Essar Steel Close To Default on Interest Payments


Things don’t sound too good for Sault Ste. Marie’s largest employer according to an article in The business website  is reporting on a serious situation at Essar Steel Algoma that an interest payment on it’s $387.7 million debt was skipped and at least three investment companies have purchased debt of the steel maker.

The article indicates that if the payment isn’t made in 30 days, it will trigger a default.

Algoma skipped a June 15 interest payment on its $384.7 million of 9.875 percent bonds due June 2015, a move that will trigger a default in 30 days if left unpaid. KKR, Bain Capital LLC’s debt-investing group Sankaty Advisors LLC and Loomis Sayles & Co. have taken positions in those securities, said the people who asked not to be identified, citing lack of authorization to speak publicly reports www.

Essar Algoma has reported losses in the last 9 consecutive quarters.

“The parent company is having questions over whether they want to continue to inject cash,” Andrew Feltus, director of high yield who helps oversee $38 billion in fixed-income assets at Pioneer Investment Management Inc. in Boston said in a June 30 telephone interview reports

To read the whole story go to