A court-appointed monitor helping oversee the operations of United States Steel Corp. (U.S. Steel) in the province of Ontario has released red-ink stained figures for the first half of 2015.
According to a report on the Hamilton Spectator website, the company’s U.S. Steel Canada (USSC) subsidiary is expected to lose more than $260 million by the third quarter of 2015. USSC operates an integrated steel mill in Nanticoke, Ontario, and a coke making and steel finishing operation in Hamilton, Ontario.
The report was released as Pittsburgh-based U.S. Steel heads toward a decision as to how to keep financing its USSC subsidiary, which consists largely of assets belonging to the former Canada-based Stelco firm. USCC is currently operating on a debtor-in-possession (DIP) line of credit that U.S. Steel is examining regarding its future viability.
Court-appointed monitor and mid-year report author Alex Morrison is quoted by the Spectator as calculating that USCC “is expected to lose more than $262 million by Sept. 11, 2015, when its current creditor protection expires.”
Morrison forecasts that in 2015 USCC “will spend $92.3 million more than it earns in Canada, chiefly to stock up on raw materials before the St. Lawrence Seaway freezes over for the winter,” according to the Spectator.
The news report also says USSC is seeking to replace its current U.S. Steel-appointed DIP financier with Toronto-based Brookfield Capital Partners Limited, which helped the former Stelco with a restructuring from 2004 to 2006. The court-appointed monitor, Morrison, endorses the change in DIP firms.