| By PR Newswire |
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| January 11, 2013 03:30 PM EST |
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SAULT STE. MARIE, ON, Jan. 11, 2013 /PRNewswire/ - Essar Steel Algoma Inc.
announced today the Ontario Government has granted the Company
temporary pension relief in the form of a twelve month deferral of
special pension payments effective December 2012 through to November
2013. The Company will continue to pay ongoing pension service costs
for its defined benefit pension plans.
Historically low interest rates have led many of Ontario's
defined-benefit pension plans, both public and private, to seek
temporary relief measures. As a result of such low rates, Essar Steel
Algoma's pension contribution requirements were more than double those
made in previous years. This combined with a decline in steel prices,
increased borrowing costs in the wake of the Ontario Court of Appeal
decision in Re Indalex, and one-time operational issues led Essar to seek temporary relief to
address near-term liquidity needs.
Essar Steel Algoma CEO Kalyan Ghosh commented, "This temporary relief,
in combination with continued cost-cutting, operational improvements,
improving industry fundamentals and lower raw material costs will
enable Essar Steel Algoma to manage its liquidity through this
difficult cycle. In the coming months Essar will meet with its unions,
pensioners and other pension stakeholders to explore a medium-term
pension funding strategy."
Essar Steel Algoma greatly appreciates the work of David Orazietti, MPP
who ensured the success of this important relief measure. He worked
tirelessly with the Ontario Government to secure this vital relief
during challenging financial times. This temporary assistance provides
the time and financial capacity necessary for Essar to put in place a
more comprehensive plan to satisfy its pension obligations for the
long-term.
More about Essar Steel Algoma Inc.
A member of the Essar Group, Essar Steel Algoma Inc. is based in Sault
Ste. Marie, Ontario. As a fully integrated steel producer, the Company
derives its revenues primarily from the manufacture and sale of hot and
cold rolled steel products including sheet and plate.
SOURCE Essar Steel Algoma Inc.
