U.S. Steel Canada moving quickly to sell Hamilton assets
United States Steel Corp's (X.N) Canadian unit is preparing to quickly put its Hamilton assets up for sale and also hopes to run an auction process for its operations on Lake Erie, court filings showed on Tuesday.
The steelmaker's Canadian subsidiary filed for protection from its creditors last week and said it was considering asset sales. The proposed auctions do not mean that a sale will necessarily be completed.
In an affidavit, U.S. Steel Canada President Michael McQuade said a sale process for the Hamilton Works is an "important and sensible step" which will give the company and its stakeholders "a better understanding of the potential options available."
Much of U.S. Steel Canada's value is seen residing in Lake Erie, with years of job cutbacks, environmental liabilities and the weight of a massive retiree base weighing on the worth of the Hamilton assets.
The restructuring process could affect more than 14,000 retirees who depend on U.S. Steel pensions. The Canada unit has a pension fund deficit of more than $750 million.
The filings, posted online, include a timetable agreed to by the Canadian unit and its U.S. parent, which is responsible for interim financing during restructuring.
The timetable says a sale and investment solicitation process for the Hamilton Works should start within 60 days of the Canadian unit's filing for creditor protection.
A similar process for the Lake Erie works is due to start by March 15, 2015. Any sale, refinancing or investment should close no later than Oct. 31, 2015.