Ontario, Bedrock sign memorandum to aid with U.S. Steel Canada restructuring
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TORONTO — The Ontario government has chosen Bedrock Industries Group, a private equity fund specializing in metals and mining investment, to handle the restructuring of U.S. Steel Canada.
The steel producer has been operating under creditor protection since September 2014.
Bedrock and the province have signed a memorandum of understanding with regards to the restructuring, which aims to protect jobs, pensions and ongoing operations at the company's Hamilton and Lake Erie facilities.
The terms of the memorandum of understanding are confidential until the court process allows them to be made public.
The United Steelworkers said in a statement that it has been a "stressful and painful two years" for its members and pensioners, and that the union is encouraged by the deal.
"The deal announced today is far from perfect, given the challenges that arise from such a lengthy and complex insolvency process," Marty Warren, the Ontario director for the United Steelworkers, said in a statement.
"However, after two years in CCAA protection and after numerous discussions with other bidders, we believe this could lead to a good final deal for the union’s members and retirees."
He noted the agreement addresses many of the USW's concerns, but said there are a number of challenges that still need to be resolved.
For one thing, Bedrock must negotiate for new collective agreements with unionized workers in Hamilton and Lake Erie, according to Warren's assistant, Tony DePaulo.
The Ontario government has agreed to a framework that will support an acquisition proposal from Bedrock to protect pensions and help with providing post-employment benefits.
The province has also agreed to support the development of industrial lands on behalf of pensioners in order to promote economic development in the Hamilton area while protecting the environment.
The memorandum of understanding is subject to a number of conditions, including approvals by the court that's supervising the creditor protection proceedings and collective bargaining agreements with union locals.