Sidelined bidder raises 'concerns' about U.S. Steel Canada sale process
Essar Global describes itself as a 'strategic' would-be buyer for the former Stelco and Algoma mills
A company that has been sidelined in the competition to buy U.S. Steel Canada expressed "concerns" over the sales process for that company and another Ontario steel company.
Unionized workers have called for the Ontario government to intervene in the sale process to give that company, Essar Global, another chance.
But Bloomberg reported Tuesday that the Ontario government is the reason the company was knocked out, both in Sault Ste. Marie with Algoma Steel and in the case of U.S. Steel Canada, formerly Stelco.
All of the negotiations in these sale processes for companies in bankruptcy protection are supposed to be private. But the names of the bidders in both processes have been widely reported, and details about negotiations have been slipping out.
Essar has released a public statement expressing concerns "with the Algoma process and its potential influence on the Stelco process to date."
Kelsey Ingram, a spokesperson for the Ontario Ministry of Finance, did not address a question about the province's rejection of any particular bidder. She said the provincial government is involved in the process in order to "support the best possible outcome for pension members and other stakeholders."
The province has had "multiple meetings" as part of the sale process, she said. But she declined to share any specifics.
"This process also includes certain confidentiality requirements and we must respect those requirements," Ingram said. "Therefore, we will not make any further comment on the ongoing deliberations concerning U.S. Steel Canada."
Union's favoured bidder
Essar is the preferred bidder from the union's perspective.
"Essar Global has indicated it is more committed than other bidders to protect jobs, pensions and retiree benefits," said Ontario director for United Steelworkers, Marty Warren.
Even though it's been said to be out of the running, the Essar bid could still be considered if the company decides to take it straight to court.
"Our hope is that going forward these concerns will be addressed so that all alternative bidders are properly considered and all stakeholder interests and concerns are fully addressed especially the workers, pensioners and the communities involved," the statement from Essar continued.
There are many factors for interested bidders to balance when they're considering buying legacy steel companies like the former Stelco in Hamilton and Nanticoke, and like Algoma in Sault Ste. Marie.
They must work out arrangements for worker and pension liabilities. They must navigate both ongoing environmental concerns as well as the liabilities that stretch back decades for lands that will need remediation some day. For all of it, they need court approval, approval from company shareholders, and approval from the province.
"Essar Global remains committed to steelmaking in Ontario," the company's statement continued.
It pitched itself as a "strategic" buyer for the two struggling steel companies. "This will ensure steelmaking and jobs are maintained in Ontario for years to come," Essar said.