Essar Steel Algoma

Algoma Steel Inc. and certain senior secured term lenders in Canada in Algoma’s acquisition of substantially all the assets of Essar Steel Algoma in connection to a restructuring under the CCAA

Client

Deutsche Bank AG

Value

$2 billion

Service

Insolvency and Restructuring

Date Closed

November 2018

Lead Office

Toronto


On November 30, 2018, the prepetition term lenders and prepetition senior noteholders to Essar Steel Algoma Inc., through a special purpose acquisition vehicle Algoma Steel Inc., successfully acquired substantially all of the assets of Essar Steel Algoma Inc. and its US subsidiary Essar Steel Algoma Inc. USA in connection with their restructuring proceedings under the Companies’ Creditors Arrangement Act (Canada).

The transaction resulted in a $1 billion de-leveraging of Algoma’s balance sheet and the infusion of additional liquidity on exit. Algoma Steel also closed four contemporaneous financing transactions in which Osler took the lead role in structuring and negotiating - a US$285 million exit term loan, a US$250 million exit ABL facility, a provincial capex facility and a new GIP facility, together with an additional federal capex facility that closed in December 2018. As part of the transaction, Algoma Steel entered into agreements with the provincial government regarding legacy environmental matters, implemented a settlement with the City of Sault Ste. Marie regarding municipal property taxes, and sought certain pension relief from the provincial government.

Osler, Hoskin & Harcourt LLP had a central role in Algoma’s CCAA proceedings, representing an ad hoc committee of prepetition term lenders, Deutsche Bank AG in its capacities as prepetition ABL Agent, DIP Agent and prepetition term loan Sub-Collateral Agent and Cortland Capital Market Services LLC in its capacity as prepetition term loan Agent and Collateral Agent. Key members of Osler’s team consisted of Marc Wasserman and Michael De Lellis, Andrea Lockhart, Martino Calvaruso and Sean Stidwill (Insolvency and Restructuring); John MacDonald (Litigation); Kevin Morley, Laurie Barrett, Jason Pearlstein and Jeremy Burgess (Banking & Financial Services); Jacqueline Code (Research); Jennifer Fairfax and Patrick Welsh (Environmental); Sven Poysa (Labour and Employment); John Groenewegen and Charlie Zilvytis (Corporate); Ryan Nielsen (Real Estate); Paul Litner and Jon Marin (Pension and Benefits); Firoz Ahmed, Greg Wylie and Alex Klyguine (Tax).


Team
Marc Wasserman - Corporate Restructuring Lawyer
Key Contact

Marc Wasserman

Partner, National Chair, Insolvency & Restructuring

Michael De Lellis - Insolvency Lawyer

Michael De Lellis

Partner, Insolvency & Restructuring

Andrea Lockhart

Andrea Lockhart

Counsel, Insolvency & Restructuring

Martino F. Calvaruso - Restructuring Lawyer

Martino F. Calvaruso

Partner, Insolvency & Restructuring

Sean Stidwill

Sean Stidwill

Associate, Insolvency & Restructuring

John MacDonald - Litigation Lawyer

John MacDonald

Partner, Litigation

Kevin J. Morley

Kevin J. Morley

Partner, Financial Services

Jacqueline  Code

Jacqueline Code

Partner, Research

Jennifer  Fairfax

Jennifer Fairfax

Partner, Litigation; Regulatory, Environmental, Aboriginal and Land

Patrick G. Welsh

Patrick G. Welsh

Associate, Regulatory, Environmental, Aboriginal and Land; Litigation

Sven  Poysa

Sven Poysa

Partner, Employment & Labour

John Groenewegen - Private Equity Lawyer

John Groenewegen

Partner, Corporate

Charlie Zilvytis

Charlie Zilvytis

Associate, Corporate

Ryan  Nielsen

Ryan Nielsen

Partner, Real Estate

Paul  Litner - Pensions & Benefits Lawyer in Toronto

Paul Litner

Partner, Pensions & Benefits

Jonathan Marin

Jonathan Marin

Associate, Pension & Benefits

Firoz Ahmed | Tax Lawyer in Toronto

Firoz Ahmed

Partner, Taxation

Gregory  Wylie

Gregory Wylie

Partner, Taxation