The Stel Salaried Pensioners Organization wishes to
thank The Hamilton Spectator for permission to post the following article by
Reporter Steve Arnold published in the March 23, 2006 edition
By Steve Arnold
The Hamilton Spectator
(Mar 23, 2006)
Frenzied efforts by Stelco and its demanding debtholders
have sealed most of the documents needed to end the company's bankruptcy
protection.
In a report released yesterday Stelco's court-appointed
monitor said those efforts continued until the writing of the report, and while
not all the necessary work has been finished, the goal of leaving court
protection by March 31 can be achieved.
"Stelco and the working Group Stakeholders worked
throughout the past weekend to incorporate the finalized business terms into
the key documents and to circulate these documents for review and
comment," monitor Alex Morrison wrote.
"Stelco and the Working Group Stakeholders have
continued to meet and to work to finalize the drafting of the key documents
throughout Monday and Tuesday. (As of Wednesday) most key documents are either
finalized or very close to being finalized."
What remains to be done, Morrison said, is redrafting work
on trust indentures and credit agreements. These documents will give the
restructured Stelco access to the money it needs to make a down payment on its
massive pension deficit and finance the capital work needed to make the company
a competitive steel producer again.
Despite the delays, all participants say they think the
documents can be signed and put into effect by the end of this month.
When Stelco finally emerges from bankruptcy protection, it
will have a new CEO -- turnaround expert Rodney Mott -- and a new structure.
Under its restructuring plan Stelco Inc. will become a
holding company owning the assets of nine general partnerships consisting of
its Hamilton steel operations, Lake Erie steel, Hamilton coke, Lake Erie coke,
Hamilton energy, Lake Erie energy, mining, Hamilton land and Lake Erie land.
Each unit will have its own management, employee
communications, web page, signage, human resource functions and accounting
records.
Stelco's new owners, including Tricap Management Ltd.,
wanted that structure because they felt it gives them the best chance of
raising capital for the company and would force each unit to be more
accountable for its operating results. Stelco filed for bankruptcy protection
Jan. 29, 2004, citing a massive pension deficit and mounting losses which
threatened to leave the company without operating cash.
The restructuring plan of the last two years includes a $400
million downpayment on the pension deficit of $1.3 billion and paying the
balance off over 10 years without seeking wage or other concessions from
workers and retirees. There is money for capital work. Subsidiaries have been
sold.
Former shareholders got nothing.
saronld@thespec.com