More than five years after it first applied for protection from its creditors, the company once known as Essar Steel Algoma Inc. remains under court-ordered insolvency protection.
Two years after the assets of the Sault's steel mill were bought by a consortium of secured creditors, two years after Essar Steel Algoma quietly changed its name to the ignominious Old Steelco Inc., a New Year's Eve deadline for wrapping up the company's insolvency proceedings will not be met.
On Friday in Toronto, Superior Court Justice Glenn Hainey agreed to allow another six months to finally wrap up Old Steelco's Companies' Creditors Arrangement Act file.
Once mighty, now poor as a church mouse, Old Steelco will continue to be protected from its creditors until June 20, 2021.
Pot-stickers holding up closing of the file include the need to dispose of these former Algoma Steel mining properties:
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Wawa area: Macleod mine site, Firesand and Grace properties
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North of Wawa: Goudreau, Magpie and Iron Lake properties
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Sault Ste. Marie area: Morrison-Cowie and McAuley properties
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Northern Ontario: Nipigon Forest Reserve and Eagle Island properties
When the Sault's steelmaking operations were sold two years ago, the legacy mine properties were excluded from the transaction.
Most of the properties have been owned by Algoma since the early 1900s.
In 2017, the court-appointed insolvency monitor advertised three of the old mines on mine property marketing websites.
"Several expressions of interest were received, but Algoma Ferrous Industries Inc. [AF] was the only bidder that submitted an offer providing any material proceeds," the monitor said in a report written last week.
"As a result, the applicants engaged in extensive negotiations with AF, which culminated in a sale agreement dated October 16, 2018. However, this sale agreement was terminated on November 26, 2018 in accordance with its terms after AF failed to complete the contemplated transaction prior to the closing of the 2018 sale transaction."
Since then, Algoma Ferrous has been negotiating with the province on environmental issues.
The monitor reports that a deal to sell the properties is now imminent.
A number of tax issues must also be resolved before the insolvency file can be closed.
– SooToday
