Sault Ste. Marie steel company Algoma one step closer to final sale
Numbered company in B.C. will purchase company's assets, but not its debt
A judge has approved an agreement in principle to sell Algoma in Sault Ste. Marie to a numbered company in British Columbia.
The move will allow the steel company to move out of creditor protection and paves the way for a final sale at the end of September.
It has been a complicated deal, three years in the making, said CEO Kalyan Ghosh.
A numbered company will purchase the assets, but not the debt, of the old company. That means 125 businesses owed about $25 million have little chance of being repaid.
"We had our problems with debt. This is getting resolved and we are in good hands for now to start working so we can be sustainable for years to come," Ghosh said.
That frees the company to attract investors.
Mike Da Prat, the president of United Steelworkers 2251 representing roughly 2,400 hourly workers, said he's pleased with the stability that the agreement in principle brings.
"We're definitely happy about the milestone. It will certainly be a relief at the end of September when the deal is finalized."
Labour agreements are in place and will take effect upon the final sale, Da Prat said.
The provincial and federal government still have to rubberstamp the deal.