The deal to sell U.S. Steel Canada Inc. to U.S.-based holding company Bedrock Industries Group LLC has been confirmed, a transaction that was proposed in September and supported by the Ontario government.
The United Steelworkers’ union calls it “the best opportunity to date” for the restructuring of the company, but there are still issues to settled, including the future of the company’s retirees.
Read: Union optimistic U.S. Steel agreement could lead to ‘good final deal’ for retirees
“We are cautiously optimistic that the agreement between Bedrock Industries and U.S. Steel can be a positive step towards a successful restructuring of the former Stelco operations in Hamilton and Nanticoke,” said Marty Warren, the United Steelworkers’ Ontario director, in a news release.
“However, there are outstanding issues that must be addressed, including negotiating new collective agreements with our local unions that secure jobs and provide protection to our retirees, as our members will have the final say through a ratification vote.”
Read: Judge rules against reinstating U.S. Steel Canada retiree benefits
If the proposed terms are approved, seller U.S. Steel Corp. will receive about $126 million in satisfaction of its secured claims as part of the Companies’ Creditors Arrangement Act, according to a news release. The terms will also include an agreement to provide mutual releases among stakeholders, including a release of all claims against U. S. Steel regarding the pension and other liabilities.
U.S. Steel Canada, formerly known as Stelco Inc., has been operating under CCAA protection since September 2014. It has been seeking a buyer and rejected a bid in August by a consortium set up by the Essar Global fund. In September 2016, a memorandum of understanding was announced between Bedrock Industries and the Ontario government to support the acquisition of U.S. Steel Canada.
U.S. Steel Canada has faced months of legal wrangling over issues such as pensions and retiree benefits. The company, which faces a large pension shortfall, cut off retiree health benefits last year as part of the CCAA proceedings.
Read: ‘Life and death matters’ at stake as U.S. Steel retirees seek benefits reinstatement