U.S. Steel Canada files for bankruptcy protection
U.S. Steel Canada is under court-ordered protection from its creditors.
The move, announced Tuesday, sat well with investors on U.S. markets on Wednesday. U.S. Steel was up 12 percent at $46.34 at 9:04 a.m. in New York. The stock (X:US) gained 40 percent this year through Tuesday’s close, Bloomberg reported.
In announcing the move, the company’s American parent said the Hamilton and Nanticoke plants have lost more than $2.4 billion over the last five years and the bleeding has to stop.
“Despite substantial efforts over the past several years to make U.S. Steel Canada profitable, it is clear that restructuring … is critical to improving our long-term business outlook,” he said.
The news release from the parent company noted pension costs as one of its major hurdles, saying the Canadian operation accounts for about $1 billion of its employee benefits liability. For 15,000 pensioners, that is a warning they could lose a chunk of their retirement income.
That pension statement echoes claims Stelco made in 2004, when it sought protection under the Companies Creditors Arrangements Act (CCAA) saying the cost of topping up its badly under-funded pension plans was driving it out of business. (Source: Hamilton Spectator)
Posted to Yahoo News Canada