Aug 22 2005
Stelco Inc. today announced that it has entered into a definitive agreement for the sale of the assets of Stelpipe Ltd. to Romspen Investment Corporation ("Romspen"), an independent non-bank lender and financier based in Toronto.
The purchase price was not disclosed. As in past asset sale transactions during its restructuring process, Stelco will ask the Court to seal such information until the sale has closed. The transaction is subject to certain conditions, including Court and lender approval. It is anticipated that such approval will be sought by early September and that the matter will close at or about the end of October.
Romspen has advised that it will assign the agreement to a new, wholly-owned subsidiary, Lakeside Steel Corporation Limited ("Lakeside"). Romspen has also stated that it will continue Stelpipe's current operations in the current facilities through Lakeside and will retain almost all of Stelpipe's approximately 470 workers, about 420 of whom are hourly employees represented by the Canadian Auto Workers.
As part of the transaction, Stelco will be assuming all of the pension and benefit obligations respecting Stelpipe's retirees. Stelpipe employees and retirees will be provided with additional information in the near future about the transaction and how it affects them.
Courtney Pratt, Stelco President and Chief Executive Officer, said, "This transaction is good news for Stelpipe, for its employees and retirees, and for Stelco. It provides Stelpipe with ownership that views its business as a strategic asset. It provides Stelpipe employees and retirees with increased certainty going forward. And it assists Stelco in focusing on the integrated steel business at the heart of the strategic plan announced in July 2004. On behalf of everyone in the Stelco community I want to thank Stelpipe and its employees for their important and ongoing contribution to the Company."
Stelco had announced on August 3, 2004 that it would pursue the sale of Stelpipe as part of the Company's asset sale process. Stelco informed Stelpipe employees on June 3, 2005 that a letter of intent had been signed with Romspen. The 32nd Monitor's Report also provided information in this matter. Since then, the parties have addressed outstanding matters and negotiated the terms of the definitive agreement announced today.