The Stel Salaried Pensioners Organization wishes to thank The Hamilton Spectator for permission to post the following article published in the October 31, 2007 edition
Court rules Stelco sale OK despite union plea
The Hamilton Spectator With files from
The Associated Press
(Oct 31, 2007)
The buyout of Stelco is expected to close
today, ending nearly a century of independence for the Hamilton steelmaker.
The Ontario Superior Court of Justice
approved United States Steel Corp.'s $1.1 billion purchase of Stelco yesterday,
clearing the final obstacle to the deal.
Regulators and shareholders have already
approved the deal, which will make U.S. Steel the world's fifth largest steel
producer.
Local 1005 of the United Steelworkers
presented the only opposition to the sale during yesterday's hearing.
But the court rejected the union's argument
that U.S. Steel should not be allowed to remove a pair of clauses from the
pension funding agreement. Those clauses called for Stelco to contribute excess
cash to the pension plans and forbid dividend payments until the pension plans
are fully funded.
Lawyers for Stelco, U.S. Steel and the
province of Ontario -- which brokered the changes to the pension -- countered
that the deletion of the clauses was outweighed by U.S. Steel's $32.5 million
contribution to the pension and its unconditional guarantee that pension
funding obligations would be met.
In related news, U.S. Steel's third-quarter
profit fell about 35 per cent with results hurt by lower prices, shipments and
costs related to raw materials and the Stelco purchase, the company said
yesterday.
The Pittsburgh-based steel maker said net
income for the three months ended Sept. 30 fell to $269 million US, or $2.27
per share, from $417 million, or $3.42 per share, a year earlier.
The quarter included a $27-million pretax
charge related to inventory acquired with Dallas-based welded pipemaker Lone
Star Technologies Inc. and a tax provision with charges totalling $11 million.
The charges cut earnings by $28 million, or 23 cents per share.
Shares of the company fell about $6.50, or
nearly 6 per cent, to $106 a share in early trade yesterday.
U.S. Steel bought back 285,000 shares of its
stock for $28 million in the quarter.
Sales grew about 6 per cent to $4.35
billion, from $4.11 billion during the same period last year.
US Steel CEO John Surma said in a statement
that he expected a decline in results for the fourth quarter due to
"normal seasonal effects and several scheduled blast furnace
outages."