Oct 6 2004
Stelco Inc. today announced that it has elected to pursue the sale of wholly owned subsidiaries AltaSteel Ltd. and Norambar Inc., as well as the Company's 40 per cent ownership interest in Camrose Pipe Company. The Company has already announced its decision to seek buyers for Stelfil, Stelpipe and Stelwire.
Courtney Pratt, Stelco's President and Chief Executive Officer, said, "As in the case of previously announced asset sales, this decision was driven by the four-point strategy we announced in July. We've indicated in the past that we would sell assets outside the integrated steel business that will be the focus of the new Stelco."
The Company announced that it will seek the Court's approval for the sales as part of seeking Court approval for a broader capital raising process on October 19, 2004.
The Company is embarking on a capital raising process that will involve a cooperative approach with its stakeholders. The objective is to attract new capital to enable Stelco to proceed with critical capital expenditures. The proposed process would be conducted in two phases: the initial solicitation of preliminary indications of interest, followed by detailed due diligence involving a selected group of participants.
The process, if approved, will be overseen by UBS and its affiliates on behalf of the Company. Preliminary expressions of interest are expected by the end of November. Proposals are expected to include equity investments, combined debt and equity investments and acquisition proposals for the businesses for sale.
Courtney Pratt said, "The objective of this process is to raise new capital for the business and its planned capital expenditure program. That capital expenditure program will significantly strengthen the competitive cost base of the Company. It is a critical step in ensuring Stelco's future viability."
AltaSteel Ltd. was founded in 1955 and is located in Strathcona County near Edmonton, Alberta. Canada's first steel mini-mill, it purchases steel scrap and melts and rolls it into new steel products for the mining, manufacturing and construction industries. It had some 368 employees at the beginning of 2004. As well, AltaSteel owns a 50 per cent interest in a metals recycler (GenAlta Recycling Inc.) and a 50 per cent interest in a grinding ball manufacturer (MOLY-COP Canada).
Norambar Inc., located at Contrecoeur, Quebec, is also a mini-mill, producing billets and a range of bar products for the automotive, construction, mining and transportation industries. It had some 448 employees at the beginning of 2004. Norambar also owns a metals recycling business (Fers et Métaux Recyclés Ltée).
Camrose Pipe Company is located in Camrose, Alberta. Stelco owns 40 per cent of the company. The company operates two pipe mills, a large diameter mill and a small diameter mill.
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