Potential buyers of U.S. Steel Canada Inc. are kicking the tires at the steel maker, court documents show.
The United Steelworkers union, which represents workers at the company, said it is in discussions with several parties that are interested in acquiring the steel maker and keeping it running.
Another stakeholder group, retired and active salaried employees, said two former executives of Stelco Inc. have met with credible investors that have expressed interest in potentially making capital investments in U.S. Steel Canada and that support a restructuring plan the salaried group is developing.
U.S. Steel Canada (USSC) has been operating under the protection of the Companies’ Creditors Arrangement Act since September, 2014. United States Steel Corp., which bought the company in 2007 when it was Stelco Inc., cut ties with its Canadian unit last year after failed restructuring negotiations with stakeholders and a failed sales process.
Discussions with potential bidders are at various stages, the union said in a court filing, but are threatened by a new sales process U.S. Steel Canada wants the Ontario Superior Court to approve.
The process would include a prohibition on potential bidders contacting stakeholders directly.
“This places a real and material chill on potential bidders, particularly those who may wish to begin discussions with the very stakeholders who are committed to a successful sales process before determining their level of interest,” the union’s court filing said.
The former parent has asked that the new sales process consider liquidating the company and that it be entitled to review and evaluate bids.
The salaried group said there is no urgency to begin a new sales process.
Instead, an environment that encourages a successful emergence of U.S. Steel Canada from CCAA protection must be created, the group said.
U.S. Steel Canada’s Lake Erie Works in Nanticoke, Ont., is regarded as a strong asset, as are some of its steel finishing operations in Hamilton.Report Typo/Error