A company formed by India-based Essar Global announced Tuesday that it has submitted an offer to buy U.S. Steel Canada.
A press release from Ontario Steel Investments Limited says that the offer includes the company assuming the former Stelco’s pension plan “in totality,” and a “commitment to provide substantial post-employment benefits” to the company’s active and retired employees.
“We are very excited to put this bid forward for Stelco; it is another important step in advancing our vision of creating a true Canadian steel champion,” the company said in a statement. “Our offer is the culmination of 18 months of discussions with all of the key stakeholders to find the best outcome for the business.
“It will provide maximum benefit to all involved, most importantly Stelco’s active and retired employees who depend on their pensions and post-employment benefits, as well as a more secure day-to-day operating environment.”
The total proposed purchase price wasn’t disclosed. The offer includes the assumption at closing of $954 million of employer liabilities under U.S. Steel Canada’s pension plans, and a commitment to contribute $25 million a year to benefits for active and retired employees, which is not full funding.
Essar, or Ontario Steelworks, has been the preferred bidder from the union’s perspective for both the former Stelco plants. Ontario Steelworks is also bidding for Essar Algoma in Sault Ste. Marie, and says it has plans to combine both companies.
“What we’ve said constantly about Essar, is that they’re meeting our three big demands,” said Local 1005 president Gary Howe.
That includes pension obligation, ongoing benefits for retirees and a commitment to keep the Hamilton plant alive.
“The concern for us (in the sale process), is ‘What’s going to happen in Hamilton?'” Howe said. “I honestly believe there’s a lot of potential.”
The company submitted the offer in the U.S. Steel Canada process on Aug. 5.
Both offers would require an agreement with the United Steelworkers, which has current and retired members at both Ontario steel companies.
“Ontario Steelworks remains in active discussions with the United Steelworkers Union regarding its Offer for Stelco, and we look forward to continuing discussions with the Province of Ontario to ensure the long term interests of the community and the environment are protected,” the company said in a statement.