The Government of Ontario has filed a notice of objection with the court over U.S. Steel Canada’s proposal to obtain debtor-in-possession financing for its operations using a loan from its parent company, U.S. Steel.
“Ontario supports a restructuring that is based on consensus and that gives the best value to employees, retirees, creditors and communities,” says Finance Minister Charles Sousa.
However, the province is objecting to certain parts of U.S. Steel’s proposal to finance its Canadian operations as U.S. Steel Canada restructures. The province says the proposal could negatively affect the company’s employees and pensioners.
The province is a creditor of U.S. Steel Canada pursuant to the $150-million Province of Ontario loan agreement. It also has an existing agreement with U.S. Steel that requires the parent company to guarantee certain payments on its pension obligations.
“The province is working to ensure that the company lives up to these obligations, does not put the repayment of inter-company loans ahead of its pension obligations and continues to have responsibility for any environmental liabilities associated with its Canadian operations,” he adds.
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