Bankruptcy News

We've summarized the latest docket activity and news for publicly traded companies currently operating under U.S. Bankruptcy Court protection.

Bankruptcy/Chapter 11 / Energy

Essar Steel Algoma Chapter 15 Petition Filed

Ontario, Canada-based Essar Steel Algoma and four affiliated Debtors filed for Chapter 15 protection with the U.S. Bankruptcy Court in the District of Delaware, lead case number 14-11730. The Company, which derives its revenues primarily from the manufacture and sale of hot and cold rolled steel products including sheet and plate, is represented by Daniel J. DeFranceschi of Richards, Layton & Finger. Essar Steel Algoma concurrently announced that it has reached an agreement in principle with Essar Global Fund Limited (EGFL), the investment fund that is its ultimate owner, and holders of more than 70% in principal amount of its 9 7/8% Senior Unsecured Notes. This agreement provides for a near-term cash infusion from EGFL and a substantial deleveraging of Algoma’s balance sheet, with a total equity infusion from EGFL of up to $300 million as well as a planned refinancing of all of the Company’s senior secured debt. The Company is completing this refinancing and recapitalization transaction through a Plan of Arrangement under the Canada Business Corporations Act, and this proceeding has been commenced with the Ontario Superior Court of Justice. EGFL will provide Essar Steel Algoma with additional liquidity pending completion of the refinancing and recapitalization process. Kalyan Ghosh, the Company’s chief executive officer, comments, “We are extremely pleased that we have reached a consensual agreement in principle with our significant unsecured noteholders and EGFL that, upon its consummation, will result in a recapitalized business, a refinanced capital structure, and financial flexibility to continue to make capital improvements. The Board of Directors and management team have explored a number of alternatives. This path offers the best means to maximize long-term value while offering certainty of supply for customers and continued security for our employees, retirees, vendors and all other important stakeholders, which were key considerations.” Essar Steel Algoma indicates more than $1 billion in assets on its Chapter 15 petition.

Read more Bankruptcy News