Stelco set for ownership change Friday
Bedrock Industries deal to end two years and nine months of creditor protection
Details are falling into place for Bedrock Industries to become the new owner of Stelco on Friday, a company spokesperson says.
“Things are still on track. They are still working out the fine details with the various stakeholders and getting all those agreements put to bed,” said Stelco’s Trevor Harris.
“It could happen first thing in the morning (on Friday) or it could drag on to later in the day.”
Once the deal is closed, he said, a news release will be issued and “beyond that I don’t anticipate a whole lot of fanfare.”
Friday’s completion will end two years and nine months of creditor protection under Companies’ Creditors Arrangement Act (CCAA) rules.
The estimated $500-million deal will mean the American venture capital firm will take over Stelco operations in Hamilton and Nanticoke.
It will not have liability for historical contamination at Stelco property because a provincially backstopped land trust called LandCo will take over ownership of the 818 acres on Hamilton’s bayfront. Stelco will rent one-third of the property while the land trust embarks on a multi-year quest to remediate and develop the parcels to raise money to put toward pension costs and benefits for retirees.
The company will contribute $160 million to $430 million to company pension funds — depending on business results — but that will be all of its commitment toward a $1-billion unfunded liability.
A spokesperson for Bedrock Industries did not respond to a request for comment.
Bedrock has been tight-lipped through months of negotiations, consistently refusing requests for interviews.
However, company frontman David Cheney, did briefly speak at the Bay Area Economic Summit on Tuesday.
He answered questions from McMaster University professor Marvin Ryder in front of an audience for 15 minutes.
In an interview Wednesday, Ryder recalled Cheney saying the new owners plan to keep company president Michael McQuade because they feel he is doing a good job. Cheney noted that while Bedrock is a new company, its owners have more than 75 years experience in the metals and mining sector.
And they are looking to invest, claiming to have access to $2 billion in funds to do it.
“He’s saying all the things you would want him to say. Will he live up to it? Time will tell,” Ryder said.
Meanwhile, a delegation of local MPs and the federal steel caucus travelled to Washington Wednesday for a series of meetings to lobby for the Canadian steel industry against protectionist sentiments in the U.S. and plans by President Donald Trump to renegotiate the North American Free Trade Agreement (NAFTA).
Hamilton East-Stoney Creek MP Bob Bratina, who is co-chair of the steel caucus, said in an email the delegation had briefings at the Canadian embassy, followed by discussions with the president of the American Iron and Steel Institute, the chairs of the congressional steel caucus and union representatives.