U.S. Steel Canada set to put Hamilton and Nanticoke plants up for sale again
Company needs court approval to launch second attempt to find a buyer
U.S. Steel Canada (USSC) will be in court on Tuesday to make the case for putting its Hamilton and Nanticoke plants up for sale again.
The company will make a motion to enter the sale and investment solicitation process (SISP). That would give it until Oct. 31 to sell to off all or parts of the production Hamilton and Nanticoke. And according to United Steelworkers (USW) union reps, there are at least four companies interested in buying.
The move would mark a second attempt at finding a willing buyer, a move agreed on in October, when the company severed from its American parent company. That deal halted the first and ultimatley unsuccessful attempt to find a buyer. If the court approves, the new process USSC would get non-binding letters of interest from companies by Feb. 29.
There's room in Canada for a Canadian steel industry.- Gary Howe, president, United Steelworkers local 1005
The SISP would let the company "solicit interest in and opportunities for a sale of or investment in all or part of its assets and business operations, including, without limitation, Hamilton Works and Lake Erie Works," court documents show.
Meanwhile, USSC's former American parent company, U.S. Steel, is asking the court to consider the liquidation value of the company as part of its deliberations.
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This is just the latest chapter in the story of the embattled company, which took over Hamilton and Nanticoke operations in 2007.
The company entered creditor protection in 2014, and in the fall, got court permission for interim measures that included suspending pension and health benefits to some 20,000 retirees. Justice H. J. Wilton-Siegel also granted USSC permission to sever from its parent company.
USW has met with four companies interested in buying the Canadian plants, said Gary Howe, president of local 1005. The talks are preliminary. "Nothing has gone that far."
But it does show that there's interest in buying the plants, he said. The union wants to see a buyer invested in Canada's steel industry with a focus on "jobs, pensions and OPEBs." The latter stands for other post-employment benefits, such as retiree health benefits.
"There's room in Canada for a Canadian steel industry," Howe said. "We want to see it sold or operated by somebody that has the best interest for the employees and retirees. We want to see it sold to someone who shares those values."
The union initially talked about buying the plants itself and operating under the name Stelco. Howe said that's still an option, but "not our first choice."
USSC will also start a six-day claims trail on Thursday, when the court will determine whether U.S. Steel is owed $2.2 billion. That decision will determine the impact the debt has on the restructuring process.