BUSINESS

Essar Steel Algoma, Canada's 2nd Largest Steel Producer, To Seek Bankruptcy Protection

11/09/2015 05:05 EST | Updated 11/09/2016 05:12 EST
CP
TORONTO — Steel producer Essar Steel Algoma Inc. says it will seek bankruptcy protection as it deals with a continued slump in the price of steel.

The company has filed requests with Canadian and U.S. courts as it seeks to restructure its long-term debt, and has raised US$200 million from a group of investors led by Deutsche Bank to fund ongoing operations.

Essar Steel Algoma is the second biggest steel producer in Canada and the largest employer in Sault Ste. Marie, Ont., with close to 3,000 employees.

The company is a subsidiary of India-based global conglomerate Essar Steel.

In 2013, Essar Steel Algoma won a battle against organized labour when the Ontario government approved a new rule that allowed it to lower its pension contributions, which the company said had become unsustainable.