news-essar Steel Plant pic

Essar Steel Algoma will be back in a Toronto court on Tuesday looking for approval for a further adjustment to a financing arrangement which would push back the restructuring deadline to the end of August with an further extension to September 29th if certain prepayments are made.
This 4th amendment and extension of the maturity date of the Debtor-in-Possession financing agreement would be with the existing term lenders.
Terms of the agreement include the removal of an earlier requirement that Essar Steel Algoma achieve over 20-million dollars US in annualized cost savings.
The agreement includes an extension fee paid by Essar Steel Algoma of over 1.6-million dollars US with a further extension fee of 500-thousand dollars if the maturity date is extended to September 29th along with monthly mandatory prepayments ranging from 5-to-10-million dollars.
A report from the Chief Restructuring Officer also indicates that negotiations with the Steelworkers unions have been difficult and progress has been slow.  Steel prices have been favourable for a number of months but there is no certainty as to how long those prices will continue.