Key Benefits of the Secured Creditors Proposal
The secured creditors’ plan massively reduces debt, provides substantial new financing, and delivers enough capital to upgrade operations.
Specifically, the plan:
- Reduces existing debt by C$1.5 billion;
- Provides substantial new financing in excess of C$500 million raised from the secured creditors and other third parties to fund operations and CCAA exit costs;
- Provides for the availability of sufficient liquidity to fund the C$400 million of capital expenditures over the next 5 years that will refurbish the mill and upgrade the equipment;
- Preserves meaningful jobs at the plant and throughout the community;
- Reduces the cost structure of Algoma, improving its financial performance and flexibility;
- Reduces costs via renegotiated and improved raw material supply contracts;
- Assumes the hourly and salaried defined benefit pension plans, meaning that the hourly and salaried retirees continue to receive their current pensions, and provides runway for the financial status of these plans to improve;
- Provides continuance of core medical benefits for all employees and retirees;
- Improves the profit-sharing program, ensuring that when Algoma does well, all employees will receive additional compensation;
- Sets aside funds to address legacy environmental issues as well as ongoing compliance; and
- Ensures customers have the confidence that Algoma’s future is stable, and have the confidence to place their business with Algoma.
The secured creditors are ready to partner with all of the company’s stakeholders, including employees, retirees, customers, and the community, to bring real sustainable change. We urge the union membership and its leadership teams to show real leadership and return to the bargaining table to deal with the only viable plan for Algoma’s long-term success before it is too late.