Touchstone Exploration Inc. press release
Stelco announces filing of 38th Monitor's Report
TSX - Toronto Stock Exchange · Oil · Natural Gas · Natural Gas Liquids · Canada
HAMILTON, ON, Sept. 30 /CNW/ - Stelco Inc. (TSX:STE) today announced that the Thirty-Eighth Report of the Monitor in the matter of the Company's Court- supervised restructuring has been filed. The full text of the Report can be accessed through a link available on Stelco's web site. The Report contains previously-disclosed information on the terms, conditions and other features of the previously-announced agreements entered into by the Company with each of Tricap Management Limited ("Tricap"), the Province of Ontario, the USW International and USW Local 8782. These and other details relating to the agreements are also contained in materials filed with the Court. The Monitor also discusses the break fees payable to Tricap under its agreement. The Monitor expresses the view that the break fees are reasonable given, among other factors: the Monitor's assessment of prevailing market terms for break fees for CCAA financings; the certainty of securing financing to implement Stelco's restructuring plan with minimal due diligence risk and conditionality; the view that the cost is worth the benefits conveyed by the above-noted agreements, and the fact that Tricap is required to commit significant capital resources until the restructuring plan implementation date without certainty as to the completion of the financing. The Report conveys the Monitor's view that the terms, fees and costs of the secured revolving term loan and the standby agreement under the Tricap agreement are reasonable in light of the benefits and liquidity reserve provided to Stelco. The Monitor also reports that certain affected creditors or their representatives have advised the Monitor to express concerns and/or opposition to the Company's restructuring plan. The Report observes that the affected creditors that have contacted the Monitor directly or indirectly likely represent over 50%, by dollar value, of the claims of affected creditors. The Monitor notes that those creditors have indicated that, if a vote were held today, they would vote against the plan. The Report notes, however, that a number of the affected creditors that have contacted the Monitor have also indicated their belief that the filing of the plan was a productive step and provides a framework within which to attempt to negotiate a consensual solution. The Monitor also notes that the above-noted concern or opposition expressed by affected creditors comes prior to their being provided with an information circular concerning the Company's restructuring plan. The Monitor expresses the view that the Company will have the opportunity to continue discussions with the affected creditors in the period prior to the meetings that will be held to consider and vote on the plan. The Monitor observes that the above-noted agreements offer Stelco a pension funding solution, committed CCAA exit financing and labour co- operation. Without these agreements, the Monitor notes that Stelco would likely find itself back in the midst of stalled negotiations. For these and other reasons, the Report recommends that the Court authorize Stelco to enter into the restructuring agreements with each of the Province, Tricap and the USW.
About Stelco
Stelco Inc. is a large, diversified steel producer. Stelco is involved in major segments of the steel industry through its integrated steel business, mini-mills, and manufactured products businesses. This news release may contain forward-looking information with respect to the Corporation's business operations, financial performance and conditions. Actual results may differ from expected results for a variety of reasons including factors discussed in the Corporation's Management's Discussion and Analysis section of the Corporation's 2004 Annual Report. To learn more about Stelco and its businesses, please refer to our Web site at www.stelco.ca.
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