Century-old steel producer
The company announced it has filed a third amended and restated plan of arrangement and reorganization under the Companies’ Creditors Arrangement Act. The new plan calls for the interest rate on the new US$125-million notes to increase to 11% from 9.5%.
Noteholders, who are owed more than $600 million, have approved the plan, and Algoma says it will now call new meetings of the other classes of creditors to vote on it.
Earlier in December, noteholders had rejected the steelmaker’s second restructuring plan as inadequate, and a bankruptcy court was set to hear details of Algoma’s latest proposal.
The company is looking to continue its creditor protection, which has already been extended six times since being initially granted in April.
Algoma has had its shares suspended from the Toronto Stock Exchange since early December for failing to meet minimum listing requirements. Its woes began last year, when steel prices sank to 20-year lows on weakening demand and when an influx of cheap imports hit North America.
Algoma employs about 3,900 workers in Sault Ste. Marie, Ont., making it the city’s largest employer.
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