US Steel asks to extend protection to restructure
Unable to negotiate a sale of its Ontario operations or reach a restructuring agreement.
HAMILTON — US Steel Canada Inc. will seek a court order to continue restructuring under court protection beyond this year, the company said.
The former Stelco Inc., purchased by US Steel in 2007, has been operating under Companies’ Creditors Arrangement Act protection since September 2014, and it was most recently extended until Dec. 11, 2015.
The company said it has been unable to negotiate a sale of its operations in Hamilton and Nanticoke, Ont., or reach a restructuring agreement, and without an extension of the court protection it would likely have to cease operations at the end of the year.
“With a court order we can preserve work and meet obligations to approximately 2,200 employees and continue to deliver high-quality steel products to our customers from our two Canadian steelmaking facilities,” said Michael McQuade, president and general manager of US Steel Canada. “The court order, if granted, would also provide additional time to find a consensual restructuring solution, and to conduct a new sale and restructuring process when market conditions improve.”
Also contributing to the need for this court order are the steps taken by US Steel Canada’s parent company, United States Steel Corp., to reallocate Canadian production to its facilities located in the US, the company said.
As part of the extension request, the company will ask the court to allow “the immediate suspension of all pension funding contributions, except contributions for current service.”
Payments to retired employees and surviving spouses from company pension plans would continue, but supplementary pensions paid directly by US Steel Canada would be suspended.
It also wants to suspend payments of post-employment health, medical, dental and life insurance benefits in the near term, and suspend real property tax payments.
© 2015 The Canadian Press