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

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).