Steel Mills
Stelco Purchase Estimated at $500 Million
Written by Sandy Williams
June 15, 2017
Bedrock Industries received a deal on the purchase of Canada’s Stelco, acquiring it for less than $500 million, according to a report by the Hamilton Spectator.
U.S. Steel originally purchased what was then a much larger Stelco for $1.1 billion in 2007. The many transactions required to satisfy creditors, pension payouts, retiree benefits, taxes and other payments make it difficult to gauge the exact price Bedrock paid for the mill. Among the payments that Bedrock will make is a payment of $130 million to former owner US Steel.
Stelco has $300 million in cash that will help offset the price but, most notable for its buyer, the company will emerge from creditor protection debt free. Stelco is scheduled to leave the Companies’ Creditors Arrangement Act on June 30 under the ownership of Bedrock Industries.
A unique plan was put in place to secure the deal with Bedrock. A land trust, formed by the province, will lease one-third of the 818 acres of Stelco land back to the company, and the rest will be leased or sold to provide financing for pensions and benefits for Stelco retirees. Bedrock will be released from further environmental liability after paying $80 million to help remediate the land.
Sandy Williams
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