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Essar Steel Algoma thinks it has a buyer

Essar Steel Algoma announced June 17 that it has entered into an asset purchase agreement for the sale of the Sault Ste. Marie steel works to a consortium of bidders headed up by KPS Capital Partners, a New York-based private equity firm.
Northern Ontario Business Staff
Algoma(2)
Essar Steel Algoma announced June 17 that it has entered into an asset purchase agreement for the sale of the Sault Ste. Marie steel works to a consortium of bidders headed up by KPS Capital Partners, a New York-based private equity firm.

Essar Steel Algoma announced June 17 that it has entered into an asset purchase agreement for the sale of the Sault Ste. Marie steel works to a consortium of bidders headed up by KPS Capital Partners, a New York-based private equity firm.

The company said it was serving a motion on the same day with the Ontario Superior Court of Justice seeking approval of the assets.

In a release, Essar said KPS has a “track record for transforming businesses into vibrant independent companies.”

The consortium bid includes cash consideration and the “assumption of certain liabilities.”

Finalizing the sale is subject to conditions being met related to employee pension plans and collective agreements, capital projects and environmental matters.

“We are pleased that we have reached this point in the CCAA process and look forward to exiting. The new company formed by the consortium will securely position New Algoma with a capital structure to sustain all phases of the steel cycle,” said company president-CEO Kalyan Ghosh in a statement.

“We are also well within the timeline set out in our restructuring plan.”

The transaction is slated to close on Aug. Until then, the company said it’s “business as usual.”

Essar Steel Algoma filed for creditor protection under the Companies Creditors Arrangement Act on Nov. 9, 2015. Ernst & Young is the court-appointed monitor.