Essar Steel Algoma Inc. will have sufficient liquidity to complete capital improvements and buy enough raw materials to get it through the winter after the Ontario Superior Court of Justice approved its restructuring plan.
"This plan provides for a comprehensive capital infusion, a substantial deleveraging of our balance sheet and the refinancing of all of Algoma's senior secured debt," Kalyan Ghosh, chief executive officer of the Sault Ste. Marie, Ont.-based company said in a statement.
The restructuring plan was approved by about 92 per cent of the holders of the steel maker's 9.875-per-cent senior notes.
Essar Global Fund Ltd., part of the Essar group of India, which is the ultimate parent of Algoma, will provide a $100-million (U.S.) cash infusion to give the steel company enough liquidity to make the capital improvements and buy iron ore, coal and other raw materials necessary to make steel.
Mr. Ghosh said Algoma's order book is full and it is taking orders for November production.
The company generated $30-million (Canadian) in earnings before interest, taxes depreciation and amortization in August and $22-million in July.
Earlier this year, Algoma considered a third bankruptcy protection filing in a quarter-century as it faced debt of more than $1.2-billion and annual interest expenses of $133-million.
The company was also battered by the unusually severe winter weather, which delayed shipments of raw materials designed to replace stockpiles built up before winter.