Algoma Exits Creditor Protection, Sets CA$300M Reinvestment Plan
“Today, Algoma Steel is an independent and strong niche player, manufacturing a comprehensive mix of hot- and cold-rolled steel sheet and plate products not just for the Canadian markets, but also beyond,” said Algoma chief executive Kalyan Ghosh in a statement.
“When we take a look around at the domestic and international steel markets, what we see is a lot of room for growth for Algoma Steel.”
Formerly Essar Steel Algoma, the company entered creditor protection in 2015 amid falling steel prices and a dispute with its iron ore supplier, Cleveland-Cliffs Inc. A group of its lenders later stepped up to acquire the business.
During a press conference to announce its emergence, Ghosh told reporters that the new Algoma is starting out with an improved balance sheet, carrying only CA$370 million in debt. He also said the company is now overseen by a seven-member board made up of Canadians and Americans with expertise in steel, manufacturing and finance.
In announcing the end to its protection from creditors, the company said it will invest CA$300 million (US$224.1million) in its steelworks to expand capacity and product offerings.
“This investment will position Algoma Steel to meet the growing demand for advanced grades of steel and to support growth in related industries like shipbuilding, auto manufacturing, energy, mining and defense,” it said.
Ghosh said the Algoma’s exit marks the beginning of new chapter for the century-old steelmaker.
“We are coming out of this restructuring positioned for growth, thanks in great part to the determination and professionalism demonstrated by our employees in the face of uncertainty,” he said.
“We are eternally thankful for the patience of our suppliers and the confidence expressed by our customers through this process. We have also enjoyed incredible support from the federal, provincial and municipal governments as Algoma Steel worked hard to get back to being a cornerstone manufacturer not only in Sault Ste. Marie, but also in Ontario and Canada.”