Stelco looking to raise $200M in IPO, pricing shares $16-$18
Stelco Holdings Inc. is looking to raise $200 million in its initial public offering, according to documents filed with securities regulators.
The steelmaker is expecting to price its shares between $16 and $18. If an over-allotment option is exercised in full, the offering will increase to $230 million.
Stelco announced its intention to return to the stock market last month with plans to spend the money raised on capital expenditures and pension obligations.
The IPO comes after two restructurings under court protection from creditors, the most recent completed this past summer.
Bedrock Industries acquired the company’s operations in the most recent process and restored the Stelco name.
It is expected to hold a roughly 86.5 per cent interest in the company following the offering, based on the midpoint of the estimated price range for the shares.
Bedrock is proposing to use the funds raised from the IPO to:
Invest $65 million to $85 million in the Lake Erie Works blast furnace while increasing the facility’s steelmaking capacity.
Upgrade the company’s refinishing capacity in Hamilton by restarting a “temper mill” and installing “batch annealing furnaces” to help make steel for the next generation of automobiles.
Build co-generation facilities to capture byproduct gases in Hamilton and Nanticoke to “substantially reduce” reliance on the Ontario power grid.
Upgrade dock facilities at its Nanticoke facility to accommodate barges.
Complement existing steel finishing in Hamilton and Lake Erie with Bedrock-joint ventures in the United States such as D.C. Chrome Ltd., in which the venture capital firm has a 50 per cent interest.