Algoma Requests Financing Extension to March 2018

Essar Steel Algoma, rebranded as Algoma, is requesting a fourth extension to its financing as it continues toward emergence from bankruptcy protection. The last Debtor In Possession extension was denied by the court due to concerns that the financing would not cover the winter material build-up and could provide too much transaction leverage for the DIP lenders. The DIP agreement expired April 30 and an extension was requested to Aug. 31 with a conditional further 30-day extension.

The latest proposal extends financing through March 31, 2018, and provides the security requested by the court. Algoma court monitor Brian Denega said the new financing agreement gives the company sufficient liquidity and flexibility through the winter months and enhances prospects for a successful conclusion to its CCAA proceedings. A decision by the Ontario Superior Court is expected next week.