The Stel Salaried Pensioners Organization wishes to
thank The Hamilton Spectator for permission to post the following article,
published in the January 31, 2006 edition
The Canadian
Press
TORONTO (Jan 31, 2006)
Stelco Inc. will ask a judge tomorrow
to effectively remove one of its subsidiaries from bankruptcy protection so
that it can be bought by Mittal Steel.
Mittal, the world's largest steel
company, agreed to buy three of Stelco's subsidiaries in November. The two companies
had been working toward a Jan. 31 closing date, after receiving final approval
under the Competition Act and the Investment Canada Act Jan. 19.
Stelwire Ltd., which has operations in
Burlington and Hamilton, is covered under Stelco's bankruptcy protection, while
the other two subsidiaries are not. Stelco recently obtained court approval for
its final restructuring plan and hopes to emerge from court protection by
March.
In the meantime, Mittal has expressed
concerns about buying Stelwire, said the court-appointed monitor in Stelco's
bankruptcy protection, Alex Morrison of Ernst & Young, in court documents.
A condition of the deal between the two
steelmakers is that Stelco's restructuring plan is implemented or that Stelwire
has no excess liabilities or claims from the bankruptcy protection proceedings.
"Mittal has advised Stelco and the
monitor that it has serious concerns with respect to any further delay in
closing the transaction," Morrison wrote.
The concerns include "the possible
further deterioration in the value of Stelwire's business," and the need
to spend more on turning it around.
Stelco will go to court tomorrow to ask
an Ontario Superior Court judge for an order that will facilitate closure of
the deal with Mittal, Stelco spokesperson Helen Reeves said.
That order will remove Stelwire from
much of the protection afforded to Stelco under the Companies Creditors
Arrangement Act.
It will also remove some of Morrison's
powers over Stelwire and limit claims on the subsidiary.