Essar Steel Algoma is 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 almost two years through the Companies’ Creditors Arrangement Act .
Under the proposed deal, Essar would transfer 78% of the restructured equity to Deutsche Bank and the remaining 22% would be held by another group of investors.
The proposed deal needs approval from an Ontario court that is overseeing Essar's creditor protection proceedings.
The company is seeking to extend its creditor protection to next march.
The deal is also contingent on negotiations with the steelworkers union.
"Our concern is that we are looking for someone who is looking to run the company and have it develop through the years to come,” said Mike Da Prat, Steelworkers Local 2251 president.
“We're not really interested in just making another hedge fund richer."
The steelmaker was granted protection back in November 2015 under CCAA proceedings.
