Essar Steel Algoma’s debtor-in-possession financing has been extended into the winter of 2018.
The move comes one week after news surfaced the Sault Ste. Marie steel maker was ready to close a deal that would see ownership taken over by a consortium of lenders led by Deutsche Bank.
The global banking and financial services company, based in Germany, has helped keep Essar going for more than two years through the Companies’ Creditors Arrangement Act .
Essar was granted protection back in November 2015 under CCAA proceedings.
On Monday, an extension of debtor-in-possession financing was approved in provincial court.
The extension is in place until March 31, 2018. The new agreement includes a $175 million (American) commitment amount in order to fund projected peak liquidity need in the month of December
Also included in documents posted to the court appointed monitor's website, is a motion advancing due diligence from a group called MAGA Steel Corporation.
MAGA is looking to purchase Essar Steel Algoma. Its owned by beneficially owned by Local 2724.
It wants a hearing with the judge overseeing CCAA proceedings to discuss and potentially approve the purchase of the steelmill.
The motion calls for a case conference on the matter to be held on August 18.
