Essar Steel Algoma said it’s received “several bids” following the end of phase one of the Sale and Investment Solicitation Process (SISP) on April 1.
The company declined to name the exact number or identity of the bidders interested in investing in the Sault steel plant, but said the process will now move into its second phase.
“In terms of process, now that phase one has closed, the company, in consultation with its advisors and the monitor, reviews the bids and determines those bidders who qualify to advance to phase two,” said Brenda Stenta, manager of corporate communications for Essar Steel Algoma, in an email.
“Those bidders who advance will be provided access to due diligence materials, and have opportunity to meet with management and tour the facility,” Stenta added. “This information will assist them in determining their final bid.”
Though a deadline for phase two has not yet been determined, the overall process is slated to close by Aug. 31, she noted.
Essar Steel Algoma filed for creditor protection under the Companies Creditors Arrangement Act on Nov. 9, 2015. Ernst & Young, based out of Toronto, was appointed by the court as the independent, third-party monitor to oversee the process.
The goal is either to find a buyer for the steel plant, or to find an investor that will provide financing to restructure or recapitalize the business, allowing creditors to recoup money owed to them by Essar.
Essar has cited a trio of reasons for its low performance and current financial straits: poor steel markets, an influx of imported product, and the termination last October of its iron ore supply agreement with Cliffs Natural Resources.
Essar Steel Algoma is currently operating with US $200 million in debtor-in-possession financing, which expires on Sept. 1.
