Stelco monitor estimates total plan claims at $640 million

By Caroline Salls

Pittsburgh, Jan. 10 - Stelco Inc.'s monitor in its court-supervised restructuring reported that the total of proven claims against the company plus post-bankruptcy filing interest obligations are estimated to be about $640 million, according to a company news release.

As a result of the estimated claims amount, the monitor said new common shares and new warrants will have to "represent a significant amount of value in order to satisfy the proven claims and post-filing interest obligations of affected creditors."

The monitor's analysis predicts an enterprise value of $600 million to $1.6 billion.

In addition, the monitor said it has reviewed equityholders' concerns about the company's forecasting processes, and stated it believes Stelco's forecasting processes have been thorough and comprehensive and the projections have been prepared in a responsible and detailed manner.

The monitor said senior management has prepared forecasts with input from key departments, and Stelco has regularly updated its financial projections as business conditions have shifted and has kept key stakeholder groups informed of changes to its forecasts on a regular basis.

The monitor also said the equityholders inaccurately claim that Stelco delayed closing of the sale of Stelpipe to Lakeside Steel, as the transaction closed on Oct. 31, in accordance with the definitive sale agreement.

Stelco, a Hamilton, Ont.-based steel company, filed for bankruptcy under the Companies Creditors' Arrangement Act on Jan. 29, 2004 in the Ontario Superior Court of Justice.

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