Steel Mills
October 29, 2015
Essar Steel Algoma Teetering on Insolvency
Written by Sandy Williams
According to a media reports, Essar Steel Algoma is in talks with senior lenders regarding entering insolvency. Bloomberg sources say a court filing is possible within the next month. Reuters said the company has hired law firm Weil Gotshal & Manges LLP and restructuring specialists Evercore Partners Inc. to advise it.
Canadian steelmaker, Essar Steel Algoma is no stranger to insolvency procedures. Algoma has filed for bankruptcy protection two times, and was under court protection most recently in July 2014. Last year, parent company Essar Global provided a capital infusion of US $100 million to shore up liquidity and allow for seasonal build of raw material. The agreement also provided for a total equity infusion from Essar of US $300 million concurrent with refinancing all of Algoma’s senior secured debt. An interest payment to debt holders of US $18 million is due next month.
