As expected, Essar Steel Algoma obtained an order from the Ontario Superior Court of Justice for an extension to the existing Debtor-in-Possession (DIP) financing facility to March 31 with the option of a 30-day extension.
Concurrently, the stay of proceedings has been extended to March 31. Both the stay extension and the DIP extension advanced unopposed. Essar Steel Algoma has been under court-ordered protection from creditors since 2015.
That protection was due to expire at the end of January as a sales and investment solicitation process has been underway to sort through and select a buyer of the Sault Ste. Marie steel works
“Although the company fully expects to generate sufficient funds for operating expenses during the extension period, we have not yet been successful in completing a transaction, and thus the extension was necessary,” said Essar Steel Algoma CEO Kalyan Ghosh in a Feb. 6 news release. “We continue to operate business as usual while we look to engage in meaningful discussions with the union in pursuit of an agreement that works for all parties.”