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
February 2, 2006 edition
By Naomi Powell
The Hamilton Spectator
TORONTO (Feb 2, 2006)
Stelco has closed the sale of its Stelwire operations to
Mittal Steel after an Ontario judge allowed the company to emerge from Stelco's
blanket of bankruptcy protection.
Ontario Superior Court Justice James Farley granted Stelco a
court order yesterday that effectively allowed Mittal to finalize its purchase
of Stelwire, along with Stelfil Ltee. and Norambar Inc. yesterday afternoon.
Stelco also closed the sale of Edmonton-based AltaSteel to
British Columbia's Moly-Cop Steel Inc., an affiliate of South Africa's Scaw
Metal Group.
The deals leave Stelco to concentrate on its core operations
in Nanticoke and Hamilton.
CEO Courtney Pratt said the sales "provide the
subsidiaries with ownership that views them as strategic assets. I'm pleased
for all concerned."
A condition of the deal between Mittal and Stelco was that
the Hamilton steelmaker's restructuring plan be put in place. Stelco has
delayed its emergence from protection until the spring and Mittal, the world's
biggest steelmaker, was concerned about allowing any more time to elapse.
"Mittal has advised Stelco and the monitor that it has
serious concerns with respect to any further delay in closing the
transaction," Alex Morrison, Stelco's court appointed monitor, said in a
report.
Those concerns include "the possible further
deterioration in the value of Stelwire's business." The steel giant also
wanted a guarantee that the subsidiary would not be liable for additional
claims. Farley's ruling removed Stelwire from the protection of the Companies
Creditors Arrangement Act allowing Stelco to close the deal with Mittal.
"This is great news for us," said Scott Duvall,
president of the union representing Stelwire's Hamilton employees. "Now we
can move forward and make the business profitable again."
Stelco decided in 2004 to shed its subsidiaries in order to
focus on improving its core operations in Hamilton and Nanticoke.
Industry giant Mittal Steel snapped up three of those
subsidiaries in November, including Stelfil Ltee. and Norambar Inc. of Quebec
and Stelwire, which has operations in Burlington and Hamilton.
Stelfil and Norambar are not covered by Stelco's bankruptcy
protection.
Mittal Steel launched a $22.5-billion US hostile offer for
the world's second-biggest steelmaker, Luxembourg-based Arcelor, last week.
Arcelor appears set to win a bidding war for Dofasco Inc., with a $71-per-share
bid that expires Feb. 9. But Mittal intends to flip Dofasco over to the
runner-up in the bidding war, Germany's ThyssenKrupp, if it succeeds in
acquiring Arcelor.
Stelco announced yesterday that it has also finalized the
sale of AltaSteel to Moly-Cop Steel Inc. AltaSteel manufactures steel bars for
the mining and construction industry and employs about 350 people.
"We believe Scaw Metals is good for AltaSteel,"
said Paul Perrault, president of the union representing AltaSteel employees.
"They are in the same line of products we are and their
interest is to grow the business at AltaSteel and Moly-Cop.
"They're ready to go to business."
npowell@thespec.com
905-526-4620
With files from The Canadian Press