Century-old steel producer Algoma Steel (ALG-T) is breathing a sigh of relief after the third time proved to be the charm for its debt restructuring.
On Monday, Algoma announced that it has filed a third amended and restated plan of arrangement and reorganization with the court under the Companies’ Creditors Arrangement Act (CCAA).
The latest changes result from negotiations with key stakeholders over the weekend. The new plan calls for the interest rate on the new U.S.$125-million notes to increase from 9.5% to 11%.
Noteholders approved the plan at a Monday afternoon meeting. Algom says it will now call new meetings of the other classes of creditors to vote on the plan.
On Friday, noteholders rejected the steelmaker’s second restructuring plan as inadequate.
On Monday, a bankruptcy court was set to hear details of Algoma’s latest plan. The company is looking to extend creditor protection, which expires on Monday. The protection has already been extended six times since being initially granted on April 23.
Algoma’s noteholders are owed more than $600 million.
The company employs about 3,900 workers in Sault Ste. Marie Ontario, making it the city’s largest employer. The company’s shares have been suspended from the Toronto Stock Exchange since last Tuesday for failing to meet minimum listing requirements. Its woes began last year when steel prices sank to 20-year lows on weakening demand and an influx of cheap imports hit North America.
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