Steam billows from a stack at the Stelco plant in Hamilton, March 4, 2009.MIKE CASSESE/Reuters
Steel maker Stelco Inc. is seeking court approval to move forward with its restructuring following an agreement with Bedrock Industries.
Ontario Finance Minister Charles Sousa said in a statement Friday that Bedrock's proposal would mean that operations at the Hamilton and Lake Erie facilities would continue and 2,100 jobs would be preserved.
Mr. Sousa said it also means that retirees in Stelco's four main pension plans would continue to receive their benefits without interruption or reductions, and continue to receive postemployment benefits.
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In addition, the minister's statement says the proposal would ensure that Ontario receives financial assurance to cover costs that may be incurred in connection with environmental conditions on the land.
Mr. Sousa said this would open the door to development of the industrial lands in a manner that protects the environment as well as benefits the Stelco retirees through the creation of a land trust, governed by the retirees.
To help facilitate the restructuring of Stelco, Mr. Sousa says the province will provide financial support of up to $76-million in fully secured loans and various forms of regulatory relief.
"Ontario welcomes this latest development in the effort to restructure Stelco as an important step toward saving 2,100 local jobs, protecting pensions and supporting economic development in the Hamilton region while ensuring environmental protection," Mr. Sousa said in a statement Friday night.
Mr. Sousa said the Bedrock proposal is now being brought before the court to seek approval to move forward and finalize the terms.
"We are encouraged that the proposed agreement and plan filed in court today provides a solid foundation that would help facilitate the restructuring of Stelco," he said.
Stelco remains in court-supervised creditor protection proceedings under the Companies' Creditors Arrangement Act.
U.S. Steel announced last month that it had a preliminary agreement to sell the business as a going concern to Bedrock Industries.
An Ontario Ministry of Finance release says Bedrock has agreed to continue steel operations and ensure that the approximately 2,100 existing jobs continue at Stelco's Hamilton and Lake Erie facilities.
The release says the transaction ensures that Stelco's four main pension plans – which it said are underfunded and would otherwise face wind-up at reduced benefits levels – remain in place, providing benefits for service accrued prior to the transaction.