp. -- will own at least 34 per cent of Stelco.
Sunrise Partners LP and Appaloosa Management LP would own a
combined Stelco stake of at least 34.9 per cent.
The restructuring plan allows Tricap to choose four
directors, and Sunrise Partners Ltd. Partnership and Appaloosa Management LP to
each choose one.
The remaining three directors have to be acceptable to all
three financiers.
The court monitor, Alex Morrison of Ernst & Young, said
all three have indicated they support the list of directors Stelco has drafted.
Morrison also said there are still disputes about what
Stelco's corporate structure should be, as the company's new lenders look for
security. Stelco is set to receive a $375 million bridge loan from Tricap, in
addition to a $600 million asset-based loan from a bank syndicate.
Satisfying the lenders could mean transfering some of
Stelco's operations or divisions to new affiliates.
If that happens, Stelco might need to remain in bankruptcy
protection beyond the end of February, Morrison said.