Essar Steel Algoma has reached an agreement in principle for its refinancing.
The agreement is with Essar Global Fund Ltd. (EGFL), the investment fund that owns the company, which will provide up to $300 million in equity, along with a planned refinancing of the Sault Ste. Marie-based company.
“We are extremely pleased that we have reached a consensual agreement in principle with our significant unsecured noteholders and EGFL that, upon its consummation, will result in a recapitalized business, a refinanced capital structure, and financial flexibility to continue to make capital improvements,” company CEO Kalyan Ghosh said in a news release.
“The board of directors and management team have explored a number of alternatives,” Gosh added. “This path offers the best means to maximize long-term value while offering certainty of supply for customers and continued security for our employees, retirees, vendors and all other important stakeholders, which were key considerations.”
The company has said it will maintain normal operations through the transition.