On November 30, 2018, Essar Steel Algoma Inc. (“ESAI”) concluded its comprehensive restructuring under the Companies’ Creditors Arrangement Act by way of the sale of substantially all of its assets to Algoma Steel Inc. (“ASI”), a company sponsored by ESAI’s existing senior secured term lenders and 9.5% senior secured noteholders (the Secured Lenders) pursuant to a restructuring support agreement. In connection with the sale, the Secured Lenders exchanged their existing secured claims for equity in ASI and certain Secured Lenders backstopped and funded a US$285 million exit term loan facility. ASI also obtained a US$250 million revolving ABL facility from a syndicate of third-party lenders led by Wells Fargo Capital Financing Corporation Canada. In addition to ESAI’s assets, ASI also purchased the port assets used at the company’s port facility in Sault Ste. Marie to effectively unwind a 2014 transfer of the port assets, which the CCAA court found to be oppressive earlier in the proceedings. Through the restructuring ASI also implemented revised collective bargaining agreements with the hourly and salaried local unions and obtained certain pension relief through legislation and regulations enacted by the Province of Ontario.
Stikeman Elliott LLP represented ESAI in Canada with a team of Ashley Taylor, Maria Konyukhova, Lee Nicholson, Sanja Sopic (Restructuring/Insolvency), John Ciardullo, Billy Rosemberg (Corporate), Peter Hamilton, Meaghan Obee Tower (Banking), Andrea Boctor (Pensions), Larry Cobb, Patrick Duffy (Environmental), John Lorito, Margaret Nixon, Eryn Fanjoy (Tax), Michael Kilby (Competition), Eliot Kolers, Daniel Murdoch, Patrick Corney (Litigation), Andrew Elliott, Neil Shapiro (Real Estate), Lorna Cuthbert, Nancy Ramalho (Labour and Employment) and Justine Whitehead (Intellectual Property). Weil, Gotshal & Manges LLP represented ESAI in the United States with a team of Ray Schrock, Kelly DiBlasi, David Cohen (Restructuring/Insolvency), and Sasha Shulzhenko (Banking). FTI Consulting Inc. acted as Chief Restructuring Advisor to ESAI with a team of John Strek and Robert Del Genio and Evercore Group L.L.C. acted as financial advisor to ESAI with a team of Daniel Aronson, Bo Yi and Akshay Natarajan.
Ernst & Young Inc. acted as Monitor of ESAI and other affiliates with a team of Brian Denega, Sharon Hamilton, Allen Yao, Matt Kaplan, Fiona Han, Matt Budd (Restructuring), Jay Patel, Moshe Deutsch, Robert Stall, Terrance Yeung (Valuations), Brendan Gallagher (Capital Equipment Valuation), Uros Karadzic, Faisal Siddiqi (Pensions), Craig Roskos, Charanjit Girn (Transaction Tax), Sean Kruger (Transfer Pricing), Jan Pedder, Lynne Sangster (Indirect Tax) and Garth Marshall (Geology), and Gowling WLG represented the Monitor with a team of Derrick Tay, Clifton Prophet, Nicholas Kluge, Dom Glavota (Restructuring/Insolvency), Kathleen Ritchie (Corporate), Ash Gupta (Tax), and Chris Alam, Kelby Carter (Banking).
Osler, Hoskin & Harcourt LLP represented ASI and certain senior secured term lenders in Canada with a team of Marc Wasserman, Michael De Lellis, Andrea Lockhart, Martino Calvaruso and Sean Stidwill (Restructuring/Insolvency), John MacDonald (Litigation), John Groenewegen, Charlie Zilvytis (Corporate), Kevin Morley, Laurie Barrett, Jason Pearlstein, Jeremy Burgess (Banking), Paul Litner, Jon Marin (Pensions), Sven Poysa (Labour and Employment), Jennifer Fairfax, Patrick Welsh (Environmental), Firoz Ahmed, Greg Wylie, Alex Klyguine (Tax), Shuli Rodal, Kaeleigh Kuzma (Competition) and Ryan Nielsen (Real Estate). Davis Polk & Wardwell LLP represented ASI and certain senior secured term lenders in the United States with a team composed of Damian Schaible, Christopher Robertson (Restructuring/Insolvency), Stephen Salmon, Bryan Quinn, Donald Lang (Corporate), J.W. Perry, Jonathan Brown, Louis Labriola (Banking), Lucy Farr and Tracy Matlock (Tax). Rothschild & Co. US Inc. acted as financial advisor to the senior secured term lenders and ASI with a team of Stephen Antinelli, Nic Hooper, Michael Speller, Kevin Glodowski and Rolf Arnold. PricewaterhouseCoopers Inc. also acted as financial advisor to the senior secured term lenders and ASI with a team of John McKenna and Ian Dunlop.
