TORONTO--(BUSINESS WIRE)--The majority of Essar Steel Algoma Inc.’s (“Algoma”) Term Loan holders and Senior Secured Noteholders (the “Senior Secured Lenders”) today commented on the January 28, 2017, letter addressed to the court-appointed monitor overseeing Algoma's insolvency proceedings by Essar Global Fund Ltd.
Dan Gagnier, spokesperson for the secured creditors, said, “The time for smoke and mirrors is over. Essar Global’s ownership, and its inability to manage the volatility of commodity pricing, is a principal reason why Algoma failed. It is also critically important to note that Essar Global was rejected from participating in the Algoma and Stelco sale processes multiple times given concerns regarding its financial wherewithal.”
Added Gagnier, “We have a committed proposal that can reduce the company’s debt by approximately C$1.5 billion, provide up to C$550 million of new capital and improve financial flexibility. Algoma has been through four restructurings in its history and it is our primary interest to help the company emerge from bankruptcy with the best chance of competing across any market cycle.”
Concluded Gagnier, “In addition, we are alarmed by the number and magnitude of claims being advanced against the Essar Global entities by parties involved with or affected by Essar Global, including creditors, banks, suppliers, regulators, former Directors, and local communities. We certainly have significant concerns regarding the conduct of Essar Global as it relates to the Algoma operations and the negative impact certain decisions and affiliate transactions have had on its stakeholders and the Sault Ste. Marie community. Many of these concerns have been raised publicly by the Algoma Monitor, within the Algoma CCAA process and in the ongoing oppression action commenced by the Monitor against Essar Global and its affiliates. We are hopeful that the Court process resolves these issues and allows for the successful recapitalization of Algoma for the long-term benefit of its various stakeholders, including employees and retirees.”
The terms of the Recapitalization Proposal are described in the Restructuring Support Agreement, dated as of September 15, 2016, among the Consenting Lenders and the Consenting Noteholders. Information regarding the Recapitalization Proposal and other relevant documents can be found on the Monitor's website at www.ey.com/ca/essaralgoma and on the Prime Clerk website at http://cases.primeclerk.com/EssarSteel.