Archives for May 2017
There has been plenty of discussion about the property tax that the City claims is owed to them by Algoma. The amount of the property tax assessment is currently under appeal.
The Secured Creditors, as part of their restructuring plan, are committed to resolving the City’s property tax claims in the near term. We understand the impact that Algoma’s restructuring proceeding has had on the community at large. We are also intimately aware of the money needed to invest in Algoma for a future as a viable company.
To help the City, we initiated a proposal, which was supported by the Company, the Monitor, and the Ad Hoc Committee of Essar Algoma noteholders, to pay $350,000 per month towards the Company’s ongoing property tax bill. The Court then endorsed Algoma making these go forward property tax payments.
You may have read the article on sootoday.com and in the Sault Star about the extension of the Debtor-in-Possession loan (DIP) provided by the secured creditors and the appointment of a restructuring committee. These are two very important steps for Algoma, and are supported by the Company, the court-appointed monitor, the chief restructuring advisor and the secured creditors.
The extension of the secured creditors’ DIP loan gives the Company the time, the resources and the stability to implement the restructuring transaction supported by the secured creditors. This transaction will need to include a negotiated collective agreement with the USW locals.
In order to aid in the restructuring, the Company has proposed that a restructuring committee comprised of professionals with turnaround experience be appointed. This three-person committee will act as an independent body to help direct and oversee the restructuring.
This is a critical time for Algoma. Things need to change. Today’s announcement provides both financial stability and independent leadership, which are critical building blocks to a potential restructuring. In addition, these court motions reinforce the Company’s belief that the secured creditors’ proposal represents Algoma’s best prospect to continue as a going concern enterprise to the benefit of all of Algoma’s stakeholders.