Stelco suitor shown the door by U.S. Steel Canada, sources say – by Steve Arnold(Hamilton Spectator – June 27, 2016)

Essar Global looks to be out; two investment funds said to be contenders

The pool of suitors for the former Stelco has been cut to two. Sources confirm the board of directors of U.S. Steel Canada has rejected a bid for the troubled company from Essar Global, the India-based conglomerate that owns Essar Steel Algoma in Sault St. Marie.

USSC spokesperson Trevor Harris said in an email exchange: “We continue to respect the integrity of the process and the (non-disclosure agreements) so won’t discuss the identity or number of participants currently involved in the process.

“However, I can confirm that certain parties previously involved are no longer involved in the sales and investor solicitation process, following a conclusion that they would not be able to complete a qualified bid that could result in a going-concern solution.”

Sources familiar with the Stelco sales process and its bidders say the eliminated company is Essar Global. Its bid was rejected, sources say, because USSC and its advisers were concerned the company lacks the financial wherewithal to complete a purchase.

That’s the same reason given by Algoma and its advisers for bouncing the Indian company from the bidding for the Soo’s largest employer. The decision leaves only two investment funds in the bidding for Stelco: KPS Capital and Bedrock Industries, both of New York City.

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