New ownership deal reached for Sault steel plant
CTV News has learned that the steel plant in Sault Ste. Marie could be out of creditor protection and in the hands of new owners this fall.
The former Essar Steel, now operating as Algoma, is ready to emerge from the long process, pay its back-taxes to the city, and move forward under new ownership.
Term lenders, the union and the city have all agreed to a new deal, which would see the plant sold and the company removed from creditor protection.
Christian Provenzano is the mayor of Sault Ste. Marie.
"I think it means a few things. It represents some stability. I think there will be a positive reaction to it. Two, is I believe and have reason to believe, there will be significant capital investment that's going to be made in the plant. So, for the next few years we are going to see a lot of capital investment, lots of investment coming into the community to reinvigorate the assets and that's positive." said Provenzano.
Companies and lenders who have been propping up Algoma during this process would be the new owners.
The mayor says the proposed new owners have agreed to pay the city some of the $20-million owed in taxes, but he wouldn’t say how much the city will get, only that it will be announced at an upcoming council meeting.
"It will come in mid-August and it will be very public, and we will walk the community through the tax recovery. We did very well. We set out to make sure we recovered as much as the arrears as we could, and we did a good job in that respect and I’m really looking forward to talking to the community about it." said Provenzano.
In the new agreement, it's being recommended that the unsecured creditors, like suppliers and contractors in the city who are owed millions of dollars, will not see a penny.
Some of the supply companies were contacted for comment, but none wanted to go on camera because they still do business with Algoma. None are happy with the news.
A judge will hear the recommendations in three week with a view to having this all wrapped up by late September.