The Stel Salaried Pensioners Organization wishes to
thank The Hamilton Spectator for permission to post the following article by
Reporter Dana Borcea, published in the April 3, 2006 edition
By Dana Borcea
The Hamilton Spectator
(Apr 3, 2006)
Stelco's new boss will start the job by investing $5.5
million of his own money into the company.
Yesterday, Stelco announced its new president and CEO Rodney
Mott will purchase one million common shares at $5.50 a share today. More than
27-million shares, as well as millions in warrants and secured notes, will
begin trading this morning.
The announcement came yesterday less than 48 hours after the
steelmaker emerged from 26 gruelling months of bankruptcy protection.
The new stocks were issued after Stelco's previous shares
were wiped out under the company's restructuring plan.
One industry analyst described Mott's purchase as
significant.
"This is very much a statement of confidence in the
future of the company," said Joseph D'Cruz, a business professor at the
University of Toronto's Rotman School of Management.
If he wants to see a decent return on his investment, Mott
will have to steer the troubled company toward profit.
D'Cruz said Mott's confidence is warranted. He described the
investment as a reasonable risk.
"It's not a slam dunk but a safe bet. (Stelco) has
restructured its debt, has good facilities and steel prices are good."
The 30-year industry veteran and former head of
International Steel Group in the United States has been called the turnaround
expert.
"So far I've been very fortunate to pick companies with
a lot of upsides and been very successful at either start up or
turnaround," he said last week before a meeting with Stelco's board.
Mott earned $42 million last year after breathing new life
into International Steel Group.
While his new employer has not disclosed his salary, it is
unlikely to match his previous salary with ISG.
Despite Mott's considerable assets, D'Cruz said the move
represented a significant gesture of faith.
In order to invest this kind of money, "he must believe
this company has a real future."
Stelco representatives were not available for comment last
night.
dborcea@thespec.com
905-526-3214
Local 1005
elections: A13