Ontario Court Approves Essar Steel Algoma’s Recapitalization and Refinancing Plan


The Ontario Superior Court of Justice has approved Essar Steel Algoma Inc.’s Plan of Arrangement (the “Plan”), granting a final order deeming the Plan to be fair and reasonable pursuant to the Canada Business Corporations Act. The Final Order follows a unanimous display of support for the Plan by the approximate 92% of 9.875% senior unsecured noteholders who voted at the September 10, 2014 noteholders meeting.

The Plan of Arrangement provides Algoma with a near-term capital infusion from Essar Global Fund Ltd (EGFL) of up to US$100 million to ensure the appropriate liquidity required to complete scheduled capital improvements and allow for the seasonal raw material build. Today’s final order paves the way for the recapitalization and refinancing transaction to be completed on or before November 15, 2014, subject to, among other things, the execution of definitive documentation.

Kalyan Ghosh, Chief Executive Officer of Essar Steel Algoma commented on the Plan’s approval, “This Plan provides for a comprehensive capital infusion, a substantial deleveraging of our balance sheet and the refinancing of all of Algoma’s senior secured debt. In recent months, we have been able to capitalize on the favourable market environment, building on sustainable operational improvements that positioned the Company well for the future. In July and August alone we generated EBITDA of
CDN$22 million and CDN$30 million, respectively. Our order book is full and we are currently taking orders for November.”

For details regarding the Plan of Arrangement and the Court proceedings, the Noticing
Agent, Donlin Recano has established a webpage at www.donlinrecano.com/essarsteelcanada and www.donlinrecano.com/essarsteelus