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TORONTO — The 100-year-old steel maker once known as Stelco Inc. may become independent again after United States Steel Corp. gave up on trying to restructure the company it purchased in 2007.
U.S. Steel Canada Inc., possessing the youngest integrated steel mill in North America and an idle steel-making mill in Hamilton, would proceed on its own or be sold after U.S. Steel and its stakeholders failed to reach a deal on the future of the Canadian unit within its troubled Pittsburgh-based parent company.
U.S. Steel will not bid for the Canadian assets, but will maintain all services and arrangements that the Canadian unit requires for up to 24 months under a transition agreement the parent company put forth Wednesday at an Ontario Superior Court hearing.
“Absent a consensual restructuring or a [sales and restructuring process] transaction at this time, U.S. Steel Canada needs to bring stability to its operations while it starts the process to disengage itself from U.S. Steel as well as to work toward developing new markets and customers for its steel products,” court-appointed monitor Alex Morrison said in a report.
If the court approves the transition agreement, the move would end 13 months of negotiations between U.S. Steel, the United Steelworkers union, active and retired salaried personnel, and the government of Ontario after the Canadian unit was placed into protection under the Companies’ Creditors Arrangement Act in September, 2014.
It also brings the former Stelco full circle after its $1.1-billion purchase by U.S. Steel in 2007, a move seen as largely a defensive tactic aimed at keeping the company out of the hands of Russian giant OAO Severstal, which appeared intent at the time on becoming a major North American steel producer. Severstal has since exited North America.
Essar Steel Algoma Inc. made a bid to buy U.S. Steel Canada under the sales process set up as part of the CCAA. There were no acceptable bids for the company, Mr. Morrison said in earlier reports.
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