Stelco Seeks Protection

Stelco Inc. announced that it is initiating a Court-supervised restructuring in order to restore its financial health and competitive position in the North American steel industry.

The company will seek an Order under the Companies' Creditors Arrangement Act in a hearing before the Ontario Superior Court of Justice. The Order being sought, if granted, will cover Stelco Inc. and its subsidiaries Stelpipe, Stelwire, CHT Steel, and the previously closed Welland Pipe. Other subsidiaries, including AltaSteel, Norambar, and Stelfil, are not participating in this process.

Courtney Pratt, Stelco’s president and CEO, said, "We are taking this action to address our problems, protect our stakeholders, develop a restructuring plan, and become a viable steel producer. The Order being sought, if granted, will provide the process and the legal protection in which we can operate without interruption and serve our customers throughout this period. We will continue to pay wages and salaries to our employees and to pay suppliers for goods and services.

"Recent increases in steel prices have not been, and are not expected to be, sufficient to offset the even more significant past and projected escalation in our costs. While we have begun to implement a number of cost control measures, we do not and will not have the liquidity we need without the legal protection and other benefits provided by a Court-supervised restructuring process. The sooner we act, the better our ability to preserve the cash we need, fix our problems, emerge as a stronger company and attract the capital to fund the capital expenditures that will make us more competitive,” said Pratt.

The company also announced the appointment of Hap Stephen as chief restructuring officer.