Stelco shares higher on 1st day of trading
Firm to use money for capital investments, pension payments, product offerings
Stelco Holdings Inc. shares gained almost 13 per cent on its first day of trading on the Toronto Stock Exchange.
Stelco priced its initial public offering at $17 a share to pull in an expected $200 million. Its stock finished up $2.20 at $19.20 on the TSX.
The Hamilton-based steel company says it plans to use the money for capital investments, pension payments, and to increase its offerings in specialized steel products.
It wants to grow its offerings in galvanized steel, in part to regain a foothold in the nearby auto industry where it used to have a significant presence.
The company says it could also invest in co-generation to reduce its reliance on Ontario's high electricity costs, and thereby reduce operating costs in the power-intensive industry.
Stelco's history goes back to 1910 but in recent years has been beset by financial problems. It went into creditor protection in 2004 and was sold as a subsidiary to U.S. Steel Co. in 2007, then went back into creditor protection in 2014 before being sold to Bedrock Industries L.P. in late 2016.
At the end of June, Stelco emerged from creditor protection under its original name, having eliminated $3 billion of debt and about $1.4 billion of pension and other retirement obligations.