The City of Sault Ste. Marie says its reached a deal with the consortium that wants to purchase Essar Steel Algoma.
In a media release issued on Friday afternoon, the city said the agreement covers the steelmaker's pre-petition, post-petition and ongoing municipal tax obligations.
“The agreement is subject to the final approval of City Council and the SISP proponents successfully exiting the CCAA process,” reads a release from the city.
“While the terms of the agreement in principle will remain confidential until the matter is brought before Council in open session, the City can confirm that it is fair to the proponent, respectful of the rest of the community’s taxpayers and allows the City to maintain services at current levels.”
Back in May, it was announced Essar would resume monthly tax payments, totally $350,000 a month.
The interested buyer has upped that total to $500,000 a month.
"We're satisfied that we've negotiated an agreement that is really fair to our tax payers and that will leave us in a position where we won't have to cut services, or there won't be any negative effect on city staff," said Christian Provenzano, Sault Ste. Marie mayor.
"We're comfortable with where we're at. We think it's fair to the party that will be purchasing the asset if they're successful and most importantly we think it's fair to our tax payers."
Essar currently owes the city about $26 million in unpaid municipal taxes.
The steelmaker was granted protection back in November 2015 under Companies’ Creditors Arrangement Act proceedings.
