This news is not unexpected but still very troubling. | 35 minutes ago | Vote0 0 U.S. Steel Canada filing for bankruptcy protection US STEEL CANADA John Rennison,The Hamilton Spectator U. S. Steel Canada is filing for bankruptcy protection. Hamilton Spectator By Steve Arnold U. S. Steel Canada is filing for bankruptcy protection. Union leader Rolf Gerstenberger, of United Steel Worker Local 1005, confirms the company was to go to court in Toronto late Tuesday to file for protection under the Companies Creditors Arrangements Act. TOPIC: Steeltown Thats the same legislation Stelco used in 2004 to rearrange its financial affairs, a process that led three years later to the sale to U. S. Steel. Weve been told the U. S. Steel executive board has made this decision and they have financing in place, Gerstenberger said. Our position remains the same as it was last time: this is legalized theft. Union leaders have been called to a meeting with the company at 10 a.m. Wednesday to learn details of the filing. In a news release issued just after 6 pm the company said the decision is part of a three-pronged strategic move to support its transformation after years of heavy losses. U. S. Steel Canada has recorded a loss from operations in each of the last five years, with an aggregate operating loss of approximately $2.4 billion, or in excess of $16 per diluted share, since December 2009, the company release said. Additionally, U. S. Steel Canada represents approximately $1 billion of U. S. Steels consolidated Employee Benefits liability as of June 30, 2014. The company said the Canadian arm and its subsidiaries will be deconsolidated from the parent companys financial statements as of Tuesday – a move thats expected to increase the companys reported net income for the six months ended June 30, 2014 by $26 million, or 16 cents per diluted share. U. S. Steel has agreed to provide U. S. Steel Canada with $185 million Canadian of secured debtor-in-possession financing (DIP Financing) to support current operations through the end of 2015 and allow U. S. Steel Canada to continue operating and serving its customers. A planned restructuring will allow U. S. Steel Canada to operate and compete more effectively. We know this was not an easy decision for U. S. Steel Canadas independent directors, stated U. S. Steel President and CEO Mario Longhi. U. S. Steel Canada has asked the court for an order allowing it to continue to operate while exploring restructuring alternatives – to pay its suppliers and employees and to continue to service its customers. We believe these actions will provide longer term stability for U. S. Steels employees, suppliers and customers. The company said the filing amounts to a default under the terms of a special pension funding deal it has with the Ontario government. That makes a $150 million provincial loan payable. Failing to pay that debt would also trigger defaults in other company debts. More to come. sarnold@thespec 905-526-3496 | @arnoldatTheSpec U.S. Steels history in Hamilton August 2007 — Stelco is sold to U.S. Steel for $1.9 billion in cash and assumed debts. The Stelco name vanishes as the local operation is renamed U.S. Steel Canada. November 2008 to March 2009 — U.S. Steel lays off more than 700 Hamilton workers and cuts production in half as global economic meltdown affects steel industry. March 2009 — The company shuts down most of its Canadian operations, claiming demand for steel had collapsed. It also locks out workers in Hamilton and Nanticoke to enforce its demands for radical changes to its pension plans. The federal government — under then industry minister Tony Clement — takes the company to court seeking fines of $10,000 a day for broken employment and production promises. November 2010 — U.S. Steel shuts down its furnace completely, cutting production in Hamilton. About 900 Hamilton workers are locked out in a dispute over pensions. August 2011 — Councillors vote not to give the company an open-ended extension to its sewage treatment agreement with the city. Without that deal, the company says it cannot continue to operate its coke oven battery and if thats entirely shut down, it could lead to the final closure of the plant. October 2011 — The lockout ends as Local 1005 in Hamilton ratifies a contract with U.S. Steel. Of the 900 workers locked out, only about 650 return. The company will not restart its blast furnace and steelmaking. December 2011 — The federal government drops its suit against U.S. Steel. In return, the company inks an agreement promising new investment of at least $50 million in its Hamilton and Lake Erie plants by December 2015. They also agree to make financial contributions of $3 million toward local community and educational programs. Jan. 31, 2012 — U.S. Steel announces an improvement in its financial position with a loss of $68 million — and its intentions to idle steelmaking in Hamilton in 2012. January 2013 — U.S. Steel announces steel demand is still too low post-recession to justify restarting the blast furnace. October 2013 — U.S. Steel announces it will shut down iron and steelmaking at the Hamilton facility. Coke making will continue. March 2014 - U.S. Steel executives wont talk publicly about their plans for the future of the companys Hamilton plant and 2,000 Canadian jobs. Meanwhile, U.S. Steel turns a quarterly profit, but warns the second quarter outlook is not good, especially for the division that includes its Canadian operations. June 2014 – An analyst tells Hamilton it faces a huge tax hit if U.S. Steel pulls out of the city at the end of next year. The analyst said the city gets $22 million a year from the company and its retirees who live here. July 2014 - U. S. Steel is planning to restructure its Canadian operations. Leaders of the union locals at the Hamilton and Lake Erie plants were invited to a meeting in Burlington recently to be briefed on the plan, but were told nothing after refusing to sign a confidentiality agreement. July 2014 - U.S. Steel posted another big loss, but not as big as analysts had feared. The company reported a second-quarter loss of $18 million Tuesday, sharply less than the $60 million Wall Street stock watchers had predicted. The company reported a $78-million loss for the same period last year.
Posted on: Tue, 16 Sep 2014 23:15:23 +0000
Trending Topics
Recently Viewed Topics
© 2015