STELCO RESTRUCTURING:

General unsecured creditors, salaried workers and pensioners vote in favour of plan

Two key stakeholder groups have voted to accept a restructuring plan for Stelco, taking the company closer to emerging from creditor protection with a new owner.

“This marks another milestone and I thank creditors for overwhelmingly supporting Stelco’s Plan of Arrangement, Compromise and Reorganization,” William Aziz, chief restructuring officer of Stelco, said of Thursday’s vote in Toronto.

“This is another step toward achieving the best — and only — outcome that will see Stelco emerge as a strong, independent Canadian steel producer.”

General unsecured creditors, of which U.S. Steel is the largest with $1.9 billion owed, voted 96 per cent in favour of a restructuring plan that would see American Venture Capital firm Bedrock Industries take over Stelco. Salaried workers and pensioners voted 99.9 per cent in favour of the plan.

Stelco spokesperson Joel Shaffer said the “next milestones would include reaching and ratifying agreements with United Steelworkers 1005 and … 8782.”

A key part of the negotiations for local 1005 workers will be over health-care benefits — known as other post-employment benefits (OPEBs). Retirees currently do not receive the benefits because of a court order. The current plan calls for those benefits to resume but at a rate of only 70 per cent of the previous entitlement for retirees who are members of local 1005.

That’s a major bone of contention for the local, says 1005 president Gary Howe, adding that wages and pension provisions are also key issues going into the talks.

“Things may go good. Things may go bad. Who knows? It’s up to them,” he said. “They’ve been focused on the salaried workers. They haven’t got back to us about our contract proposals.”

Local 8782 president Bill Ferguson says OPEBs and pensions are not as much of an issue for the Nanticoke workers. There are far fewer retirees from local 8782, and the restructuring plan is calling for workers of that local to receive 100 per cent of their OPEBs.

“The big thing is the cash. Everything is the money and how does this thing work,” he said.

Another key aspect to the deal is for a land trust to be set up on Stelco property that would be managed by the province and unions. More than 200 of the 325 hectares of land would be remediated and sold (or leased). Part of the profits would be used to finance pensions and health-care benefits for pensioners.

Passing on the property to a land trust would mean the new Stelco would not have to worry about environmental liability for parcels contaminated from more than a century of steelmaking.