The Stel Salaried
Pensioners Organization wishes to thank The Hamilton Spectator for permission
to post the following article by Reporter Tara Perkins published in the March 5,
2005 edition
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Mar. 5, 2005. 12:58 AM |
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Pratt denies Stelco chiefs feared
for jobs |
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By Tara Perkins |
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Stelco's chief executive says the firm's executives did not reject all the
steelmaker's suitors just to save their own jobs. Under new ownership, the fate of the current management would have been
uncertain. In a letter to employees yesterday, CEO Courtney Pratt said a number of
advisers were involved in the decision to toss out the bids for the company,
which now expects to be in bankruptcy protection until the summer. "It would have been impossible for only one or two people to have
made the decisions throughout the process," Pratt said in the letter. Three companies presented Stelco with an offer to buy or refinance the
company. Those suitors -- Severstal, TD Securities and a joint venture between
Sherritt International and the Ontario Teachers' Pension Plan -- all aimed to
top a $900 million floor deal that Stelco negotiated with Deutsche Bank last
year. But Stelco decided this week that it will not accept any of the offers. Instead, it will look to the capital markets for help with refinancing. After 13 months in court protection, Pratt said yesterday that the company
is not starting all over again. "We had said we'd explore the refinancing or sale of the company with
potential individual investors and we did so," he wrote to employees. "Now we will look to the wider capital markets for other ways in
which to raise money." The company will go to court on March 30 to present a new plan to Justice
James Farley, who is overseeing the protection. As the case stretches, Stelco's restructuring bill -- largely fees for
lawyers and advisers -- continues to grow by the millions. Pratt said Stelco hopes to "move with a sense of urgency" now to
take advantage of the current favourable market conditions for steel
companies. He said Stelco decided not to go with any of the bidders because "it
was determined that the bids either did not adequately address key stakeholder
concerns or would not adequately position Stelco as a stronger company
emerging from (bankruptcy protection)." The steelmaker considered each offer based on the amount it paid to
creditors, the impact on various stakeholder groups, including workers and
pensioners, how the bid addressed the company's $1.3 billion pension deficit,
and how well it set Stelco onto a healthy financial and operational path,
Pratt said. Despite Stelco's rebuff, Russian steel giant Severstal hasn't given up.
Stelco's decision still must be presented to the court, Severstal says, and
Stelco must prove to the government it can address its pension deficit
without the help of a bidder. During a conference call yesterday, Sherritt International confirmed that
it's abandoning its effort to buy Stelco's energy assets and refinance the
steelmaker. tperkins@thespec.com 905-526-4620 |