Cleveland Cliffs Inc (CLF)

[greasemonkeyshoes]

Two steel companies under ownership change,north of the border..........
https://www.ft.com/content/7f13634e-4aa7-11e6-b387-64ab0a67014c
Highlights:
With the global steel industry reeling from low prices and oversupply, Mr Gupta’s latest potential wagers are on a larger scale and come late in the day. Both Canadian companies are in financial difficulties, operating under creditor protection and already the subject of ownership battles.

“It’s a messy story. These are two companies that have had significant issues with management,” said Chuck Bradford, an industry analyst.

New York-based private equity fund KPS Capital Partners, which had intended to combine the pair, pulled out of the running last week after failing to reach agreement with the provincial government.

Its bid for Algoma’s assets, made jointly with certain lenders to the business, had been accepted.

Another Algoma suitor is a group including shareholders of its former owner, Essar Global, an Indian energy and resources conglomerate that acquired the mill nearly a decade ago. It is attempting a $900m recapture and wants the sales process reopened.

While Essar has won support from the United Steelworkers Union, the target company has dismissed its approach.

Essar has similar designs on US Steel Canada, a former unit of the American giant, though its offer was earlier rejected. Bedrock Industries, a private equity house, was also said to be in the race for US Steel Canada.

Bedrock declined to comment.

Liberty was engaged with the sales processes for both assets, said the person briefed on the matter. Separately, it is “monitoring” an iron ore pellet plant under development by Essar in Minnesota that has filed for bankruptcy protection, with the view that it could supply the Canadian mills.

An Algoma spokesman confirmed the lenders were pushing ahead with their bid without KPS, but said they were legally bound not to name other parties involved. US Steel Canada did not respond to requests for comment.

ps-Impact on the Canadian pallet market and clf??