U.S Steel Canada has received a lifeline after it emerged that an investor has been found to inject $500 million into the failing company.
It has become clear that Bedrock Industries is Ontario’s preferred choice to restructure the metal producer with a cash injection, pension contribution and payments to the province of Ontario and U.S. Steel Canada’s former parent, United States Steel Corp.
According to its website, “Bedrock Industries is a privately funded holding company focused on owning and operating metals, mining and natural resources assets and related special situations.”
The company has two majority shareholders, Lindsay Goldberg and Alan Kestenbaum.
Its mission statement or philosophy is to “operate assets to maximize value creation and returns to our stakeholders through a differentiated approach to acquisitions, asset optimizations, operational enhancements, and restructuring, as well as an active and collaborative partnership with public and private investors.”
Bedrock’s criteria for investment include the need for existing assets that can generate immediate to near-term cashflow, favourable cost structures, sound property rights and dealings in safe jurisdictions and an ability to deploy Bedrock’s own expertise.
Pensions are the biggest cause for concern regarding the situation with U.S. Steel Canada. The Ontario government is a key stakeholder because of a $150-million loan it made to U.S. Steel to help finance a pension deficit when the company took over Stelco. It is thought that U.S. Steel Canada’s pension deficit is as much or more than $840 million.
Read the September 2016 issue of Business Review USA & Canada magazine