Skip to main content

A crucible once used to carry molten steel is seen outside the Essar Steel Algoma plant on Nov. 13, 2015 in Sault Ste. Marie, Ont.Kenneth Armstrong/The Globe and Mail

The former parent of Essar Steel Algoma Inc. says it is disappointed the company has agreed to sell its assets to private equity firm KPS Capital Partners Inc. and Algoma's term lenders.

Essar Global, which bought Algoma in a bidding war in 2007, is bidding for U.S. Steel Canada Inc. Both Essar Algoma and U.S. Steel Canada are operating under the protection of the Companies' Creditors Arrangement Act.

"During Essar Global's ownership of Algoma, Essar Global invested almost $800-million (U.S.) in its operations, supported the business through several downturns and established strong relationships with employees and the local community," Essar Global said in a statement Tuesday.

Other bidders for Essar Algoma did not have an adequate opportunity to participate in the bidding process the India-based group said, noting that improved steel prices permitted more time to pursue alternatives other than the sales and investment solicitation process.