Stelco Holdings Inc. announced today that it has filed a preliminary prospectus with the securities regulatory authorities in each of the provinces and territories of Canada and obtained a receipt in respect of its proposed initial public offering of common shares.
The Hamilton-based company, which emerged from bankruptcy protection three months ago and is owned by U.S. restructuring firm Bedrock Industries Group LLC, plans to raise $150-million in the share sale that could have a total market value of about $1 billion.
Goldman Sachs & Co. and BMO Capital Markets are acting as joint bookrunners for the offering, while the company is preparing an IPO marketing campaign that targets Canadian and U.S. investors.
Besides making early payments to its pension plans, the money would be injected into the company’s mills that produce galvanized and galvannealed products, primarily used for construction and automotive applications.
The century-old steelmaker operates two facilities in Ontario, one in Nanticoke that processes 3.7 million tonnes a year, and another one in Hamilton, whose capacity is of 2.8 million tonnes of steel annually.
In a recent restructuring, Stelco was able to eliminate $3-billion in debt and $1.4-billion in pension and benefit obligations. Previous to Bedrock’s takeover, the company had already filed for bankruptcy and finally emerged from protection in 2007 when U.S. Steel Corp bought it for $1.1 billion.
According to the Globe and Mail, as of June 30, the company’s only red mark on its balance sheet was $68-million drawn on a $375-million asset-backed credit facility.
4 Comments
Richard Paley
I’ve made money each time I have invested in Stelco. In this case let the IPO launch then wait for the inevitable drop in prices a few weeks later, then invest and hold for the long term. With manageable debt, and a strong management team, they will be able to improve the stock price as we are heading into a growth market after five years of depression.
Richard Paley
Simple economics. Check the historical price charts. Buy low and sell high(er). Its all about timing. Do that consistently and you always make money. For background I was born in Hamilton, grew up in Burlington and now work and live in Toronto. I started my career on the #2 galvanizing line at Dofasco and my Dad worked at Dofasco for forty years before retiring.
Richard Paley
Chief Procurement Officer in the mining industry. Going on 22 years now.
patentbs
I am not an expert, but I do believe it is time for a resurgence of the steel industry in North America. Can they survive without massive subsidy? Unknown. I will let the IPO pass and then check it out again.
Time for N.A. base industry to rise again!