As part of Essar Steel Algoma Inc.’s refinancing and recapitalization efforts, the company has entered into confidential discussions with investors representing approximately 70 per cent of the 9.875 per cent US$385 million senior unsecured notes. Algoma also has executed non-disclosure agreements and is engaged in discussions with advisors representing an ad hoc group of holders of 9.375 per cent US$400 million senior secured notes.
According to a news release, the purpose of these discussions is to ensure a permanent capital structure for the company and to strengthen the balance sheet for the benefit of the stakeholders. Given the constructive nature of the ongoing discussions, Essar has elected to utilize the grace period for the June 15 interest payment. Essar’s debt agreements allow for a 30-day grace period to make this payment.
As the company continues these discussions, it is continuing normal business operations, providing the same service meeting ordinary course obligations, such as employee pay and benefits, regulatory obligations, and trade, vendor and similar obligations.