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
February 25, 2005 edition
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Feb. 25, 2005. 12:53 AM |
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Severstal accuses Stelco of
blocking its bid |
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By Steve Arnold |
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One of the companies bidding for Stelco has accused the steel company of deliberately blocking its efforts. In a letter sent late yesterday to lawyers for the company and its court-appointed monitor, a law firm for OAO Severstal says Stelco is hindering attempts to bring critical stakeholders into the process. "As you know, over the past several months Severstal has expressed concern that Stelco's capital raising and sale process included unnecessary impediments on potential bidders' ability to put forth well-considered proposals supportable by critical constituencies," lawyer Gary Cullen wrote. The letter, dated yesterday, became public the same day the court- appointed monitor released a report rejecting calls for an independent committee to review bids for Stelco. In his report, Ernst and Young senior vice-president Alex Morrison wrote: "In the monitor's view, negotiating a transaction or transactions of the complexity contained in the offers submitted to Stelco cannot be done through a bid review committee". He added the best groups such as retirees and workers could expect is confidential briefings on aspects of the bids that affect them. Both documents appeared on the eve of a court hearing in which leaders of the United Steel Workers of America will ask for a court order removing what they call a veil of secrecy around Stelco's restructuring. At the same time, a group of salaried retirees will petition for the removal of two new directors appointed to the company's board to represent shareholders. Pensioner spokesman Paul Wendling says the appointments were unfair because shareholders now have access to information about the bids denied other groups with a stake in Stelco's future. "Those new directors clearly have a conflict of interest," he said. "They have received this information and something has to be done about that or the entire process becomes unfair." Justice James Farley has also warned that any attempt by Stelco's board to declare which bid it supports could face "fallout" if it is found that the latest director appointments have "tainted" the bid-selection process. Four bids to refinance or buy Stelco have been submitted. In addition to the $900 million offer by Germany's Deutsche Bank and the Severstal bid, offers are believed to have come from TD Securities and Sherritt International, which is backed by the wealthy Ontario Teachers Pension Plan. Stelco's board of directors has met once in person and once by conference call to review the offers. Company president Courtney Pratt has said a decision on a final bid isn't expected until next week. Union leaders have become especially angry in the last week after a letter from the monitor ordered bidders to stop talking to stakeholders until the company's board makes a decision. For Bill Ferguson, president of the 1,000-member union local at the Lake Erie plant, that can only mean Stelco and the monitor are trying to drive the restructuring toward a pre-determined conclusion. sarnold@thespec.com 905-526-3496 With files from The Canadian Press |