Goodmans LLP represented the ad hoc committee of 9.5% senior secured noteholders in Canada with a team consisting of Robert Chadwick, Joseph Latham, Bradley Wiffen, Andrew Harmes (Restructuring/Insolvency), Tim Heeney (Corporate), Jeff Citron, Dan Dedic (Banking), David Conklin (Litigation), Glenn Ernst and Alan Bowman (Tax), Ken Herlin (Real Estate) and David Rosner (Competition).
Lenczner Slaght Royce Smith Griffin LLP, Blake, Cassels & Graydon LLP, and Brauti Thorning Zibarras LLP represented GIP Primus, L.P. and Brightwood Loan Services L.L.C. in connection with the sale of the port assets with a team of Peter Griffin, Monique Jilesen, Scott Rollwagen, Matthew Lerner, Chris Trivisonno, Robert Trenker (Litigation), Steven Weisz, Caitlin Fell (Restructuring/Insolvency), Michael Harquail, Charles McRoberts (Banking), Jamie Koumanakos and David Kruse (Corporate), Chris Huband (Real Estate), and Paul Stepak and Allan Gelkopf (Tax).
McMillan LLP represented the exit term lenders and exit ABL lenders in Canada with a team of Wael Rostom, Tushara Weerasooriya (Restructuring/Insolvency), Jeff Rogers, Don Waters, Darcy Ammerman, Alex Ricchetti, Julie Han, Emily Csiszar, Rob Scavone (Banking), David Ross, Jennifer Mandel, Alma Borojeni (Real Estate), David Wentzell (Pensions), Ralph Cuervo-Lorens (Environmental), Michael Friedman, Jamie Wilks (Tax), Mary Flynn-Guglietti (Municipal Law), Mike Richmond, Sharon Groom, Paul Boshyk, Geoffrey Kubrick, Paul Davis, and Lyndsay Wasser (Corporate, Energy, and Labour and Employment).
Simpson Thacher & Bartlett LLP represented the exit term lenders and exit ABL lenders in the United States with a team of Justin Lungstrum, Stephanie Rotter, Jeffrey Herscott, Juan Gonzalez, Michael Peragine, Janet Nadile, Jonathan Pall (Banking), Sandeep Qusba (Restructuring/Insolvency), Genevieve Dorment (Intellectual Property), Timothy Mulvihill (Environmental), Timothy Gallagher (Real Estate), Abram Ellis, Mark Skerry (Anti-Corruption/Sanctions), Nicole Humphrey (Tax) and Jeanne Annarumma (ERISA).
Paliare Roland Rosenberg Rothstein LLP represented the USW and its Local 2724 with a team of Massimo (Max) Starnino, Kenneth Rosenberg, Lily Harmer, Emily Lawrence and Lauren Pearce (Restructuring/Insolvency and Labour and Employment). Davies Ward Phillips & Vineberg LLP provided transactional legal support, with a team of Robin Schwill and Christopher Anderson (Corporation).
FTI Consulting Canada Inc. acted as financial advisor to the USW and its Local 2724 with a team of Paul Bishop, Jim Robinson and Patrick Kennedy and Prism Economics Inc. also acted as financial advisor represented by Ken Delaney.
Cavalluzzo Shilton Mcintyre Cornish LLP represented USW Local 2251 with a team of Michael Wright, Tracey Henry, Amanda Darrach and Alex St. John (Litigation and Labour and Employment).
Ursel Phillips Fellows Hopkinson LLP acted as representative counsel for certain of ESAI’s retirees with a team of Susan Ursel, Karen Ensslen, Katy O’Rourke, Ashley Schuitema and Erin Epp (Litigation and Pensions).