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 18, 2005 edition
|
Feb. 18, 2005. 12:51 AM |
|
Stelco CEO hints at breakup |
|
By Tara Perkins |
|
Stelco's subsidiaries are on the table and CEO Courtney Pratt would like to see them in the hands of an owner who will make them a priority. That suggests the steelmaker favours a plan to break up the company as it comes out of bankruptcy protection. And while he refused to discuss any of the bids yesterday, Pratt's comments suggest Russian steelmaker Severstal doesn't have the inside track that analysts say it does. In a speech to the Canadian Club yesterday, he said Stelco's Stelwire, Stelfil, Norambar, Stelpipe and AltaSteel have been starved of capital over the years. "In many ways, we were dragging them down with us," Pratt said. "We were looking for focus, and we still are." Notes for his speech, supplied to The Spectator by Stelco, added: "We hope they will be acquired by parents that will treat them as core operations and give them the opportunity to grow and prosper." That flies in the face of the position taken this week by the United Steelworkers, who have endorsed Severstal. The union wants the company kept together, a position Severstal has endorsed. Stelco spent five months last year developing a plan for its future, which includes focusing on high-value products, simplifying the organization and upgrading some Hamilton and Nanticoke operations, Pratt said. But that strategy assumes "that Stelco comes out of this as a stand-alone company. Not owned by someone else who may have some other priority for the place." He said the strategy "was a very, very big job, and it's given us a sense of direction, a sense of what we're actually building here." Stelco's board will be meeting today for the first time since bidders submitted their final offers to buy or refinance the company, which has been in bankruptcy protection for more than a year. The company has received numerous bids for its core assets, as well as bids for its subsidiaries. Pratt would not reveal how many bids Stelco has received, or would he comment on any of the offers. It is known that Stelco's board will be looking at refinancing offers from Deutsche Bank, Severstal and Sherritt International today. TD Securities may also have submitted a bid. Severstal is the only steelmaker interested in buying the company. Last weekend, Bill Ferguson, president of the Lake Erie local, said he plans to sign an agreement with Severstal shortly. Lake Erie has been without a contract since the summer, and holds some power during the choice of bidders. Without a collective agreement, the local could be in a strike position when Stelco emerges from court protection. Asked about the Steelworkers' endorsement of Severstal's bid, Pratt said, "the views of the union are going to be important going forward. I think that's a significant statement. But I also put a lot of stock in what Bill also said, which is we have to consider all the bids as well." The CEO was expecting the bids to be difficult to compare, and now, having looked at them, he said, "they're not apples to apples bids," noting that the bid by Sherritt is "absolutely unique." Stelco filed for protection last January based on forecasts that said it could run out of cash by the fall. It subsequently earned $100 million during the second and third quarters of the year, bolstering claims by the union that Stelco was using protection unfairly. During its year in protection, Stelco has removed a layer of management, integrated its Hamilton and Lake Erie operations, and set production records, Pratt said. "Stelco will emerge a stronger company and a good corporate citizen of Hamilton." tperkins@thespec.com 905-526-4620 |